cris-20240930

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, 2024


☐			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 Capital 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 11, 2024, there were 8,466,957 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	6

	Condensed Consolidated Balance Sheets as of September 30, 2024 and December 31, 2023	6

	Condensed Consolidated Statements of Operations and Comprehensive Loss for the Three and Nine Months Ended September 30, 2024 and 2023	7

	Condensed Consolidated Statements of Stockholders' Equity (Deficit) for the Three and Nine Months Ended September 30, 2024 and 2023	8

	Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2024 and 2023	10

	Notes to Condensed Consolidated Financial Statements	11

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	21

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	30

Item 4.	Controls and Procedures	30

PART II.	OTHER INFORMATION

Item 1A.	Risk Factors	30

Item 5.	Other Information	30

Item 6.	Exhibits	31

Signatures		32

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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 program for emavusertib;

•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 continue as a going concern;

•our ability to obtain additional financing;

•our ability to establish and maintain collaborations;

•our plans to develop and commercialize emavusertib;

•the timing or likelihood of regulatory filings and approvals;

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

•our estimates regarding expenses, future revenue and capital requirements;

•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; and

•our intellectual property position.

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, 2023, and, if applicable, 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 estimates of the potential market opportunities for emavusertib 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.

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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, 2023, and, if applicable, those included under Part II, Item 1A 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 identified conditions and events that raise substantial doubt about our ability to continue as a going concern.

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

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

•We are dependent on the success of our lead clinical stage drug candidate emavusertib, for which we are conducting the TakeAim Leukemia Phase 1/2 and TakeAim Lymphoma Phase 1/2 studies and a Phase 1 safety study of emavusertib in combination with azacitidine and venetoclax to treat acute myeloid leukemia, or AML. If we are unable to commercialize emauvsertib, or if we experience significant delays in doing so, our business will be materially harmed.

•We have never obtained marketing approval for a drug candidate and we may be unable to obtain, or may be delayed in obtaining, marketing approval for emavusertib or any future drug candidates that we, or any future collaborators, may develop.

•We may not be successful in establishing additional strategic collaborations, which could adversely affect our ability to develop and commercialize emavusertib.

•We rely in part on third parties to conduct clinical trials of emavusertib and if such third parties perform inadequately, including failing to meet deadlines for the completion of such trials, research or testing, then we may not be able to successfully develop and commercialize emavusertib and grow our business.

•Even if we complete the necessary preclinical studies and clinical trials, the marketing approval process is expensive, time consuming and uncertain and may prevent us or any future collaborators from obtaining approvals for the commercialization of emavusertib.

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

•We may not be able to obtain and maintain patent protection for our technologies and drugs, our licensors may not be able to obtain and maintain patent protection for the technology or drugs that we license from them, and the patent protection we or they do obtain may not be sufficient to stop our competitors from using similar technology.

•The alleged events of default, or any future allegations of an event of default, under the Oberland Purchase Agreement could have a material adverse effect on our business, financial condition and stock price, including our ability to continue as a going concern.

•If we are not able to attract and retain key management and scientific personnel and advisors, we may not successfully develop emavusertib or achieve our other business objectives.

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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, 2024		December 31, 2023
ASSETS
Current assets:
Cash and cash equivalents	$	20,854	$	26,681

Short-term investments	—		29,653
Accounts receivable	2,978		2,794
Prepaid expenses and other current assets	3,105		1,780
Total current assets	26,937		60,908

Property and equipment, net	246		434
Restricted cash, long-term	544		544
Operating lease right-of-use asset	3,461		3,056
Other assets	2,303		3,358
Goodwill	8,982		8,982

Total assets	$	42,473	$	77,282
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
Current liabilities:
Accounts payable	$	3,818	$	3,172
Accrued liabilities	8,141		9,040
Current portion of operating lease liability	1,292		1,305
Current portion of liability related to sale of future royalties	8,783		8,504
Total current liabilities	22,034		22,021
Long-term operating lease liability	1,968		1,489
Liability related to sale of future royalties, net	27,206		34,102

Total liabilities	51,208		57,612
Stockholders’ equity (deficit):
Preferred stock, $0.01 par value—5,000,000 shares authorized, no shares issued and outstanding at September 30, 2024 and December 31, 2023	—		—
Common stock, $0.01 par value—34,171,875 shares authorized, 6,020,259 shares issued and outstanding at September 30, 2024; 22,781,250 shares authorized, 5,894,085 shares issued and outstanding at December 31, 2023	60		59
Additional paid-in capital	1,221,386		1,215,792
Accumulated deficit	(1,230,181)		(1,196,410)
Accumulated other comprehensive income	—		229
Total stockholders’ equity (deficit)	(8,735)		19,670
Total liabilities and stockholders’ equity (deficit)	$	42,473	$	77,282

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,
	2024		2023		2024		2023




Revenues, net	$	2,931	$	2,833	$	7,563	$	7,327
Operating expenses:
Cost of royalties	22		60		81		158
Research and development	9,723		10,380		29,594		29,532
General and administrative	3,753		4,761		13,436		13,770
Total operating expenses	13,498		15,201		43,111		43,460
Loss from operations	(10,567)		(12,368)		(35,548)		(36,133)
Other income:

Interest income	325		806		1,541		2,273
Income (expense) related to the sale of future royalties	150		(619)		236		(1,841)


Total other income	475		187		1,777		432
Net loss	$	(10,092)	$	(12,181)	$	(33,771)	$	(35,701)
Net loss per common share (basic and diluted)	$	(1.70)	$	(2.13)	$	(5.77)	$	(6.96)
Weighted average common shares (basic and diluted)	5,940,924		5,720,789		5,847,982		5,131,904

Net loss	$	(10,092)	$	(12,181)	$	(33,771)	$	(35,701)
Other comprehensive income:
Unrealized gain (loss) on marketable securities	(42)		101		(229)		289
Comprehensive loss	$	(10,134)	$	(12,080)	$	(34,000)	$	(35,412)

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 (Deficit)

(In thousands, except share data)

(Unaudited)


	Common Stock			Additional Paid-in Capital		Accumulated Deficit		Accumulated Other Comprehensive Income		Total Stockholders’ Equity (Deficit)
	Shares	Amount
December 31, 2023	5,894,085	$	59	$	1,215,792	$	(1,196,410)	$	229	$	19,670
Stock-based compensation	—	—		1,559		—		—		1,559


Unrealized gain on marketable securities	—	—		—		—		109		109
Net loss	—	—		—		(11,876)		—		(11,876)
March 31, 2024	5,894,085	$	59	$	1,217,351	$	(1,208,286)	$	338	$	9,462
Stock-based compensation	—	—		1,704		—		—		1,704
Issuance of common stock under employee benefit plans, net of shares received to settle minimum tax obligation for vesting of restricted stock awards	(9,483)	—		78		—		—		78
Issuance of shares in connection with 2024 Sales Agreement, net of issuance costs	19,676	—		161		—		—		161
Unrealized loss on marketable securities	—	—		—		—		(296)		(296)
Net loss	—	—		—		(11,803)		—		(11,803)
June 30, 2024	5,904,278	$	59	$	1,219,294	$	(1,220,089)	$	42	$	(694)
Stock-based compensation	—	—		1,384		—		—		1,384
Issuance of shares in connection with 2024 Sales Agreement, net of issuance costs	120,356	1		708		—		—		709
Cancellation of restricted stock awards	(4,375)	—		—		—		—		—
Unrealized loss on marketable securities	—	—		—		—		(42)		(42)
Net loss	—	—		—		(10,092)		—		(10,092)
September 30, 2024	6,020,259	$	60	$	1,221,386	$	(1,230,181)	$	—	$	(8,735)

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	Common Stock			Additional Paid-in Capital		Accumulated Deficit		Accumulated Other Comprehensive (Loss) Income		Total Stockholders’ Equity
	Shares	Amount
December 31, 2022	4,830,464	$	48	$	1,195,687	$	(1,148,997)	$	(186)	$	46,552
Stock-based compensation	—	—		1,395		—		—		1,395
Issuance of common stock under employee benefit plans	516	1		7		—		—		8
Unrealized gain on marketable securities	—	—		—		—		195		195
Net loss	—	—		—		(11,559)		—		(11,559)
March 31, 2023	4,830,980	$	49	$	1,197,089	$	(1,160,556)	$	9	$	36,591
Stock-based compensation	—	—		1,424		—				1,424
Issuance of common stock under employee benefit plans, including restricted stock awards	136,345	1		177		—		—		178
Unrealized loss on marketable securities	—	—		—		—		(7)		(7)
Net loss	—	—		—		(11,961)		—		(11,961)
June 30, 2023	4,967,325	$	50	$	1,198,690	$	(1,172,517)	$	2	$	26,225
Issuance of shares in connection with 2023 Registered Direct, net of issuance costs	920,488	9		13,805		—		—		13,814
Stock-based compensation	—	—		1,633		—		—		1,633
Cancellation of restricted stock awards	(2,500)	—		(1)						(1)
Unrealized gain on marketable securities	—	—		—		—		101		101
Net loss	—	—		—		(12,181)		—		(12,181)
September 30, 2023	5,885,313	$	59	$	1,214,127	$	(1,184,698)	$	103	$	29,591

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 CASH FLOWS

(In thousands)

(Unaudited)


	Nine Months Ended September 30,
	2024		2023
Cash flows from operating activities:
Net loss	$	(33,771)	$	(35,701)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	187		191
Non-cash lease expense	978		999

Stock-based compensation expense	4,647		4,452

Non-cash activity related to the sale of future royalties	(236)		(336)
Amortization of premiums and discounts on investments	(444)		(1,044)




Changes in operating assets and liabilities:
Accounts receivable	(184)		127
Prepaid expenses and other assets	(270)		338

Accounts payable and accrued liabilities	(293)		3,574
Operating lease liability	(917)		(848)
Total adjustments	3,468		7,453
Net cash used in operating activities	(30,303)		(28,248)
Cash flows from investing activities:
Purchase of investments	(18,098)		(64,656)
Sales and maturities of investments	47,968		87,925

Net cash provided by investing activities	29,870		23,269
Cash flows from financing activities:








Proceeds from issuance of common stock, net of issuance costs	987		13,999
Payment of liability related to the sale of future royalties	(6,381)		(4,301)


Net cash provided by (used in) financing activities	(5,394)		9,698
Net (decrease) increase in cash and cash equivalents and restricted cash	(5,827)		4,719
Cash and cash equivalents and restricted cash, beginning of period	27,225		20,293
Cash and cash equivalents and restricted cash, end of period	$	21,398	$	25,012
Supplemental cash flow data:
Issuance costs in accrued expenses and accounts payable	$	40	$	—

Cash paid for interest	$	—	$	2,177
Increase in right-of-use assets and operating lease liabilities	$	1,383	$	—


Reconciliation of cash, cash equivalents and restricted cash:
Cash and cash equivalents	$	20,854	$	24,468
Restricted cash, long-term	544		544
Total cash, cash equivalents and restricted cash shown in the statement of cash flows	$	21,398	$	25,012

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

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CURIS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(In thousands, except share and per share data)

1. Nature of Business

Curis, Inc. is a biotechnology company focused on the development of emavusertib (CA-4948), an orally available, small molecule inhibitor of Interleukin-1 receptor associated kinase, or IRAK4. Throughout these Condensed Consolidated Financial Statements, Curis, Inc. and its wholly owned subsidiaries are collectively referred to as the “Company” or “Curis”.

The Company is party to a collaboration agreement with Genentech Inc. (“Genentech”), a member of the Roche Group, under which Genentech and F. Hoffmann-La Roche Ltd (“Roche”) are commercializing Erivedge® (vismodegib), a first-in-class orally administered small molecule Hedgehog signaling pathway antagonist. Erivedge is approved for the treatment of advanced basal cell carcinoma (“BCC”).

The Company is party to an exclusive collaboration agreement with Aurigene Discovery Technologies Limited (“Aurigene”) for the discovery, development and commercialization of small molecule compounds in the areas of immuno-oncology and precision oncology, including emavusertib.

The Company is subject to risks common to companies in the biotechnology industry as well as risks that are specific to the Company’s business, including, but not limited to: the Company’s ability to obtain adequate financing to fund its operations; the Company’s ability to continue as a going concern; the Company’s ability to advance and expand its research and development program for emavusertib; the Company’s ability to execute on its overall business strategies; the Company’s ability to obtain and maintain necessary intellectual property protection; development by the Company’s competitors of new or better technological innovations; the Company’s ability to comply with regulatory requirements; the Company’s ability to obtain and maintain applicable regulatory approvals and commercialize any approved drug candidates; and the ability of the Company and its wholly owned subsidiary, Curis Royalty, LLC (“Curis Royalty”), to satisfy the terms of the royalty interest purchase agreement (the “Oberland Purchase Agreement”) with TPC Investments I LP and TPC Investments II LP (the “Purchasers”), each of which is a Delaware limited partnership managed by Oberland Capital Management, LLC, and Lind SA LLC (the “Agent”), a Delaware limited liability company managed by Oberland Capital Management, LLC, as collateral agent for the Purchasers.

The Company’s future operating results will largely depend on the progress of emavusertib and the magnitude of payments that it may receive and make under its current and potential future collaborations. The results of the Company’s operations have varied and will likely continue to vary significantly from year to year and quarter to quarter and depend on a number of factors, including, but not limited to the timing, outcome and cost of the Company’s preclinical studies and clinical trials for its drug candidate.

The Company will require substantial funds to maintain its research and development programs and support operations. The Company has incurred losses and cash outflows from operations since its inception. The Company had an accumulated deficit of $1.2 billion as of September 30, 2024, and incurred a net loss of $33.8 million and used $30.3 million of cash in operations for the nine months ended September 30, 2024. The Company expects to continue to generate operating losses in the foreseeable future.

In accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Update (“ASU”) No. 2014-15, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern (Subtopic 205-40), the Company has concluded there are conditions and events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date that the Condensed Consolidated Financial Statements are issued. Based on the Company's $20.9 million of existing cash and cash equivalents at September 30, 2024, the net proceeds of approximately $10.8 million from the October 2024 Offerings discussed below in Note 9, Common Stock to these Notes to the Condensed Consolidated Financial Statements, recurring losses and cash outflows from operations since inception, an expectation of continuing losses and cash outflows from operations for the foreseeable future and the need to raise additional capital to finance the Company's future operations, the Company concluded it does not have sufficient cash on hand to support current operations for the next 12 months from the date of filing this Quarterly Report on Form 10-Q. These factors raise substantial doubt regarding the Company’s ability to continue as a going concern.

The Company plans to seek additional funding through a number of potential avenues, including private or public equity financings, collaborations, or other strategic transactions. The Company may not be able to obtain funding on acceptable terms, or at all. The terms of any financing may adversely affect the holdings or the rights of the Company’s stockholders. The Company’s ability to raise additional funds will depend, among other factors, on financial, economic and market conditions, many of which are outside of its control, and it may be unable to raise financing when needed, or on terms favorable to the

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Company. If necessary funds are not available, the Company will have to delay, reduce the scope of, or eliminate its development of emavusertib, potentially delaying the time to market for or preventing the marketing of emavusertib, which may have a material adverse effect on the Company’s operations and future prospects.

2. Summary of Significant Accounting Policies

(a)Basis of Presentation and Principles of Consolidation

The accompanying Condensed Consolidated Financial Statements have been prepared in accordance with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. These statements, however, are condensed and do not include all disclosures required by accounting principles generally accepted in the U.S. (“GAAP”) for complete financial statements and should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2023 as filed with the Securities and Exchange Commission (“SEC”) on February 8, 2024.

In the opinion of the management of the Company, the unaudited Condensed Consolidated Financial Statements contain all adjustments (all of which were considered normal and recurring) necessary for a fair statement of the Company’s financial position at September 30, 2024; the results of operations for the three and nine-month periods ended September 30, 2024 and 2023; stockholders' equity (deficit) for the three and nine-month periods ended September 30, 2024 and 2023; and the cash flows for the nine-month periods ended September 30, 2024 and 2023. The Condensed Consolidated Balance Sheet at December 31, 2023 was derived from audited annual financial statements but does not contain all of the footnote disclosures from the annual financial statements.

The Company’s Condensed Consolidated Financial Statements have been prepared on a going concern basis, which contemplates the realization of assets and satisfaction of liabilities in the ordinary course of business. In accordance with FASB ASU No. 2014-15, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern (Subtopic 205-40), the Company has concluded there are conditions and events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date that the Condensed Consolidated Financial Statements are issued. The Condensed Consolidated Financial Statements do not include any adjustments that might result from the outcome of this uncertainty.

(b)Use of Estimates and Assumptions

The preparation of the Company’s Condensed Consolidated Financial Statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts and disclosure of revenue, expenses and certain assets and liabilities at the balance sheet date. Such estimates include the performance obligations under the Company’s collaboration agreements; the collectability of receivables; and the value of certain investments and liabilities. Actual results may differ from such estimates. These interim results are not necessarily indicative of results to be expected for a full year or subsequent interim periods.

Cash equivalents consist of highly liquid investments purchased with original maturities of three months or less. All other investments are marketable securities.

The Company classified $0.5 million of its cash as restricted cash as of both September 30, 2024 and December 31, 2023. These amounts represent the security deposit associated with the Company’s Lexington, Massachusetts headquarters.

The Company’s short-term investments are marketable debt securities with original maturities of greater than three months from the date of purchase, but less than 12 months from the balance sheet date. Marketable securities consist of commercial paper, corporate bonds and notes, and/or government obligations. All of the Company’s investments have been designated available-for-sale and are stated at fair value. Unrealized gains and losses on investments are included in accumulated other comprehensive income (loss) as a separate component of stockholders’ equity (deficit). Interest income is included in other income (expense) in the period during which it is earned. Any premium or discount arising at purchase is amortized and/or accreted to interest income.

(d)Leases

The Company determines if an arrangement is a lease at contract inception. The Company made an accounting policy election to not recognize leases with an initial term of 12 months or less within its Condensed Consolidated Balance Sheets and to recognize those lease payments on a straight-line basis in its Condensed Consolidated Statements of Operations and Comprehensive Loss over the lease term. Operating lease assets represent the Company's right to use an underlying asset for the lease term and operating lease liabilities represent its obligation to make lease payments arising from the lease. Operating lease assets and liabilities are recognized at the commencement date of the lease based upon the present value of lease payments over

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the lease term. When determining the lease term, the Company includes options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option.

As the Company’s lease does not provide an implicit interest rate, the Company uses its incremental borrowing rate, which is based on rates that would be incurred to borrow on a collateralized basis over a term equal to the lease payments in a similar economic environment, in determining the present value of lease payments.

The lease payment used to determine the operating lease asset may include lease incentives and stated rent increases and was recognized as an operating lease right-of-use asset in the Condensed Consolidated Balance Sheets. The Company’s lease agreements may include both lease and non-lease components, which may be accounted for as a single lease component when the payments are fixed. Variable payments included in the lease agreement are expensed as incurred.

The Company’s operating lease is reflected in operating lease right-of-use asset and operating lease liability in the Condensed Consolidated Balance Sheets. Lease expense for lease payments is recognized on a straight-line basis over the lease term.

(e)Other Assets

Other assets consist of long-term prepayments and deposits.

(f)Revenue Recognition

The Company applies the revenue recognition guidance in accordance with FASB Codification Topic 606, Revenue from Contracts with Customers.

The Company recognizes royalty revenues related to Genentech’s and Roche’s sales of Erivedge. For arrangements that include sales-based royalties, including milestone payments based on the level of sales, and where the license is deemed to be the predominant item to which the royalties relate, the Company recognizes revenue at the later of (i) when the related sales occur, or (ii) when the performance obligation to which some or all of the royalty has been allocated has been satisfied (or partially satisfied). The Company expects to continue recognizing royalty revenue from Genentech’s sales of Erivedge in the U.S. and Roche's sales of Erivedge outside of the U.S. (see Note 8, Research and Development Collaborations). However, a significant portion of Erivedge royalties will be paid to the Purchasers pursuant to the Oberland Purchase Agreement (see Note 7, Liability Related to the Sale of Future Royalties).

(g)Segment Reporting

The Company has determined that it operates in a single reportable segment, which is the research and development of innovative drug candidates for the treatment of human cancer.

(h)New Accounting Pronouncements

Issued, Not Yet Adopted

In November 2023, the FASB issued ASU No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which provides updates to qualitative and quantitative reportable segment disclosure requirements, including enhanced disclosures about significant segment expenses and increased interim disclosure requirements, among others. ASU No. 2023-07 is effective for fiscal years beginning after December 15, 2023, and interim periods in fiscal years beginning after December 15, 2024. Early adoption is permitted, and the amendments should be applied retrospectively. The Company is currently evaluating the impact of the ASU on the Consolidated Financial Statement disclosures.

In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which requires disclosure of disaggregated income taxes paid, prescribes standard categories for the components of the effective tax rate reconciliation, and modifies other income tax-related disclosures. ASU No. 2023-09 is effective for fiscal years beginning after December 15, 2024 and allows for adoption on a prospective basis, with a retrospective option. Early adoption is permitted. The Company is currently evaluating the impact of the ASU on the income tax disclosures within the Consolidated Financial Statements.

In March 2024, the SEC approved a rule that will require registrants to provide certain climate-related information in their registration statements and annual reports. The rule requires information about a registrant's climate-related risks that have materially impacted or are reasonably likely to have a material impact on its business, results of operations, or financial condition. The required information about climate-related risks also includes disclosure of a registrant's greenhouse gas emissions. In addition, the rules will require registrants to present certain climate-related financial metrics in their audited financial statements. On April 4, 2024, the SEC voluntarily stayed implementation of this new rule pending judicial review. The Company is evaluating the potential impact of this rule on the Consolidated Financial Statements and related disclosures.

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In November 2024, the FASB issued ASU-2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Topic 220): Disaggregation of Income Statement Expenses. The ASU requires additional disclosures of the nature of the expenses included in the income statement, including disaggregation of the expense captions presented on the Consolidated Statements of Operations into specific categories. ASU No. 2024-03 is effective for fiscal years beginning after December 15, 2026, and for interim periods beginning after December 15, 2027and allows for adoption on a prospective basis, with a retrospective option. Early adoption is permitted. The Company is currently evaluating the impact of the ASU on the Consolidated Financial Statement disclosures.

3. Fair Value of Financial Instruments

The Company applies the provisions of FASB Codification 820, Fair Value Measurements (“ASC 820”) for its financial assets and liabilities that are re-measured and reported at fair value each reporting period and the non-financial assets and liabilities that are re-measured and reported at fair value on a non-recurring basis. Fair value is the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining fair value, the Company considers the principal or most advantageous market in which it would transact and considers assumptions that market participants would use when pricing the asset or liability. ASC 820 establishes a three-level valuation hierarchy for disclosure of fair value measurements. Financial assets and liabilities are categorized within the valuation hierarchy based upon the lowest level of input that is significant to the measurement of fair value. The three levels of the hierarchy are defined as follows:


Level 1			Quoted prices in active markets for identical assets or liabilities.

Level 2			Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

Level 3			Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

In accordance with the fair value hierarchy, the following tables show the fair value as of September 30, 2024 and December 31, 2023 of those financial assets and liabilities that are measured at fair value on a recurring basis, according to the valuation techniques the Company used to determine their fair value.


(in thousands)	Quoted Prices in Active Markets (Level 1)		Other Observable Inputs (Level 2)		Unobservable Inputs (Level 3)		Fair Value
As of September 30, 2024:
Cash equivalents:
Money market funds	$	19,006	$	—	$	—	$	19,006






Total	$	19,006	$	—	$	—	$	19,006


(in thousands)	Quoted Prices in Active Markets (Level 1)		Other Observable Inputs (Level 2)		Unobservable Inputs (Level 3)		Fair Value
As of December 31, 2023:
Cash equivalents:
Money market funds	$	16,780	$	—	$	—	$	16,780
U.S. treasury securities and government agency obligations	—		4,735		—		4,735
Corporate debt securities and commercial paper	—		2,021		—		2,021
Short-term investments:
Corporate debt securities and commercial paper	—		12,996		—		12,996
U.S. treasury securities and government agency obligations	—		16,657		—		16,657



Total	$	16,780	$	36,409	$	—	$	53,189

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4. Investments

The amortized cost, unrealized gains and losses and fair value of investments available-for-sale as of December 31, 2023 are as follows:


(in thousands)	Amortized Cost		Unrealized Gain		Unrealized Loss		Fair Value
Short-term investments:
Corporate debt securities and commercial paper	$	12,999	$	—	$	(3)	$	12,996
U.S. treasury securities and government agency obligations	16,655		3		(1)		16,657



Total investments	$	29,654	$	3	$	(4)	$	29,653

The weighted average maturity of short-term investments was 0.2 years at December 31, 2023.

No credit losses on available-for-sale securities were recognized during the three and nine months ended September 30, 2023. In its evaluation to determine expected credit losses, management considered all available historical and current information, expectations of future economic conditions, the type of security, the credit rating of the security, and the size of the loss position, as well as other relevant information. As of September 30, 2024, all of the Company's investments have matured.

As of December 31, 2023, the Company held no investments that were in a continuous unrealized loss position for 12 months or longer.

5. Accrued Liabilities

Accrued liabilities consisted of the following:


(in thousands)	September 30, 2024		December 31, 2023
Employee related costs	$	2,971	$	3,701
Research and development costs	4,380		4,163
Professional and legal fees	782		1,059


Other	8		117
Total	$	8,141	$	9,040

6. Lease

The Company has a single lease for real estate, including laboratory and office space, and certain equipment, in Lexington, Massachusetts which commenced on May 1, 2020.

A portion of the Company’s leased space is subject to an early termination option that becomes effective on the lease commencement date of a new lease for larger premises within the landlord’s commercial real estate portfolio. The landlord had the option to early terminate the lease agreement by providing written notice to the Company eighteen months prior to December 31, 2025, or by June 30, 2024. The Company previously expected the lease to end as of December 31, 2025, and the Company no longer expects the lease to end early, which was accounted for as a lease modification. The lease will expire on April 30, 2027. During the nine months ended September 30, 2024, the Company recognized an increase of $1.4 million to the lease liability and right-of-use asset as a result of the lease modification.

As of September 30, 2024, the Company had an operating lease liability of $3.3 million and related right-of-use asset of $3.5 million related to its operating lease. As of December 31, 2023, the Company had an operating lease liability of $2.8 million and related right-of-use asset of $3.1 million related to its operating lease.

The Company recorded lease cost of $0.4 million during both the three months ended September 30, 2024 and 2023 and $1.2 million during both the nine months ended September 30, 2024 and 2023. The Company paid $0.4 million in rent for both the three months ended September 30, 2024 and 2023 and $1.1 million in rent for both the nine months ended September 30, 2024 and 2023. The discount rate associated with the Company’s lease liability is 10%.

7. Liability Related to the Sale of Future Royalties

In March 2019, the Company and Curis Royalty entered into the Oberland Purchase Agreement with the Purchasers and the Agent, as collateral agent for the Purchasers. The Company sold to the Purchasers a portion of its rights to receive royalties from Genentech on potential net sales of Erivedge.

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As upfront consideration for the purchase of the royalty rights, the Purchasers paid to Curis Royalty $65.0 million less certain transaction expenses. Curis Royalty will also be entitled to receive up to $53.5 million in milestone payments based on sales of Erivedge if the Purchasers receive payments pursuant to the Oberland Purchase Agreement in excess of $117.0 million on or prior to December 31, 2026.

The Oberland Purchase Agreement provides that after the occurrence of an event of default as defined under the security agreement by Curis Royalty, the Purchasers shall have the option, for a period of 180 days, to require Curis Royalty to repurchase a portion of certain royalty and royalty related payments, excluding a portion of non-U.S. royalties retained by Curis Royalty (referred to as the “Purchased Receivables”), at a price (referred to as the “Put/Call Price”), equal to 250% of the sum of the upfront purchase price and any portion of the milestone payments paid in a lump sum by the Purchasers, if any, minus certain payments previously received by the Purchasers with respect to the Purchased Receivables. The Company concluded that this put option is an embedded derivative that requires bifurcation from the deferred royalty obligation and evaluates the fair value of the put option each reporting period. The estimated fair value of the put option is immaterial as of both September 30, 2024 and December 31, 2023. Additionally, Curis Royalty shall have the option at any time to repurchase the Purchased Receivables at the Put/Call Price as of the date of such repurchase. No events of default occurred as of September 30, 2024.

As a result of the obligation to pay future royalties to the Purchasers, the Company recorded the proceeds as a liability on its Condensed Consolidated Balance Sheets. It accounts for the liability and interest expense using the interest method over the expected life of the Oberland Purchase Agreement. As a result, the Company imputes interest on the transaction and records imputed interest expense at the estimated interest rate. The Company’s estimate of the interest rate under the Oberland Purchase Agreement is based on the amount of royalty payments expected to be received by the Purchasers over the life of the Oberland Purchase Agreement and is currently zero. The projected amount of royalty payments expected to be paid to the Purchasers involves the use of significant estimates and assumptions with respect to the revenue growth rate in the Company’s projections of sales of Erivedge. The Company periodically assesses the expected royalty payments to Curis Royalty from Genentech using a combination of historical results and forecasts from market data sources. To the extent such payments are greater or less than the current estimates or the timing of such payments is materially different than the original estimates, the Company prospectively adjusts the amortization of the liability.

The Company determined the fair value of the liability related to the sale of future royalties at the time of the Oberland Purchase Agreement to be $65.0 million. The Company incurred $0.6 million of transaction costs in connection with the Oberland Purchase Agreement. These transaction costs will be amortized to imputed interest expense over the estimated term of the Oberland Purchase Agreement.

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The following table shows the activity with respect to the liability related to the sale of future royalties during the nine months ended September 30, 2024.


(in thousands)
Carrying value of liability related to the sale of future royalties at January 1, 2024	$	42,606

Other	(236)
Less: payments to the Purchasers	(6,381)
Carrying value of liability related to the sale of future royalties at September 30, 2024	35,989
Less current portion	8,783
Carrying value of liability related to the sale of future royalties at September 30, 2024, net of current portion	27,206

The Company has revised the liability related to the sale of future royalties, net to adjust for an immaterial misclassification of the presentation of this liability between long term and short term. A summary of adjustments as of March 31, 2024, December 31, 2023 and 2022 are as follows:


	As Previously reported	Adjustment	As Revised
March 31, 2024
Current portion of liability related to sale of future royalties	—	8,793	8,793
Liability related to sale of future royalties, net	40,122	(8,793)	31,329
December 31, 2023
Current portion of liability related to sale of future royalties	—	8,504	8,504
Liability related to sale of future royalties, net	42,606	(8,504)	34,102
December 31, 2022
Current portion of liability related to sale of future royalties	—	6,257	6,257
Liability related to sale of future royalties, net	49,483	(6,257)	43,226

The revisions increased total current liabilities by the amounts noted above and have no impact on total liabilities for any of the periods presented. The revisions did not impact the statement of operations and comprehensive loss, the statement of cash flows, or the statement of stockholders' equity (deficit).

In March 2023, Curis and Curis Royalty received a letter from counsel to Oberland Capital Management, LLC, the Purchasers and the Agent alleging certain defaults of the Oberland Purchase Agreement and demanding cure of one of the asserted defaults. The Purchasers have not attempted to exercise the put option. Curis and Curis Royalty dispute these allegations. If Oberland elects to pursue these claims, and if Curis and Curis Royalty are unsuccessful in defending against these claims, it could have a material adverse impact on Curis and Curis Royalty, including their ability to continue as a going concern. The Company has not received any further communication on this topic from counsel to Oberland Capital Management, LLC, the Purchasers or the Agent since the March 2023 letter. As of September 30, 2024, the estimated amount of the Put/Call Price is $41.0 million.

8. Research and Development Collaborations

(a)Genentech

In June 2003, the Company licensed its proprietary Hedgehog pathway antagonist technologies to Genentech for human therapeutic use. The primary focus of the collaboration is Erivedge, which is being commercialized by Genentech in the U.S. and by Genentech’s parent company, Roche, outside of the U.S. for the treatment of advanced BCC.

Pursuant to the collaboration agreement, the Company is entitled to a royalty on net sales of Erivedge that ranges from 5% to 7.5%. The royalty rate applicable to Erivedge may be decreased by 2% on a country-by-country basis in certain specified circumstances. Cost of royalties comprises payments to university licensors and was not material for the three and nine months ended September 30, 2024 and 2023.

The Company had account receivables from Genentech under this collaboration of $3.0 million and $2.7 million as of September 30, 2024 and December 31, 2023, respectively, in its Condensed Consolidated Balance Sheets.

As previously discussed in Note 7, Liability Related to the Sale of Future Royalties, a significant portion of royalty revenues received from Genentech on net sales of Erivedge will be paid to the Purchasers pursuant to the Oberland Purchase Agreement.

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(b)Aurigene

The Company is party to an exclusive collaboration agreement with Aurigene for the discovery, development and commercialization of small molecule compounds in the areas of immuno-oncology and selected precision oncology targets. Under the collaboration agreement, Aurigene granted the Company an option to obtain exclusive, royalty-bearing licenses to relevant Aurigene technology to develop, manufacture and commercialize products containing certain of such compounds anywhere in the world, except for India and Russia, which are territories retained by Aurigene.

As of September 30, 2024, the Company has licensed the following programs under the collaboration:

1.IRAK4 Program - a precision oncology program of small molecule inhibitors of IRAK4. The development candidate is emavusertib.

2.PD1/TIM3 Program - an immuno-oncology program of small molecule antagonists of PD1 and TIM3 immune checkpoint pathways. The development candidate is CA-327.

3.An immuno-oncology program.

In September 2024, Aurigene expanded its rights to develop and commercialize CA-170 worldwide, whereas such rights had previously been limited to development and commercialization in India, Russia, and the rest of Asia. CA-170 is a PD1/VISTA program that was previously licensed by the Company. The Company is entitled to receive royalty payments on potential future sales of CA-170 at percentage rates ranging from the high single digits up to 10%, subject to specified reductions. In addition, the Company is entitled to receive a low double-digit percentage of Aurigene’s sublicensing revenues subject to specified reductions.

For each of the IRAK4, PD1/TIM3, and the immuno-oncology programs, the Company is obligated to use commercially reasonable efforts to develop, obtain regulatory approval for, and commercialize at least one product in each of the U.S., specified countries in the European Union and Japan. Aurigene is obligated to use commercially reasonable efforts to perform its obligations under the development plan for its licensed programs.

For each of the IRAK4, PD1/TIM3, and the immuno-oncology programs, the Company has remaining unpaid or unwaived payment obligations of $42.5 million per program, related to regulatory approval and commercial sales milestones, plus specified additional payments for approvals for additional indications, if any.

9. Common Stock

In May 2024, the Company's stockholders approved an increase to the number of authorized shares of its common stock from 22,781,250 shares to 34,171,875 shares.

Sales Agreement with Cantor Fitzgerald & Co. and JonesTrading Institutional Services LLC

In March 2021, the Company entered into a sales agreement (the “2021 Sales Agreement”) with Cantor Fitzgerald & Co. (“Cantor”) and JonesTrading Institutional Services LLC (“JonesTrading”). In February 2024, the Company entered into an amended and restated sales agreement with Cantor and JonesTrading (the “2024 Sales Agreement”), which supersedes the 2021 Sales Agreement. Pursuant to the 2024 Sales Agreement, the Company can sell from time to time shares of the Company’s common stock through an “at-the-market offering” program under which Cantor and JonesTrading act as sales agents. Subject to the terms and conditions of the 2024 Sales Agreement, Cantor and JonesTrading can sell the common stock by any method deemed to be an “at-the-market” offering as defined in Rule 415 promulgated under the Securities Act.

Pursuant to the terms of the 2024 Sales Agreement, the aggregate compensation payable to each of Cantor and JonesTrading is 3% of the gross proceeds from sales of the common stock sold by Cantor or JonesTrading, as applicable. The Company sold 120,356 and 140,032 shares of common stock under the 2024 Sales Agreement representing gross proceeds of $0.8 million and $1.0 million during the three and nine months ended September 30, 2024, respectively. As of September 30, 2024, $99.0 million of shares of common stock remained available for sale under the 2024 Sales Agreement.

October 2024 Offerings

In October 2024, the Company entered into a securities purchase agreement with certain institutional investors , pursuant to which the Company agreed to sell and issue: (i) in a registered direct offering, 2,398,414 shares of the Company's common stock and (ii) in a concurrent private placement, unregistered warrants to purchase up to an aggregate of 2,398,414 shares of the Company's common stock (the “Unregistered Warrants”), at an exercise price of $4.92 per share. The registered direct offering and concurrent private placement are collectively referred to as the "October 2024 Offerings". The Unregistered Warrants were exercisable immediately upon closing on October 30, 2024 and will expire five years following the issuance date. The combined purchase price for one share of common stock and the associated Unregistered Warrant was $5.045. The net proceeds to the Company from the October 2024 Offerings were approximately $10.8 million, excluding the proceeds from any exercise of the Unregistered Warrants.

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10. Stock Plans and Stock-Based Compensation

As of September 30, 2024, the Company had two stockholder-approved, stock-based compensation plans: (i) the Fifth Amended and Restated 2010 Stock Incentive Plan (“2010 Plan”) and (ii) the Amended and Restated 2010 Employee Stock Purchase Plan, as amended (“ESPP”). New employees are generally issued options as an inducement equity award under Nasdaq Listing Rule 5635(c)(4) outside of the 2010 Plan (“Inducement Awards”).

The Fifth Amended and Restated 2010 Stock Incentive Plan

The 2010 Plan permits the granting of incentive and non-qualified stock options and stock awards to employees, officers, directors, and consultants of the Company and its subsidiaries at prices determined by the Company’s board of directors. In May 2024, the Company's stockholders approved the amendment and restatement of the 2010 Plan to reserve an additional 942,100 shares of common stock for issuance under the 2010 Plan. The Company can issue up to 2,101,600 shares of its common stock pursuant to awards granted under the 2010 Plan. Options vest and become exercisable based on a schedule determined by the board of directors and expire up to ten years from the date of grant. The 2010 Plan uses a “fungible share” concept under which each share of stock subject to awards granted as options and stock appreciation rights (“SARs”) will cause one share per share under the award to be removed from the available share pool, while each share of stock subject to awards granted as restricted stock, restricted stock units, other stock-based awards or performance awards where the price charged for the award is less than 100% of the fair market value of the Company’s common stock will cause 1.3 shares per share under the award to be removed from the available share pool. As of September 30, 2024, the Company has only granted options to purchase shares of the Company’s common stock with an exercise price equal to the closing market price of the Company’s common stock on the Nasdaq Capital Market on the grant date and issued restricted stock awards ("RSAs") at no cost to Company employees, excluding officers. As of September 30, 2024, 956,366 shares remained available for grant under the 2010 Plan.

During the nine months ended September 30, 2024, the Company’s board of directors granted options to purchase 457,670 shares of the Company’s common stock to officers and employees of the Company under the 2010 Plan. These options vest and become exercisable as to 25% of the shares underlying the awards after the first year and as to an additional 6.25% of the shares underlying the awards in each subsequent quarter, based upon continued employment over a four year period, and are exercisable at a price equal to the closing market price of the Company’s common stock on the grant date.

During the nine months ended September 30, 2024, the Company’s board of directors granted options to its non-employee directors to purchase 21,250 shares of common stock under the 2010 Plan, which will vest and become exercisable in one year from the date of grant. These options were granted at an exercise price that equaled the closing market price of the Company’s common stock on the grant date.

Inducement Awards

The Company grants Inducement Awards to certain new employees. These options generally vest as to 25% of the shares underlying the option on the first anniversary of the grant date, and as to an additional 6.25% of the shares underlying the option on each successive quarter thereafter. During the nine months ended September 30, 2024, the Company’s board of directors granted Inducement Awards to purchase 39,350 shares of common stock. These options are granted at an exercise price that equals the closing market price of the Company’s common stock on the grant date.

Stock Options

A summary of stock option activity under the 2010 Plan and Inducement Awards are summarized as follows:


	Number of Shares	Weighted Average Exercise Price per Share		Weighted Average Remaining Contractual Life	Aggregate Intrinsic Value
Outstanding, December 31, 2023	840,880	$	47.58	7.16
Granted	518,270	11.39
Exercised	—	—
Canceled/Forfeited	(198,899)	45.82
Outstanding, September 30, 2024	1,160,251	$	33.44	7.45	$	1
Exercisable at September 30, 2024	551,464	$	55.86	5.65	$	—
Vested and unvested expected to vest at September 30, 2024	1,160,251	$	33.44	7.45	$	1

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The weighted average grant date fair values of the stock options granted during the nine months ended September 30, 2024 and 2023 were $9.50 and $12.00, respectively, and were calculated using the following estimated assumptions under the Black-Scholes option pricing model:


	Nine Months Ended September 30,
	2024	2023
Expected term (years)	6	5.5


Risk free interest rate	3.9% - 4.5%	3.5% - 3.6%
Expected volatility	114% - 116%	115% - 116%
Expected dividends	None	None

As of September 30, 2024, there was $6.8 million of unrecognized compensation cost related to unvested employee stock option awards outstanding, which is expected to be recognized as expense over a weighted average period of 2.4 years. There were no employee stock options exercised during the nine months ended September 30, 2024. The intrinsic value of employee stock options exercised during the nine months ended September 30, 2023 was not material.

Restricted Stock Awards

The following table presents a summary of unvested RSAs under the 2010 Plan as of September 30, 2024:


	Number of Shares	Weighted Average Grant Date Fair Value
Unvested, December 31, 2023	110,500	$	18.20
Awarded	—	—
Vested	(65,988)	18.20
Forfeited	(4,375)	18.20
Unvested, September 30, 2024	40,137	$	18.20

As of September 30, 2024, there were 40,137 shares outstanding underlying RSAs that are expected to vest. As of September 30, 2024, there was $0.4 million of unrecognized compensation costs related to RSAs, which are expected to be recognized as expense over a remaining weighted average period of 0.6 years. The fair value of RSAs that vested during the nine months ended September 30, 2024 was $1.0 million. There were no RSAs that vested during the nine months ended September 30, 2023. The weighted average grant date fair value of RSAs granted during the nine months ended September 30, 2023 was $18.20.

Amended and Restated 2010 Employee Stock Purchase Plan, as amended

In May 2024, the Company's stockholders approved an amendment to the ESPP to reserve an additional 400,000 shares of common stock for issuance under the ESPP. The Company has reserved 500,000 shares of common stock for issuance under the ESPP. Eligible employees may purchase shares of the Company’s common stock at 85% of the lower closing market price of the common stock at the beginning of the enrollment period or ending date of the purchase period within a two-year enrollment period, as defined. The Company has four six-month purchase periods per each two-year enrollment period. If, within any one of the four purchase periods in an enrollment period, the purchase period ending stock price is lower than the stock price at the beginning of the enrollment period, the two-year enrollment resets at the new lower stock price. During the three and nine months ended September 30, 2024, 11,307 shares were issued under the ESPP. During the three and nine months ended September 30, 2023, 19,345 shares were issued under the ESPP. As of September 30, 2024, there were 415,324 shares available for future purchase under the ESPP.

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Stock-Based Compensation Expense

For the three and nine months ended September 30, 2024 and 2023, the Company recorded stock-based compensation expense to the following line items in its costs and expenses section of the Condensed Consolidated Statements of Operations and Comprehensive Loss:


	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands)	2024		2023		2024		2023
Research and development expenses	$	624	$	776	$	2,168	$	2,059
General and administrative expenses	760		857		2,479		2,393
Total stock-based compensation expense	$	1,384	$	1,633	$	4,647	$	4,452

11. Loss Per Common Share

Basic and diluted loss per common share is computed by dividing net loss attributable to common stockholders by the weighted average number of common shares outstanding during the period. Diluted net loss per common share is the same as basic net loss per common share for the three and nine months ended September 30, 2024 and 2023, because the effect of adjusting the weighted average number of common shares outstanding during the period for the potential dilutive effect of common stock equivalents would be antidilutive due to the Company’s net loss position for these periods. Antidilutive securities consist of stock options outstanding of 1,160,251 and 840,366 and unvested RSAs of 40,137 and 114,500 as of September 30, 2024 and 2023, respectively.

Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion of our financial condition and results of operations should be read in conjunction with the Condensed Consolidated Financial Statements and the related notes appearing elsewhere in this report. Some of the information contained in this discussion and analysis and set forth elsewhere in this report, including information with respect to our plans and strategy for our business, includes forward-looking statements, based on current expectations and related to future events and our future financial and operational performance, that involve risks and uncertainties. You should review the discussion above 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, 2023, and, if applicable, those included under Part II, Item 1A of this Quarterly Report on Form 10-Q, for a discussion of important factors that could cause actual results to differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis. As used throughout this report, the terms “the Company,” “we,” “us,” and “our” refer to the business of Curis, Inc. and its wholly owned subsidiaries, except where the context otherwise requires, and the term “Curis” refers to Curis, Inc.

Overview

Emavusertib

We are a biotechnology company focused on the development of emavusertib (CA-4948), an orally available, small molecule inhibitor of Interleukin-1 receptor associated kinase, or IRAK4. IRAK4 plays an essential role in the toll-like receptor, or TLR, and interleukin-1 receptor, or IL-1R, signaling pathways, which are frequently dysregulated in patients with cancer. TLRs and the IL-1R family signal through the adaptor protein Myeloid Differentiation Primary Response Protein 88, which results in the assembly and activation of IRAK4, initiating a signaling cascade that induces cytokine and survival factor expression mediated by the NF-κB protein complex. Many B-cell leukemias and lymphomas are associated with constitutive activation of the NF-κB protein complex which contributes to these cancer’s proliferation and survival. The B-cell receptor, or BCR, and TLR pathways drive NF-κB activation. Preclinical studies demonstrated that targeting both the BCR and TLR pathways was more synergistic than targeting either pathway alone. Similarly, preclinical studies targeting IRAKi in combination with FMS‐like tyrosine kinase 3, or FLT3, have demonstrated the ability to overcome the adaptive resistance incurred when targeting FLT3 alone. In acute myeloid leukemia, or AML, patient derived xenografts, emavusertib has shown monotherapy anti-tumor activity as well as synergy with both azacitidine and venetoclax. In the clinic, emavusertib has shown anti-tumor activity across a broad range of hematologic malignancies including monotherapy activity in AML, particularly those with a FLT3 mutation. In non-Hodgkin's lymphoma patients, particularly in primary central nervous system lymphoma, or PCNSL, emavusertib has shown anti-tumor activity in combination with a Bruton Tyrosine Kinase, or BTK, inhibitor.

In May 2024, we streamlined our operations to focus on the TakeAim Lymphoma Phase 1/2 study, portions of the TakeAim Leukemia Phase 1/2 study, our AML Triplet study, and ongoing investigator-sponsored studies in solid tumors. We

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intend to complete the planned enrollment in the TakeAim Leukemia Phase 1/2 study and we deprioritized other efforts resulting in an approximate 30% reduction in our workforce.

TakeAim Leukemia

Emavusertib is currently undergoing testing in a Phase 1/2 open-label, single arm expansion trial in patients with relapsed or refractory, or R/R, AML and high-risk myelodysplastic syndromes, or hrMDS, also known as the TakeAim Leukemia Phase 1/2 study. In January and December 2022, July and December 2023, and May 2024, we presented clinical data for patients from the ongoing TakeAim Leukemia Phase 1/2 study. We expect additional data from this study in December 2024.

TakeAim Lymphoma

In addition to the TakeAim Leukemia Phase 1/2 study, we are testing emavusertib in combination with ibrutinib, a BTK inhibitor, in a Phase 1/2 open-label, single arm expansion trial in patients with R/R PCNSL, also known as the TakeAim Lymphoma Phase 1/2 study. In June 2022 and December 2023, we provided preliminary clinical data for patients with various hematological malignancies in the combination portion of the ongoing TakeAim Lymphoma Phase 1/2 study. In December 2023, we provided clinical and safety data of emavusertib in combination with ibrutinib in several non-Hodgkin's lymphoma subtypes including PCNSL patients. In September 2024, we provided additional clinical data of emavusertib in combination with ibrutinib in R/R PCNSL. We expect additional data from this study in December 2024 as well as in the first quarter of 2025.

AML Triplet Study

We have initiated a Phase 1 clinical study of emavusertib as an add-on agent to the combination of azacitidine and venetoclax to assess the safety of the triplet regimen in AML, which we refer to as the AML Triplet study. The AML Triplet study is currently being conducted in Spain, Germany, and Italy. We expect initial safety data from this study in the first quarter of 2025.

Our Collaborations and License Agreements

We are party to a collaboration agreement with Genentech Inc., or Genentech, a member of the Roche Group, under which Genentech and F. Hoffmann-La Roche Ltd, or Roche, are commercializing Erivedge® (vismodegib), a first-in-class orally administered small molecule Hedgehog signaling pathway antagonist. Erivedge is approved for the treatment of advanced basal cell carcinoma.

In January 2015, we entered into an exclusive collaboration agreement with Aurigene Discovery Technologies Limited, or Aurigene, for the discovery, development and commercialization of small molecule compounds in the areas of immuno-oncology and precision oncology. We have licensed programs under the Aurigene collaboration, including emavusertib. In September 2024, we agreed that Aurigene would expand its rights to develop and commercialize CA-170 worldwide, whereas such rights had previously been limited to development and commercialization in India, Russia, and the rest of Asia. CA-170 is a PD1/VISTA program that we previously licensed.

Liquidity

Since our inception, we have funded our operations primarily through private and public placements of our equity securities, license fees, contingent cash payments, royalties and research and development funding from our corporate collaborators, and the monetization of certain royalty rights. We have never been profitable on an annual basis and had an accumulated deficit of $1.2 billion as of September 30, 2024. For the nine months ended September 30, 2024, we incurred a net loss of $33.8 million and used $30.3 million of cash in operations.

We expec

SEC Form 10-Q filed by Curis Inc.