curis, snapshot november 2016

CURIS, SCREENSHOT – NOVEMBER 2016

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Curis


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DISCLAIMER

This report (Report) has been produced independently by QStat Consulting. The intent of this Report is to provide a structured example of QStat Consulting’s service and to provide information for the public. The views expressed in this Report are not necessarily the views of QStat Consulting. The information, statements, statistics and commentary (together the ‘Information’) contained in this Report have been prepared by QStat Consulting from publicly available material and from discussions held with stakeholders. QStat Consulting does not express an opinion as to the accuracy or completeness of the information provided, the assumptions made by the parties that provided the information or any conclusions reached by those parties. QStat Consulting has based this Report on information received or obtained, on the basis that such information is accurate and, where it is represented to QStat Consulting as such, complete. The information contained in this Report has not been subject to an audit. All expressions of opinion are subject to change without notice, and the Authors do not undertake to update this Report or any information contained herein. This Report remains the property of QStat Consulting and any effort to use this Report as an actual and factual appraisal Report is not permitted.


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CASE ABSTRACT

Curis Therapeutics (Company) was incorporated on February 14, 2000 and trades on the NASDAQ Global Market (NASDAQ:CRIS). Headquartered in Lexington, Massachusetts, it is a clinical-stage biopharmaceutical company engaged in developing and commercializing therapeutics for the regeneration and restoration of human tissues and organs. The Company is engaged in the development and commercialization of drug candidates for the treatment of human cancers. The Company's drug candidate, CUDC-907, is an orally available, small molecule inhibitor of histone deacetylase (HDAC) and phosphatidylinositol-3-kinase (PI3K) enzymes. Specifically, CUDC-907 is designed to inhibit HDACs 1, 2, 3, 6 and 10 and PI3K-alpha, delta and beta isoforms. CUDC-907 can be indicated for antitumor activity in various hematologic tumor models, such as non-Hodgkin's lymphoma and multiple myeloma. CA-170 is an oral small molecule drug candidate designed to selectively target programmed death ligand 1 (PD-L1) and VISTA checkpoint proteins, both of which independently function as negative regulators of immune activation. CA-4948 is an oral small molecule drug candidate that is designed to inhibit the interleukin-1 receptor-associated kinase 4 (IRAK4) kinase, which is a transducer of toll-like receptor or certain interleukin receptor signaling pathways. These signaling pathways are shown to be involved in certain human cancers and inflammatory diseases. Erivedge is an orally bioavailable small molecule, and is designed to selectively inhibit the Hedgehog signaling pathway. The Hedgehog signaling pathway is active during embryonic development and unregulated activation of the pathway and plays a role in allowing the proliferation and survival of cancer cells and leading to formation and maintenance of certain cancers. Erivedge is indicated for adults with advanced forms of basal-cell carcinoma (BCC). CUDC-427 is an oral, small molecule Smac mimetic that is designed to promote cancer cell death by antagonizing inhibitor of apoptosis (IAP) proteins. CUDC-305 is an oral HSP90 inhibitor for the development in advanced lung cancer. Number of patents as owner: 247 Number of patents as third party: 5


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(2015, 10K Annual report) Drug Candidate Primary Disease Collaborator/Licensee Current Status CUDC-907

Relapsed, refractory DLBCL with MYC alterations

Internal development

Phase 2 –ONGOING Ph2 IN 2016- (12/31/2017 Phase 2 data due 2017)

Solid tumors including NUT midline carcinoma

Internal development

Phase 1 –RECRUITING Ph1 IN 2016- 01 Oct 2016 Phase-I clinical trials in Lymphoma (In adolescents, In children, In infants, Second-line therapy or greater, In adults) in USA (PO) (NCT02909777) 01 Oct 2016 Phase-I clinical trials in Solid tumours (Second-line therapy or greater, In adolescents, In adults, In children, In infants) in USA (PO) (NCT02909777) 13 Sep 2016 Curis plans a phase I trial for Solid tumors and Lymphoma (Second-line therapy, In infants, In children, In adolescents, In adults) in USA (NCT02909777)

CA-170

Cancers

Aurigene

Pre-IND –RECRUITING Ph1 IN 2016- 01 Jun 2016 Phase-I clinical trials in Lymphoma (Late-stage disease) in USA (PO) (NCT02812875) 01 Jun 2016 Phase-I clinical trials in Solid tumors (Late-stage disease) in USA (PO) (NCT02812875) 01 Jun 2016 US FDA approves IND application for CA 170 in Cancer

CA-4948

Hematologic cancers

Aurigene

Pre-IND –ON-HOLD- 29 Feb 2016 Curis plans a phase I trial for Haematological malignancies in USA (Curis, Form 10-K, February 2016) 07 Oct 2015 Curis exercises its option to exclusively license small molecule antagonists of Interleukin-1 receptor-associated kinase 4 (IRAK4)


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Erivedge Advanced BCC

Genentech (Roche)

Approved in US, Australia and other countries and conditional approval in the EU

Preceding excision and multiple BCC

Roche

Phase 2 –RECRUITING Ph2 IN 2016-

Idiopathic Pulmonary Fibrosis

Roche

Phase 1b –RECRUITING Ph1 IN 2016-

Myelofibrosis Roche Phase 1b –RECRUITING Ph1 IN 2016- CUDC-427

Advanced solid tumor & lymphomas

Internal development; Seeking collaborator

Completed Phase 1 –ON-HOLD- 01 Apr 2016 Curis completes a phase I trial in Solid tumors and lymphomas (second-line therapy or greater; late stage disease) in USA 06 Oct 2015 Phase-I development is ongoing for Solid tumors and Lymphomas in USA 06 Oct 2015 CUDC 427 is available for licensing -http://www.curis.com/pipeline/cudc-427

CUDC-305

Cancers

Internal development; Seeking collaborator

Completed Phase 1 –ON-HOLD- 19 Jun 2015 CUDC 305 is available for licensing as of 19 Jun 2015. http://www.curis.com/ 11 May 2015 Phase-I clinical trials in Cancer in USA (PO) 01 Feb 2015 Curis re-acquires CUDC 305 from Debiopharm


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INTERNAL DEVELOPMENT

One pre-clinical and two drugs following successful Phase 1 are available for licensing (on-hold). There are currently six active recruiting clinical trials (Lymphoma - CUDC-427; Advanced Solid Tumors or Lymphomas – CA170; Relapsed and/or Refractory Diffuse Large B-cell Lymphoma – CUDC-907; NUT Midline Carcinoma; Breast Cancer; Solid Tumors – CUDC-907; Multiple Myeloma; Lymphoma – CUDC-907; Lymphoma; Neuroblastoma; Brain Tumor; Solid Tumor – CUDC-907). One trial has been terminated for adverse effects: CUDC-101 in Cancer.

Since its inception in 2000, substantially all the revenues derived from collaborations and other agreements with third parties.


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LATEST FINANCIAL NEWS

In September 2016, Aurigene received 10.2 million shares of Curis' common stock, priced at $2.40 per share, representing a 39% premium to the closing price on September 02, 2016, in lieu of receiving up to $24.5 millions of milestone and other payments from Curis.

In February 2015, the company commenced an underwritten public offering of shares of its common stock. At that time, the company expected to grant the underwriters a 30-day option to buy an additional 15% of the shares of its common stock. Later that month, the company priced the underwritten public offering of 21,818,181 shares at $2.75 each and granted the underwriters a 30-day option to purchase up to an additional 3,272,727 shares. The aggregate proceeds from the offering was expected to be $60.0 million and the offering was expected to close on or about March 02, 2015. In March 2015, the offering was closed. The company received net proceeds of about $64.7 million from the offering.


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LATEST PRESS RELEASES

(11-Oct-2016) Curis Expands Oncology Pipeline with an Oral Small Molecule PD-L1/TIM-3 Immune Checkpoint Antagonist (11-Oct-2016) Curis Reports Inducement Grants Under NASDAQ Listing Rule 5635(4) (11-Oct-2016) Aurigene Announces the Exercise of Curis' Option for CA-327 (PD-L1/TIM-3 Small Molecule Antagonist), The Third Program Under Its Collaboration, License and Option Agreement of January, 2015 (October 11, 2016, New Jersey, NJ, USA) (16-Sep-2016) Curis Reports Inducement Grants Under NASDAQ Listing Rule 5635(4) (07-Sep-2016) Aurigene to Invest in Curis at Premium Through Waiver of Certain Milestone Payments Under Collaboration Agreement


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DISCUSSION

The company is engaging a conservative strategy through product development of its leading compound CUDC-907 and divestiture of early drugs (on hold seeking outlicensing opportunities). EBITDA fell from $(8M) in 2013 to $(15M) in 2014 and $(55M) in 2015 due to increasing operating expenses (R&D). ROA, Operating/Net margin and ROE are far below the industry average.

If approved, CUDC-907 would contribute to almost 90% of Company’s income starting as early as 2018 (worldwide market).

In February 2016, an open label, single group assigned, randomized phase II trial (NCT02674750;CUDC-907-201 ) was initiated with and without rituximab in patients (n=120) with relapsed/refractory MYC-altered diffuse large B-cell lymphoma in the US. At that time, the trial was expected to complete in January 2018.


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The success rate for small molecule to advance from Phase 2 to 3 is 24%, then 65% from Phase 3 to registration; the likelihood of approval is narrowed to 8.1% in Oncology. Within Oncology, the solid tumor (B-cell lymphoma) as an average success rate of 40%. The list of competitors for CUDC-907 is quite long and fierce, though the novelty for CUDC-907 is targeting both HDAC and PI3K. However, product and price will make the difference to differentiate CUDC-907 from the market for its activity (if any) and price fights (or licensing) with other larger companies.

CONCLUSION

The market is led by large pharmaceutical companies with marketed and clinical compounds targeting B-cell lymphoma. If approved (15%, risk adjusted rate) CUDC-207, Curis would struggle to launch its compound by relying on its assets only. Curis could become a target for M&A activity confirmed also by the large interest of Roche/Genentech and financial share of Aurigene. If not approved (85%, risk adjusted rate), Curis’s pipeline would be still in the run for two more drugs, CA-170 and Erivedge in Pulmonary Fibrosis.

curis, snapshot november 2016

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