Curis, Inc. (NASDAQ: CRIS) is a biotechnology company focused on the development and commercialization of innovative and effective drug candidates for the treatment of human cancers, including CUDC-907, which is being investigated in clinical studies in patients with lymphomas and solid tumors.
Curis is also engaged in a broad collaboration with Aurigene in the areas of immuno-oncology and precision oncology. Aurigene Discovery Technologies Ltd, a wholly-owned subsidiary of India based Pharma Major, Dr. Reddy’s Laboratories Ltd. Aurigene has commercial rights to the program in India and Russia in addition to milestones, royalty’s other commercial supply rights globally.
CRIS presently has few near-term catalysts that have potential to strengthen the business risk profile of the company and therefore likely improvement in its stock performance as well.
Curis is scheduled to Present at the Society for Immunotherapy of Cancer 32nd Annual Meeting and the Cowen IO NEXT Summit on Nov. 10, 2017. In an oral presentation at the SITC Meeting, researchers will provide updated preliminary clinical trial data from the Phase 1 dose escalation stage of CA-170, a small oral molecule targeting the immune checkpoints PDL-1 and VISTA. Also, preclinical data related to combination therapy with CA-327, an oral small molecule PDL-1, VISTA and TIM-3 immune checkpoint antagonist, will be provided in a poster presentation.
The management is confident with the early results of the asset. The drug has already presented encouraging results with evidence of tumor shrinkage and multiple patients remaining on drug treatment for extended periods, along with signals for biomarkers of immune modulation in patient blood and tumor samples, validates that fact that the program continues to move in the right direction.
Both the proprietary programs, i.e. CUDC-907 and CA-170 have unique differentiating factors as both are oral administration drugs. Self-administration, less invasive, and relatively cheaper. If approved, they would be the oral administration options in their respective segments for the target indications. This could translate into a vast potential market for the company.
On the flip side, In the biotech industry, one of the primary risks is financial flexibility and liquidity. Moreover, any incremental equity also exposes the company to significant dilution risk. The company recently announced its intention to offer and sell up to 20 million shares of its common stock in an underwritten public offering. Curis intends to use the net proceeds from the offering, together with its existing cash and investments, to continue development of CUDC-907, as well as CA-170, CA-327 and CA-4948 in collaboration with Aurigene.
Revenues for the second quarter of 2017 were $2.1 million, as compared to $1.7 million for the same period in 2016. Curis reported a net loss of $14.1 million, or $0.10 per share, as compared to a net loss of $11.3 million, or $0.09 per share, for 2016. The company is scheduled to release its third quarter 2017 financial results on Tuesday, November 7, 2017.
The upcoming presentations and quarterly results are likely to be the near-term catalysts for the stock. Curis is working on oral administration cancer treatments, and if it materializes, both of its current indications have the potential to put the company on the rapid growth trajectory.
The stock currently has an average rating of “BUY” and a consensus price target of $3.50. Considering present valuation, CRIS is at a favorable risk-reward position.
About the Company: Curis is a biotechnology company focused on the development and commercialization of innovative and effective drug candidates for the treatment of human cancers. The Company currently has two drug candidates in development:
- CUDC-907, an orally available small molecule inhibitor of HDAC and PI3K enzymes being investigated in a Phase 2 clinical trial in patients with MYC-altered diffuse large B-cell lymphoma and in a Phase 1 trial in patients with MYC-altered solid tumors.
- CA-170, an orally-available small molecule antagonist of PD-L1 and VISTA immune checkpoints being investigated in a Phase 1 clinical trial in patients with advanced solid tumors or lymphomas.
Curis is engaged in a broad collaboration with Aurigene for discovery and development of drug candidates in the area of immuno-oncology. As part of this collaboration, Curis has the exclusive license to CA-170, and has also selected a second program that focuses on small molecule antagonists of PD-1 and TIM3 pathways, including compounds that target PD-L1/TIM3 immune checkpoints. Curis has also licensed the exclusive rights to orally-available small molecule inhibitors of the IRAK4 kinase, including the development candidate CA-4948 from Aurigene.
Second Quarter 2017 Financial Results:
Revenues: Revenues for the second quarter of 2017 were $2.1 million, as compared to $1.7 million for the same period in 2016. Revenues for the six months ended June 30, 2017, were $4.2 million, as compared to $3.4 million for the same period in 2016. Revenues for both periods comprise primarily royalty revenues recorded on Genentech and Roche’s net sales of Erivedge®.
Profitability: Curis reported a net loss of $14.1 million, or $0.10 per share, on both a basic and diluted basis for the second quarter of 2017, as compared to a net loss of $11.3 million, or $0.09 per share, on both a basic and diluted basis for the same period in 2016. Curis reported a net loss of $29.8 million, or $0.21 per share, on both a basic and diluted basis for the six months ended June 30, 2017, as compared to a net loss of $20.7 million, or $0.16 per share on both a basic and diluted basis for the same period in 2016.
Liquidity and financial flexibility: As of June 30, 2017, Curis’s cash, cash equivalents, marketable securities, and investments totalled $51.0 million, and there were approximately 143.9 million shares of common stock outstanding. On a fully-diluted basis, which includes 18.6 million options, there were 162.5 million shares outstanding.
Key risk factors and potential stock drivers:
Biotech space in itself is a high-risk sector due to uncertainties associated with the novel drug development.
Therefore, the outcome of upcoming catalyst (as mentioned above) and continued improvement in its proprietary programs are expected to provide a boost to the stock to retain its momentum. Any adversities related with the same could upset the stock performance significantly.
The company’s near-term stock movement is also dependent on its upcoming quarterly result, any major adversities/lower than expected guidance could adversely affect the investor sentiments.
CRIS presently has net level losses. Also, the burn rate is expected to remain high. R&D in drug development entails huge capital outlay. Therefore, crunch in its liquidity and financial flexibility will further impact its business & financial profile.
Also, incremental capital raise exposes the company to the risk related with dilution. In fact, the company stock took the significant hit right after it announced public offering in September 2017.
Stock Chart:
On Friday, November 3rd, 2017, CRIS is trading at $1.55 (+2.67%) on an average volume of 885,363.00
Shares exchanging hands. Market capitalization is $254.01 million. The current RSI is 43.77
In the past 52 weeks, shares of CRIS have traded as low as $1.45 and as high as 3.72
At $1.54, shares of CRIS are trading below its 50-day moving average (MA) at $1.71 and below its 200-day MA at $2.11
The present support and resistance levels for the stock are at $1.45 & $1.60 respectively.
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