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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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DELAWARE
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04-3505116
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(State or other jurisdiction of
incorporation or organization)
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(I.R.S. Employer
Identification No.)
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Title of Each Class
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Name of Each Exchange on Which Registered
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Common Stock, $0.01 par value per share
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NASDAQ Global Market
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Large accelerated filer
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Accelerated filer
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Non-accelerated filer
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Smaller reporting company
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(Do not check if a smaller reporting company)
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Emerging growth company
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PART I
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ITEM 1.
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ITEM 1A.
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ITEM 1B.
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ITEM 2.
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ITEM 3.
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ITEM 4.
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PART II
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ITEM 5.
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ITEM 6.
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ITEM 7.
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ITEM 7A.
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ITEM 8.
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ITEM 9.
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ITEM 9A.
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ITEM 9B.
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PART III
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ITEM 10.
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ITEM 11.
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ITEM 12.
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ITEM 13.
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ITEM 14.
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PART IV
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ITEM 15.
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ITEM 16.
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ITEM 1.
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BUSINESS
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1.
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IRAK4 Program - a precision oncology program of small molecule inhibitors of IRAK4. The development candidate is CA-4948, an orally available small molecule inhibitor of IRAK4.
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2.
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PD1/VISTA Program - an immuno-oncology program of small molecule antagonists of PD1 and VISTA immune checkpoint pathways. The development candidate is CA-170, an orally available small molecule antagonist of PDL1 and VISTA.
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PD1/TIM3 Program - an immuno-oncology program of small molecule antagonists of PD1 and TIM3 immune checkpoint pathways. The development candidate is CA-327, an orally available small molecule antagonist of PDL1 and TIM3.
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with respect to amounts that we and our affiliates receive from sublicensees under a licensed program in the U.S. or the European Union, a declining percentage of non-royalty sublicense revenues that is dependent on the stage of the most advanced product for such licensed program at the time the sublicense is granted, including, for example 25% of such amounts following our initiation of a Phase 2 clinical study and 15% of such amounts after initiation of the first pivotal study. This sharing will also extend to royalties that we receive from sublicensees, subject to minimum royalty percentage rates that we are obligated to pay to Aurigene, which generally range from mid-to-high single-digit royalty percentage rates up to 10%;
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with respect to sublicensing revenues we and our affiliates receive from sublicensees under a licensed program in Asia, 50% of such sublicensing revenues, including both non-royalty sublicensee revenues and royalties that we receive from sublicensees; and
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with respect to non-royalty sublicensing revenues we and our affiliates receive from sublicensees under a licensed program outside of the U.S., the European Union and Asia, a percentage of such non-royalty sublicense revenues ranging from 30% to 50%. We are also obligated to share 50% of royalties that we receive from sublicensees that we receive in these territories.
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our license with respect to any licensed program that is not a terminated program (defined below), either in our entire territory or in countries within our territory outside of the terminated region (defined below), as applicable, shall continue in full force and effect, subject to all terms and conditions of the collaboration agreement, including our payment obligations;
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our license with respect to any terminated program, either in our entire territory or in the terminated region, as applicable, shall terminate and revert to Aurigene;
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we will grant Aurigene a perpetual, royalty-free (except for pass-through royalties and milestone payments payable by us under licenses to third party patent rights with respect to products developed or commercialized by or on behalf
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we will grant to Aurigene a right of first negotiation, exercisable within 90 days after termination, to obtain an exclusive, royalty-bearing license, with the right to sublicense, under our relevant patent rights solely to develop, manufacture and commercialize compounds and products for any terminated program, either in our entire territory or in the terminated region, as applicable, upon commercially reasonable terms and conditions to be negotiated in good faith by the parties;
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we will perform other specified activities and actions reasonably necessary for Aurigene to develop, manufacture and commercialize compounds and products for any terminated program, either in our entire territory or in the terminated region, as applicable; and
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the applicable license to Aurigene will survive termination.
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completion of preclinical laboratory tests, animal studies and formulation studies in compliance with the FDA’s good laboratory practice, or GLP, regulations;
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submission to the FDA of an IND, which must take effect before human clinical trials may begin;
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approval by an independent institutional review board, or IRB, representing each clinical site before each clinical trial may be initiated;
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performance of adequate and well-controlled human clinical trials in accordance with good clinical practices, or GCP, to establish the safety and efficacy of the proposed drug product for each indication;
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preparation and submission to the FDA of a new drug application, or NDA, requesting marketing for one or more proposed indications;
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review of the candidate product by an FDA advisory committee, where appropriate or if applicable;
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satisfactory completion of one or more FDA inspections of the manufacturing facility or facilities at which the product, or components thereof, are produced to assess compliance with current good manufacturing practices, or cGMP, requirements and to assure that the facilities, methods and controls are adequate to preserve the product’s identity, strength, quality and purity;
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satisfactory completion of FDA audits of clinical trial sites to assure compliance with GCPs and the integrity of the clinical data;
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payment of user fees and securing FDA approval of the NDA; and
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compliance with any post-approval requirements, including the potential requirement to implement a Risk Evaluation and Mitigation Strategy, or REMS, and the potential requirement to conduct post-approval studies required by FDA.
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Phase 1.
The drug is initially introduced into a small number of healthy human subjects or, in certain indications such as cancer, patients with the target disease or condition (e.g., cancer) and tested for safety, dosage tolerance, absorption, distribution, metabolism, excretion and, if possible, to gain an early indication of its effectiveness and to determine optimal dosage.
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Phase 2.
The drug is administered to a limited patient population to identify possible adverse effects and safety risks, to preliminarily evaluate the efficacy of the product for specific targeted diseases and to determine dosage tolerance and optimal dosage, and regimen.
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Phase 3.
These clinical trials are commonly referred to as “pivotal” studies, which denotes a study which presents the data that the FDA or other relevant regulatory agency will use to determine whether or not to approve a drug. The drug is administered to an expanded patient population, generally at geographically dispersed clinical trial sites, in well-controlled clinical trials to generate enough data to statistically evaluate the efficacy and safety of the product for approval, to establish the overall risk-benefit profile of the product and to provide adequate information for the labeling of the product.
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Phase 4.
Post-approval studies may be conducted after initial marketing approval. These studies are used to gain additional experience from the treatment of patients in the intended therapeutic indication.
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restrictions on the marketing or manufacturing of the product, suspension of the approval, or complete withdrawal of the product from the market or product recalls;
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fines, warning letters or holds on post-approval clinical trials;
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refusal of the FDA to approve pending NDAs or supplements to approved NDAs, or suspension or revocation of product license approvals;
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product seizure or detention, or refusal to permit the import or export of products; or
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injunctions or the imposition of civil or criminal penalties.
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the required patent information has not been filed;
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the listed patent has expired;
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the listed patent has not expired, but will expire on a particular date and approval is sought after patent expiration; or
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the listed patent is invalid, unenforceable or will not be infringed by the new product.
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the federal Anti-Kickback Statute, which prohibits, among other things, persons and entities from knowingly and willfully soliciting, offering, paying, receiving or providing remuneration, directly or indirectly, in cash or in kind, to induce or reward either the referral of an individual for, or the purchase, order or recommendation of, any good or service, for which payment may be made, in whole or in part, under a federal healthcare program such as Medicare and Medicaid;
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the federal civil and criminal false claims laws, including the civil False Claims Act, and civil monetary penalties laws, which prohibit individuals or entities from, among other things, knowingly presenting, or causing to be presented, to the federal government, claims for payment that are false, fictitious or fraudulent or knowingly making, using or causing to made or used a false record or statement to avoid, decrease or conceal an obligation to pay money to the federal government;
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the federal Health Insurance Portability and Accountability Act of 1996, or HIPAA, which created additional federal criminal laws that prohibit, among other things, knowingly and willfully executing, or attempting to execute, a scheme to defraud any healthcare benefit program or making false statements relating to healthcare matters;
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HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act, and their respective implementing regulations, including the Final Omnibus Rule published in January 2013, which impose obligations, including mandatory contractual terms, with respect to safeguarding the privacy, security and transmission of individually identifiable health information;
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the federal false statements statute prohibits knowingly and willfully falsifying, concealing ·or covering up a material fact or making any materially false statement in connection with the delivery of or payment for healthcare benefits, items or services; and
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the federal transparency requirements known as the federal Physician Payments Sunshine Act, under the Patient Protection and Affordable Care Act, as amended by the Health Care Education Reconciliation Act, or the Affordable Care Act, which requires certain manufacturers of drugs, devices, biologics and medical supplies to report annually to the Centers for Medicare & Medicaid Services, or CMS, within the United States Department of Health and Human Services, information related to payments and other transfers of value made by that entity to physicians and teaching hospitals, as well as ownership and investment interests held by physicians and their immediate family members; and analogous state and foreign laws and regulations, such as state anti-kickback and false claims laws, which may apply to healthcare items or services that are reimbursed by non-governmental third-party payors, including private insurers.
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an annual, nondeductible fee on any entity that manufactures or imports specified branded prescription drugs and biologic agents, apportioned among these entities according to their market share in certain government healthcare programs, although this fee would not apply to sales of certain products approved exclusively for orphan indications;
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expansion of eligibility criteria for Medicaid programs by, among other things, allowing states to offer Medicaid coverage to certain individuals with income at or below 133% of the federal poverty level, thereby potentially increasing a manufacturer’s Medicaid rebate liability;
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expanded manufacturers’ rebate liability under the Medicaid Drug Rebate Program by increasing the minimum rebate for both branded and generic drugs and revising the definition of “average manufacturer price,” or AMP, for calculating and reporting Medicaid drug rebates on outpatient prescription drug prices and extending rebate liability to prescriptions for individuals enrolled in Medicare Advantage plans;
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addressed a new methodology by which rebates owed by manufacturers under the Medicaid Drug Rebate Program are calculated for drugs that are inhaled, infused, instilled, implanted or injected;
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expanded the types of entities eligible for the 340B drug discount program;
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established the Medicare Part D coverage gap discount program by requiring manufacturers to provide a 50% point-of-sale-discount off the negotiated price of applicable brand drugs to eligible beneficiaries during their coverage gap period as a condition for the manufacturers’ outpatient drugs to be covered under Medicare Part D;
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a new Patient-Centered Outcomes Research Institute to oversee, identify priorities in, and conduct comparative clinical effectiveness research, along with funding for such research;
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the Independent Payment Advisory Board, or IPAB, which has authority to recommend certain changes to the Medicare program to reduce expenditures by the program that could result in reduced payments for prescription drugs. However, the IPAB implementation has been not been clearly defined. PPACA provided that under certain circumstances, IPAB recommendations will become law unless Congress enacts legislation that will achieve the same or greater Medicare cost savings; and
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established the Center for Medicare and Medicaid Innovation within CMS to test innovative payment and service delivery models to lower Medicare and Medicaid spending, potentially including prescription drug spending. Funding has been allocated to support the mission of the Center for Medicare and Medicaid Innovation from 2011 to 2019.
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Name
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Age
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Position
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Ali Fattaey, Ph.D.
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52
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President and Chief Executive Officer
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James Dentzer
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51
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Chief Financial Officer and Chief Administrative Officer
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David Tuck, M.D.
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66
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Chief Medical Officer
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Ali Fattaey, Ph.D.
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Dr. Fattaey has served as our President and Chief Executive Officer and as a director since June 2014. From February 2013 to June 2014, Dr. Fattaey served as our President and Chief Operating Officer. From 2011 until February 2013, Dr. Fattaey served as the President and Chief Executive Officer and Director of ACT Biotech, Inc., a biotechnology company. Dr. Fattaey served as ACT Biotech’s Chief Operating and Scientific Officer from 2008 until 2010. From June 2006 until January 2008, Dr. Fattaey served the Director of Science and Technology at the Melanoma Therapeutics Foundation, a non-profit organization. From January 2005 until June 2006, Dr. Fattaey was a strategic consultant for pharmaceutical and biotechnology companies. Dr. Fattaey was previously employed at Sagres Discovery, Inc., a biotechnology company, as its Chief Scientific Officer from November 2001 until April 2004 and subsequently as the Senior Vice President of Discovery Research at Chiron Corporation, a biopharmaceutical company, following Chiron’s acquisition of Sagres Discovery. Dr. Fattaey was employed by Onyx Pharmaceuticals, a biopharmaceutical company, from January 1994 until June 2001, most recently as its Vice President of Discovery Research. Dr. Fattaey received his Ph.D. in microbiology from Kansas State University in 1989 and was a Research Fellow in Medicine at Harvard Medical School, Massachusetts General Hospital Cancer Center.
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James Dentzer
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Mr. Dentzer has served as our Chief Financial Officer and Administration Officer since March 2016. From December 2013 to December 2015, Mr. Dentzer served as Chief Financial Officer of Dicerna Pharmaceuticals, Inc., an RNA interference-based biopharmaceutical company. From March 2010 to December 2013, Mr. Dentzer was the Chief Financial Officer of Valeritas, Inc., a commercial-stage medical technology company. From October 2006 to October 2009, Mr. Dentzer was the Chief Financial Officer of Amicus Therapeutics, Inc., a biotechnology company. In prior positions, Mr. Dentzer spent six years as corporate controller of Biogen and six years in various senior financial roles at E.I. du Pont de Nemours and Company in the U.S. and Asia. Mr. Dentzer holds a B.A. in philosophy from Boston College and an M.B.A. from the University of Chicago.
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David Tuck, M.D.
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Dr. Tuck has served as our Chief Medical Officer since March 2016. From January 2016 to March 2016, Dr. Tuck served as our Senior Vice President, Clinical and Translational Sciences. Dr. Tuck previously served as our Vice President of Clinical and Translational Sciences from May 2015 through January 2016. He joined us from EMD Serono, the biopharmaceutical division of Merck KGaA, where he was Senior Medical Director in the Oncology Translational Innovation Program from 2013 until May 2015, overseeing activities ranging from early clinical development of small molecule and biologic targeted therapeutics, to novel target and biomarker identification focused on bioinformatics and genomics analysis. Prior to that, Dr. Tuck was employed by Bristol-Myers Squibb Oncology Research, a cancer research company, from December 2010 until May 2013, where he served in the roles of Translational Physician for ipilimumab, and external development leader in solid tumors and hematological malignancies for immune checkpoint inhibitors. Between 2000 and 2010, Dr. Tuck was an Associate Professor at Yale University. While at Yale, he led a research lab in genomics and bioinformatics of cancer, stem cells and molecular hematology. He also served as Associate Director of the Yale Comprehensive Cancer Center from 2000 to 2006. Dr. Tuck earned his B.A. at Harvard University and medical degree at the University of Vermont School of Medicine, and received board certification in internal medicine, medical oncology and hematology.
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ITEM 1A.
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RISK FACTORS
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continue to develop and conduct clinical trials with respect to drug candidates;
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seek to identify and develop additional drug candidates;
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acquire or in-license other drug candidates or technologies;
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seek regulatory and marketing approvals for our drug candidates that successfully complete clinical trials, if any;
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establish sales, marketing, distribution and other commercial infrastructure in the future to commercialize various drugs for which we may obtain marketing approval, if any;
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require the manufacture of larger quantities of drug candidates for clinical development and, potentially, commercialization;
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maintain, expand, and protect our intellectual property portfolio;
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hire and retain additional personnel, such as clinical, quality control and scientific personnel; and
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add equipment and physical infrastructure as may be required to support our research and development programs.
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unanticipated costs in our research and development programs;
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the timing and cost of obtaining regulatory approvals for our drug candidates and maintaining compliance with regulatory requirements;
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the timing and amount of option exercise fees, milestone payments, royalties and other payments due to licensors, including Aurigene, for patent rights and technology used in our drug development programs;
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the costs of commercialization activities for any of our drug candidates that receive marketing approval, to the extent such costs are our responsibility, including the costs and timing of establishing drug sales, marketing, distribution and manufacturing capabilities;
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unplanned costs to prepare, file, prosecute, defend and enforce patent claims and other patent-related costs, including litigation costs and technology license fees; and
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unexpected losses in our cash investments or an inability to otherwise liquidate our cash investments due to unfavorable conditions in the capital markets.
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if any payment of principal is not made within three days of when such payment is due and payable or otherwise made in accordance with the terms of the credit agreement;
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if any representations or warranties made in the credit agreement or any other related transaction document prove to be incorrect or misleading in any material respect when made;
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if there occurs a default in the performance of affirmative and negative covenants set forth in the credit agreement or under certain ancillary transaction documents;
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the failure by Genentech to pay material amounts owed under the collaboration agreement with Genentech because of an actual breach or default by Curis under the collaboration agreement;
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a material breach or default by Curis Royalty under certain ancillary transaction documents, in each case, which such breach or default is not cured within 30 days after written demand thereof by HealthCare Royalty;
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the voluntary or involuntary commencement of bankruptcy proceedings by either Curis or Curis Royalty and other insolvency-related defaults;
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any materially adverse effect on the binding nature of any of the transaction documents or the Genentech collaboration agreement;
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if any person shall be designated an independent director of Curis Royalty other than in accordance with its limited liability company operating agreement; or
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if Curis shall at any time cease to own, of record and beneficially, 100% of the equity interests in Curis Royalty.
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payments we may be required to make to collaborators such as Aurigene to exercise license rights and satisfy milestones and royalty obligations;
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the status of, and level of expenses incurred in connection with, our programs, including development costs relating to CUDC-907, CA-170 and CA-4948, as well as funding programs that we have licensed or may in the future license and develop under our collaboration with Aurigene;
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fluctuations in sales of Erivedge and related royalty payments, including fluctuations resulting from the sales of competing drug products such as sonidegib, which is approved in the U.S. and Europe for the treatment of locally advanced BCC and is now being marketed and sold by Sun Pharmaceuticals Industries Ltd., or Sun Pharmaceuticals;
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any intellectual property infringement lawsuit or other litigation in which we may become involved;
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the implementation of restructuring and cost-savings strategies;
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the occurrence of an event of default under the credit agreement by and among Curis, Curis Royalty and HealthCare Royalty;
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the implementation or termination of collaboration, licensing, manufacturing or other material agreements with third parties, and non-recurring revenue or expenses under any such agreement; and
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compliance with regulatory requirements.
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successful enrollment in, and completion of, ongoing and future clinical trials of CUDC-907, CA-170, CA-4948 and other compounds that we may develop under our collaboration agreement with Aurigene;
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Aurigene’s ability to successfully discover and preclinically develop other drug candidates under the collaboration agreement;
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a safety, tolerability and efficacy profile that is satisfactory to FDA or any comparable foreign regulatory authority for marketing approval;
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receipt of requisite marketing approvals from applicable regulatory authorities;
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the extent of any required post marketing approval commitments to applicable regulatory authorities;
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establishment of supply arrangements with third party raw materials suppliers and manufacturers;
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establishment of arrangements with third party manufacturers to obtain finished drug products that is appropriately packaged for sale;
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adequate ongoing availability of raw materials and drug products for clinical development and any commercial sales;
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obtaining and maintaining patent, trade secret protection and regulatory exclusivity, both in the United States and internationally;
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protection of the rights in our intellectual property portfolio;
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successful launch of commercial sales following any marketing approval;
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a continued acceptable safety profile following any marketing approval;
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commercial acceptance by patients, the medical community and third-party payors; and
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our ability to compete with other therapies.
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incur additional unplanned costs;
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be delayed in obtaining marketing approval for our drug candidates;
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not obtain marketing approval at all;
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obtain approval for indications or patient populations that are not as broad as intended or desired;
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obtain approval with labeling that includes significant use or distribution restrictions or significant safety warnings, including boxed warnings;
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be subject to additional post-marketing testing or other requirements; or
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be required to remove the drug from the market after obtaining marketing approval.
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regulators or institutional review boards may not authorize us, any collaborators or our or their investigators to commence a clinical trial or conduct a clinical trial at a prospective trial site;
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we, or any collaborators, may have delays in reaching or fail to reach agreement on acceptable clinical trial contracts or clinical trial protocols with prospective trial sites;
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clinical trials of our drug candidates may produce unfavorable or inconclusive results;
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we, or any collaborators, may decide, or regulators may require us or them, to conduct additional clinical trials or abandon drug development programs;
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the number of patients required for clinical trials of our drug candidates may be larger than we, or any collaborators, anticipate, patient enrollment in these clinical trials may be slower than we, or any collaborators, anticipate or participants may drop out of these clinical trials at a higher rate than we, or any collaborators, anticipate;
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our estimates of the patient populations available for study may be higher than actual patient numbers and result in our inability to sufficiently enroll our trials;
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the cost of planned clinical trials of our drug candidates may be greater than we anticipate;
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our third-party contractors or those of any collaborators, including those manufacturing our drug candidates or components or ingredients thereof or conducting clinical trials on our behalf or on behalf of any collaborators, may fail to comply with regulatory requirements or meet their contractual obligations to us or any collaborators in a timely manner or at all;
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patients that enroll in a clinical trial may misrepresent their eligibility to do so or may otherwise not comply with the clinical trial protocol, resulting in the need to drop the patients from the clinical trial, increase the needed enrollment size for the clinical trial or extend the clinical trial’s duration;
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we, or any collaborators, may have to delay, suspend or terminate clinical trials of our drug candidates for various reasons, including a finding that the participants are being exposed to unacceptable health risks, undesirable side effects or other unexpected characteristics of the drug candidate;
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regulators or institutional review boards may require that we, or any collaborators, or our or their investigators suspend or terminate clinical research for various reasons, including noncompliance with regulatory requirements or their standards of conduct, a finding that the participants are being exposed to unacceptable health risks, undesirable side effects or other unexpected characteristics of the drug candidate or findings of undesirable effects caused by a chemically or mechanistically similar drug or drug candidate;
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the FDA or comparable foreign regulatory authorities may disagree with our, or any collaborators’, clinical trial designs or our or their interpretation of data from preclinical studies and clinical trials;
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the FDA or comparable foreign regulatory authorities may fail to approve or subsequently find fault with the manufacturing processes or facilities of third-party manufacturers with which we, or any collaborators, enter into agreements for clinical and commercial supplies;
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the supply or quality of raw materials or manufactured drug candidates or other materials necessary to conduct clinical trials of our drug candidates may be insufficient, inadequate or not available at an acceptable cost, or we may experience interruptions in supply; and
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the approval policies or regulations of the FDA or comparable foreign regulatory authorities may significantly change in a manner rendering our clinical data insufficient to obtain marketing approval.
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the size and nature of the patient population;
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the severity of the disease under investigation;
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the availability of approved therapeutics for the relevant disease;
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the proximity of patients to clinical sites;
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the eligibility criteria and design for the trial;
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efforts to facilitate timely enrollment;
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competing clinical trials; and
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clinicians’ and patients’ perceptions as to the potential advantages and risks of the drug being studied in relation to other available therapies, including any new drugs that may be approved for the indications we are investigating.
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regulatory authorities may withdraw their approval of the drug or seize the drug;
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we, or any future collaborators, may be required to recall the drug, change the way the drug is administered or conduct additional clinical trials;
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additional restrictions may be imposed on the marketing of, or the manufacturing processes for, the particular drug;
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we may be subject to fines, injunctions or the imposition of civil or criminal penalties;
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regulatory authorities may require the addition of labeling statements, such as a “black box” warning or a contraindication;
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we, or any future collaborators, may be required to create a Medication Guide outlining the risks of the previously unidentified side effects for distribution to patients;
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we, or any future collaborators, could be sued and held liable for harm caused to patients;
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the drug may become less competitive; and
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our reputation may suffer.
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the efficacy and safety of the drug;
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the potential advantages of the drug compared to competitive therapies;
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the prevalence and severity of any side effects;
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whether the drug is designated under physician treatment guidelines as a first-, second- or third-line therapy;
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our ability, or the ability of any future collaborators, to offer the drug for sale at competitive prices;
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the drug’s convenience and ease of administration compared to alternative treatments;
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the willingness of the target patient population to try, and of physicians to prescribe, the drug;
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limitations or warnings, including distribution or use restrictions, contained in the drug’s approved labeling;
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the strength of sales, marketing and distribution support;
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changes in the standard of care for the targeted indications for the drug; and
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availability and amount of coverage and reimbursement from government payors, managed care plans and other third-party payors.
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we may not be able to attract and build a significant and skilled marketing staff or sales force;
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the cost of establishing a marketing staff or sales force may not be justifiable in light of the revenues generated by any particular drug; and
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our direct sales and marketing efforts may not be successful.
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decreased demand for our drug candidates or drugs that we may develop;
|
•
|
injury to our reputation and significant negative media attention;
|
•
|
withdrawal of clinical trial participants;
|
•
|
significant costs to defend resulting litigation;
|
•
|
substantial monetary awards to trial participants or patients;
|
•
|
loss of revenue;
|
•
|
reduced resources of our management to pursue our business strategy; and
|
•
|
the reduced ability or inability to commercialize any drugs that we may develop.
|
•
|
Erivedge becomes no longer accepted as safe, efficacious, cost-effective and preferable for the treatment of advanced BCC to current therapies in the medical community and by third-party payors;
|
•
|
Genentech and/or Roche fail to continue to apply the necessary financial resources and expertise to manufacturing, marketing and selling Erivedge for advanced BCC, and to regulatory approvals for this indication outside of the U.S.;
|
•
|
Genentech and/or Roche do not continue to develop and implement effective marketing, sales and distribution strategies and operations for development and commercialization of Erivedge for advanced BCC;
|
•
|
Genentech and/or Roche do not continue to develop, validate and maintain a commercially viable manufacturing process for Erivedge that is compliant with current good manufacturing practices;
|
•
|
Genentech and/or Roche do not successfully obtain third party reimbursement and generate commercial demand that results in sales of Erivedge for advanced BCC in any geographic areas where requisite approvals have been, or may be, obtained;
|
•
|
we, Genentech, or Roche encounter third-party patent interference, derivation, inter partes review, post-grant review, reexamination or patent infringement claims with respect to Erivedge;
|
•
|
Genentech and/or Roche do not comply with regulatory and legal requirements applicable to the sale of Erivedge for advanced BCC;
|
•
|
competing drug products are approved for the same indications as Erivedge, such as is the case with sonidegib, which is being marketed and sold by Sun Pharmaceutical, both in the U.S. and abroad for the treatment of adults with locally advanced BCC;
|
•
|
new safety risks are identified;
|
•
|
Erivedge does not demonstrate acceptable safety and efficacy in current or future clinical trials, or otherwise does not meet applicable regulatory standards for approval in indications other than advanced BCC;
|
•
|
Genentech and/or Roche determine to re-prioritize Genentech’s commercial or development programs and reduce or terminate Genentech’s efforts on the development or commercialization of Erivedge; or
|
•
|
Genentech does not exercise its first right to maintain or defend intellectual property rights associated with Erivedge.
|
•
|
Our collaborators each have significant discretion in determining the efforts and resources that they will apply to their respective collaboration with us. If a collaborator fails to allocate sufficient time, attention and resources to our collaboration, the successful development and commercialization of drug candidates under such collaboration is likely to be adversely affected. For example, we are dependent on Aurigene to successfully discover and advance preclinical programs from which we may exercise our option to license drug candidates for future development.
|
•
|
Our collaborators may develop and commercialize, either alone or with others, drugs that are similar to or competitive with the drug candidates that are the subject of our respective collaborations. For example, Genentech and Roche are involved in the commercialization of many cancer medicines and are seeking to develop several other cancer drug therapies, and Aurigene has other active cancer-focused discovery programs and has also entered into license agreements with other companies that focus on cancer therapies.
|
•
|
Our collaborators may change the focus of their development and commercialization efforts or pursue higher-priority programs.
|
•
|
Our collaborators may enter into one or more transactions with third parties, including a merger, consolidation, reorganization, sale of substantial assets, sale of substantial stock or change of control. Any such transaction could divert the attention of our collaborative partner’s management and adversely affect its ability to retain and motivate key personnel who are important to the continued development of the programs under such collaboration. In addition, an acquirer could determine to reprioritize our collaborator’s development programs such that our collaborator ceases to diligently pursue the development of our programs, and/or terminates our collaboration.
|
•
|
Our collaborators may, under specified circumstances, terminate their collaborations with us on short notice and for circumstances outside of our control, which could make it difficult for us to attract new collaborators or adversely affect how we are perceived in the scientific, biotech, pharma and financial communities.
|
•
|
Our collaborators may utilize our intellectual property rights in such a way as to invite litigation that could jeopardize or invalidate our intellectual property rights, or expose us to potential liability.
|
•
|
Disputes may arise between collaborators and us regarding ownership of or other rights in the intellectual property generated in the course of the collaborations.
|
•
|
If any of our collaborators were to breach or terminate its arrangement with us, the development and commercialization of the affected drug candidate or program could be delayed, curtailed or terminated.
|
•
|
the development of certain of our current or future drug candidates may be terminated or delayed;
|
•
|
our cash expenditures related to development of certain of our current or future drug candidates would increase significantly and we may need to seek additional financing;
|
•
|
we may be required to hire additional employees or otherwise develop additional expertise, such as clinical, regulatory, sales and marketing expertise, for which we have not budgeted;
|
•
|
we will have to bear all of the risk related to the development of any such drug candidates; and
|
•
|
our future prospects may be adversely affected and our stock price could decline.
|
•
|
manufacturing delays if our third-party contractors give greater priority to the supply of other products over our product candidates or otherwise do not satisfactorily perform according to the terms of the agreements between us and them, or if unforeseen events in the manufacturing process arise;
|
•
|
the failure of third-party contractors to comply with applicable regulatory requirements;
|
•
|
the possible mislabeling of clinical supplies, potentially resulting in the wrong dose amounts being supplied or active drug or placebo not being properly identified;
|
•
|
the possibility of clinical supplies not being delivered to clinical sites on time, leading to clinical trial interruptions, or of drug supplies not being distributed to commercial vendors in a timely manner, resulting in lost sales; and
|
•
|
the possible misappropriation of our proprietary information, including our trade secrets and know-how.
|
•
|
we, and any collaborators, may not be able to initiate or continue certain preclinical and/or clinical trials of our drug candidates under development;
|
•
|
we, and any collaborators, may be delayed in submitting applications for regulatory approvals for our drug candidates; and
|
•
|
we, and any collaborators, may not be able to meet commercial demand for any approved drug products.
|
•
|
a diversion of management attention from our existing operations;
|
•
|
increased operating complexity of our business, requiring greater personnel and resources;
|
•
|
significant additional cash expenditures to expand our operations and acquire and integrate new businesses and technologies;
|
•
|
unanticipated expenses and potential delays related to integration of the operations, technology and other resources of any acquired companies;
|
•
|
uncertainty related to the value, benefits or legitimacy of intellectual property or technologies acquired;
|
•
|
retaining and assimilating key personnel and the potential impairment of relationships with our employees;
|
•
|
incurrence of debt, other liabilities and contingent liabilities, including potentially unknown contingent liabilities; and
|
•
|
dilutive stock issuances.
|
•
|
obtain patents to protect our technologies and discoveries;
|
•
|
protect trade secrets from disclosure to competitors;
|
•
|
operate without infringing upon the proprietary rights of others; and
|
•
|
prevent others from infringing on our proprietary rights.
|
•
|
initiation of litigation or other proceedings against third parties to enforce our patent rights, to seek to invalidate the patents held by third parties or to obtain a judgment that our drug candidates do not infringe such third parties’ patents;
|
•
|
participation in interference and/or derivation proceedings to determine the priority of invention if our competitors file U.S. patent applications that claim technology also claimed by us;
|
•
|
initiation of opposition, reexamination, post grant review or inter partes review proceedings by third parties that seek to limit or eliminate the scope of our patent protection;
|
•
|
initiation of litigation by third parties claiming that our processes or drug candidates or the intended use of our drug candidates infringes their patent or other intellectual property rights; and
|
•
|
initiation of litigation by us or third parties seeking to enforce contract rights relating to intellectual property that may be important to our business.
|
•
|
restrictions on such drugs, manufacturers or manufacturing processes;
|
•
|
restrictions on the labeling or marketing of a drug;
|
•
|
restrictions on drug distribution or use;
|
•
|
requirements to conduct post-marketing studies or clinical trials;
|
•
|
warning letters or untitled letters;
|
•
|
withdrawal of the drugs from the market;
|
•
|
refusal to approve pending applications or supplements to approved applications that we submit;
|
•
|
recall of drugs;
|
•
|
restrictions on coverage by third-party payors;
|
•
|
fines, restitution or disgorgement of profits or revenues;
|
•
|
suspension or withdrawal of marketing approvals;
|
•
|
refusal to permit the import or export of drugs;
|
•
|
drug seizure; or
|
•
|
injunctions or the imposition of civil or criminal penalties.
|
•
|
an annual, non-deductible fee on any entity that manufactures or imports specified branded prescription drugs and biologic agents;
|
•
|
an increase in the statutory minimum rebates a manufacturer must pay under the Medicaid Drug Rebate Program;
|
•
|
expansion of healthcare fraud and abuse laws, including the civil False Claims Act and the federal Anti-Kickback Statute, new government investigative powers and enhanced penalties for noncompliance;
|
•
|
a new Medicare Part D coverage gap discount program, in which manufacturers must agree to offer 50% point-of-sale discounts off negotiated prices to eligible beneficiaries during their coverage gap period, as a condition for a manufacturer’s outpatient drugs to be covered under Medicare Part D;
|
•
|
extension of manufacturers’ Medicaid rebate liability;
|
•
|
expansion of eligibility criteria for Medicaid programs;
|
•
|
expansion of the entities eligible for discounts under the Public Health Service pharmaceutical pricing program;
|
•
|
new requirements to report certain financial arrangements with physicians and teaching hospitals;
|
•
|
a new requirement to annually report drug samples that manufacturers and distributors provide to physicians; and
|
•
|
a new Patient-Centered Outcomes Research Institute to oversee, identify priorities in, and conduct comparative clinical effectiveness research, along with funding for such research.
|
•
|
the timing and result of clinical trials of our drug candidates;
|
•
|
the success of, and announcements regarding, existing and new technologies and/or drug candidates by us or our competitors;
|
•
|
regulatory actions with respect to our product candidates or our competitors’ products and product candidates;
|
•
|
market conditions in the biotechnology and pharmaceutical sectors;
|
•
|
rumors relating to us or our collaborators or competitors;
|
•
|
commencement or termination of collaborations for our development programs;
|
•
|
litigation or public concern about the safety of our drug candidates;
|
•
|
actual or anticipated variations in our quarterly operating results and any subsequent restatement of such results;
|
•
|
the amount and timing of any royalty revenue we receive from Genentech related to Erivedge;
|
•
|
actual or anticipated changes to our research and development plans;
|
•
|
deviations in our operating results from the estimates of securities analysts;
|
•
|
entering into new collaboration agreements or termination of existing collaboration agreements;
|
•
|
adverse results or delays in clinical trials being conducted by us or any collaborators;
|
•
|
any intellectual property disputes or other lawsuits involving us;
|
•
|
third-party sales of large blocks of our common stock;
|
•
|
sales of our common stock by our executive officers, directors or significant stockholders;
|
•
|
equity sales by us of our common stock to fund our operations;
|
•
|
the loss of any of our key scientific or management personnel;
|
•
|
FDA or international regulatory actions;
|
•
|
limited trading volume in our common stock;
|
•
|
general economic and market conditions, including recent adverse changes in the domestic and international financial markets; and
|
•
|
the other factors described in this “Risk Factors” section.
|
•
|
our or our collaborators’ preclinical studies and clinical trials may not advance or be completed in the time frames we or they announce or expect;
|
•
|
we or our collaborators may not make regulatory submissions, receive regulatory approvals or commercialize approved drugs as predicted; and
|
•
|
we or our collaborators may not be able to adhere to our or their current schedule for the achievement of key milestones under any programs.
|
•
|
delaying, deferring or preventing a change in control of our company;
|
•
|
impeding a merger, consolidation, takeover or other business combination involving our company; or
|
•
|
entrenching our management or the board of directors.
|
ITEM 1B.
|
UNRESOLVED STAFF COMMENTS
|
ITEM 2.
|
PROPERTIES
|
ITEM 3.
|
LEGAL PROCEEDINGS
|
ITEM 4.
|
MINE SAFETY DISCLOSURES
|
ITEM 5.
|
MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDERS MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
|
|
|
Curis
Common Stock
|
||||||
Year ended December 31, 2016
|
|
High
|
|
Low
|
||||
First Quarter
|
|
$
|
2.89
|
|
|
$
|
1.25
|
|
Second Quarter
|
|
$
|
2.23
|
|
|
$
|
1.47
|
|
Third Quarter
|
|
$
|
2.64
|
|
|
$
|
1.51
|
|
Fourth Quarter
|
|
$
|
3.72
|
|
|
$
|
2.28
|
|
Year ended December 31, 2017
|
|
|
|
|
||||
First Quarter
|
|
$
|
3.38
|
|
|
$
|
2.24
|
|
Second Quarter
|
|
$
|
2.87
|
|
|
$
|
1.60
|
|
Third Quarter
|
|
$
|
2.27
|
|
|
$
|
1.47
|
|
Fourth Quarter
|
|
$
|
1.74
|
|
|
$
|
0.69
|
|
|
Fiscal year ending December 31,
|
||||||||||||||||
|
2012
|
|
2013
|
|
2014
|
|
2015
|
|
2016
|
|
2017
|
||||||
CURIS INC.
|
100.00
|
|
|
82.22
|
|
|
43.73
|
|
|
84.84
|
|
|
89.80
|
|
|
20.41
|
|
NASDAQ COMPOSITE INDEX
|
100.00
|
|
|
139.89
|
|
|
160.47
|
|
|
171.83
|
|
|
187.03
|
|
|
242.34
|
|
NASDAQ BIOTECHNOLOGY INDEX
|
100.00
|
|
|
165.93
|
|
|
222.94
|
|
|
249.18
|
|
|
196.00
|
|
|
238.39
|
|
ITEM 6.
|
SELECTED FINANCIAL DATA
|
|
Year Ended December 31,
|
||||||||||||||||||
|
2017
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
||||||||||
|
(in thousands, except per share data)
|
||||||||||||||||||
Consolidated Statement of Operations Data:
|
|
|
|
|
|
|
|
|
|
||||||||||
Revenues:
|
|
|
|
|
|
|
|
|
|
||||||||||
License fees (1)
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
3,000
|
|
|
$
|
10,000
|
|
Royalties
|
9,849
|
|
|
7,810
|
|
|
8,031
|
|
|
6,757
|
|
|
3,942
|
|
|||||
Research and development, net (2)
|
49
|
|
|
(283
|
)
|
|
(153
|
)
|
|
86
|
|
|
1,060
|
|
|||||
Total revenues
|
9,898
|
|
|
7,527
|
|
|
7,878
|
|
|
9,843
|
|
|
15,002
|
|
|||||
Costs and expenses:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cost of royalty revenues
|
496
|
|
|
399
|
|
|
406
|
|
|
339
|
|
|
198
|
|
|||||
Research and development
|
45,096
|
|
|
31,590
|
|
|
26,699
|
|
|
13,659
|
|
|
12,927
|
|
|||||
In-process research and development (3)
|
—
|
|
|
17,989
|
|
|
24,348
|
|
|
—
|
|
|
—
|
|
|||||
General and administrative
|
14,066
|
|
|
15,588
|
|
|
12,906
|
|
|
11,707
|
|
|
11,293
|
|
|||||
Total costs and expenses
|
59,658
|
|
|
65,566
|
|
|
64,359
|
|
|
25,705
|
|
|
24,418
|
|
|||||
Loss from operations
|
(49,760
|
)
|
|
(58,039
|
)
|
|
(56,481
|
)
|
|
(15,862
|
)
|
|
(9,416
|
)
|
|||||
Other (expense) income:
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest income
|
513
|
|
|
406
|
|
|
277
|
|
|
165
|
|
|
165
|
|
|||||
Other (expense) income
|
(104
|
)
|
|
(1
|
)
|
|
548
|
|
|
—
|
|
|
—
|
|
|||||
Interest expense
|
(3,966
|
)
|
|
(2,777
|
)
|
|
(3,325
|
)
|
|
(3,749
|
)
|
|
(3,842
|
)
|
|||||
Change in fair value of warrants (4)
|
—
|
|
|
—
|
|
|
—
|
|
|
717
|
|
|
771
|
|
|||||
Total other (expense) income
|
(3,557
|
)
|
|
(2,372
|
)
|
|
(2,500
|
)
|
|
(2,867
|
)
|
|
(2,906
|
)
|
|||||
Net loss
|
$
|
(53,317
|
)
|
|
$
|
(60,411
|
)
|
|
$
|
(58,981
|
)
|
|
$
|
(18,729
|
)
|
|
$
|
(12,322
|
)
|
Net loss per common share (basic and diluted)
|
$
|
(0.36
|
)
|
|
$
|
(0.45
|
)
|
|
$
|
(0.48
|
)
|
|
$
|
(0.22
|
)
|
|
$
|
(0.15
|
)
|
Weighted average common shares (basic and diluted)
|
149,133
|
|
|
132,786
|
|
|
123,365
|
|
|
85,975
|
|
|
82,339
|
|
|
(in thousands)
As of December 31,
|
||||||||||||||||||
|
2017
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
||||||||||
Consolidated Balance Sheet Data:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash, cash equivalents and investments
|
$
|
60,232
|
|
|
$
|
44,485
|
|
|
$
|
82,191
|
|
|
$
|
50,539
|
|
|
$
|
68,906
|
|
Working capital
|
50,192
|
|
|
34,654
|
|
|
74,743
|
|
|
42,148
|
|
|
53,607
|
|
|||||
Long-term investment—restricted
|
153
|
|
|
153
|
|
|
153
|
|
|
166
|
|
|
180
|
|
|||||
Total assets
|
73,798
|
|
|
57,752
|
|
|
94,965
|
|
|
62,614
|
|
|
80,591
|
|
|||||
Long-term obligations (5)
|
35,703
|
|
|
14,939
|
|
|
19,697
|
|
|
22,763
|
|
|
28,859
|
|
|||||
Accumulated deficit
|
(952,265
|
)
|
|
(898,948
|
)
|
|
(838,537
|
)
|
|
(779,555
|
)
|
|
(760,827
|
)
|
|||||
Total stockholders’ equity
|
23,993
|
|
|
29,266
|
|
|
64,510
|
|
|
29,784
|
|
|
45,174
|
|
(1)
|
During the years ended
December 31, 2014
and
2013
, we recognized $3.0 million and $10.0 million of revenue for cash payments that we earned during each of
2014
and
2013
, respectively, under our June 2003 collaboration agreement with Genentech.
|
(2)
|
During the years ended
December 31, 2017
,
2016
,
2015
and
2014
, Genentech incurred expenses of
$0.2 million
,
$0.5 million
,
$0.4 million
and
$0.2 million
, respectively. Under our June 2003 collaboration agreement with Genentech, we are obligated to reimburse these expenses. We have recorded these amounts as contra-revenues, which have been net against research and development revenues for the respective years. During the year ended 2013, we recognized $0.7 million of research and development revenue for milestone payments that we earned under our November 2011 agreement with LLS.
|
(3)
|
During the years ended
December 31, 2016
and
2015
, we recognized in-process research and development charges of
$18.0 million
and
$24.3 million
, related to the amendment or upfront consideration under our Aurigene and Genentech IAP license agreements, each respectively.
|
(4)
|
During the years ended
December 31, 2014
and
2013
, we recorded non-cash charges related to a change in the fair value of our warrant liability, established in connection with our registered direct offering in January 2010. All of the outstanding warrants at
December 31, 2014
expired, unexercised, on January 27,
2015
in accordance with the warrant terms.
|
(5)
|
Long-term obligations are comprised of the following:
|
|
(in thousands)
As of December 31,
|
||||||||||||||||||
|
2017
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
||||||||||
Long-term debt, net
|
$
|
35,669
|
|
|
$
|
14,921
|
|
|
$
|
19,558
|
|
|
$
|
22,589
|
|
|
$
|
27,945
|
|
Warrants
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
717
|
|
|||||
Deferred rent payments
|
34
|
|
|
18
|
|
|
139
|
|
|
174
|
|
|
197
|
|
|||||
Total long-term obligations
|
$
|
35,703
|
|
|
$
|
14,939
|
|
|
$
|
19,697
|
|
|
$
|
22,763
|
|
|
$
|
28,859
|
|
ITEM 7.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
1.
|
IRAK4 Program - a precision oncology program of small molecule inhibitors of IRAK4. The development candidate is CA-4948, an orally available small molecule inhibitor of IRAK4.
|
2.
|
PD1/VISTA Program - an immuno-oncology program of small molecule antagonists of PD1 and VISTA immune checkpoint pathways. The development candidate is CA-170, an orally available small molecule antagonist of PDL1 and VISTA.
|
3.
|
PD1/TIM3 Program - an immuno-oncology program of small molecule antagonists of PD1 and TIM3 immune checkpoint pathways. The development candidate is CA-327, an orally available small molecule antagonist of PDL1 and TIM3.
|
•
|
with respect to amounts that we and our affiliates receive from sublicensees under a licensed program in the U.S. or the European Union, a declining percentage of non-royalty sublicense revenues that is dependent on the stage of the most advanced product for such licensed program at the time the sublicense is granted, including, for example 25% of such amounts following our initiation of a Phase 2 clinical study and 15% of such amounts after initiation of the first pivotal study. This sharing will also extend to royalties that we receive from sublicensees, subject to minimum royalty percentage rates that we are obligated to pay to Aurigene, which generally range from mid-to-high single-digit royalty percentage rates up to 10%;
|
•
|
with respect to sublicensing revenues we and our affiliates receive from sublicensees under a licensed program in Asia, 50% of such sublicensing revenues, including both non-royalty sublicensee revenues and royalties that we receive from sublicensees; and
|
•
|
with respect to non-royalty sublicensing revenues we and our affiliates receive from sublicensees under a licensed program outside of the U.S., the European Union and Asia, a percentage of such non-royalty sublicense revenues ranging from 30% to 50%. We are also obligated to share 50% of royalties that we receive from sublicensees that we receive in these territories.
|
•
|
our ability to successfully plan, finance and complete current and planned clinical trials for CUDC-907, CA-170 and CA-4948 as well as for such clinical trials to generate favorable data;
|
•
|
our and Aurigene’s ability to complete preclinical development and IND-enabling studies for CA-327, and for us to then finance and complete planned Phase 1 clinical trials for this development candidate;
|
•
|
Aurigene’s ability to advance additional preclinical immuno-oncology, and precision oncology drug candidates, and our ability to license these programs from Aurigene and further progress them clinically; and
|
•
|
Genentech and Roche’s ability to continue to successfully commercialize Erivedge in advanced BCC in the United States and in other global territories.
|
•
|
105%, after the third anniversary of the closing date through and including the fourth anniversary of the closing date;
|
•
|
102.5%, after the fourth anniversary of the closing date through and including the fifth anniversary of the closing date;
|
•
|
101%, after the fifth anniversary of the closing date through and including the sixth anniversary of the closing date; and
|
•
|
100%, after the sixth anniversary of the closing date.
|
•
|
the scope, quality of data, rate of progress and cost of clinical trials and other research and development activities undertaken by us or our collaborators;
|
•
|
the results of future preclinical studies and clinical trials;
|
•
|
the cost and timing of regulatory approvals and maintaining compliance with regulatory requirements;
|
•
|
the cost and timing of establishing sales, marketing and distribution capabilities;
|
•
|
the cost of establishing clinical and commercial supplies of our drug candidates and any products that we may develop;
|
•
|
the effect of competing technological and market developments; and
|
•
|
the cost and effectiveness of filing, prosecuting, defending and enforcing any patent claims and other intellectual property rights.
|
•
|
such milestone is commensurate with either of the following:
|
a)
|
our performance to achieve the milestone (for example, the achievement of the milestone involves a degree of risk and was not reasonably assured at the inception of the arrangement); or
|
b)
|
the enhancement of the value of the deliverable as a result of a specific outcome resulting from our performance to achieve the milestone (or substantive effort on our part is involved in achieving the milestone);
|
•
|
such milestone relates solely to past performance; and
|
•
|
the amount of the milestone payment is reasonable relative to all deliverables and payment terms in the arrangement.
|
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.
|
•
|
105%, after the third anniversary of the closing date through and including the fourth anniversary of the closing date;
|
•
|
102.5%, after the fourth anniversary of the closing date through and including the fifth anniversary of the closing date;
|
•
|
101%, after the fifth anniversary of the closing date through and including the sixth anniversary of the closing date; and
|
•
|
100%, after the sixth anniversary of the closing date.
|
|
For the Year Ended
December 31,
|
|
Percentage Increase/ (Decrease)
|
||||||||||||||
|
2017
|
|
2016
|
|
2015
|
|
2017 v. 2016
|
|
2016 v. 2015
|
||||||||
|
|
|
|
|
|
|
|
|
|
||||||||
Revenues
|
$
|
9,898
|
|
|
$
|
7,527
|
|
|
7,878
|
|
|
31
|
%
|
|
(4
|
)%
|
|
Cost of royalty revenues
|
496
|
|
|
399
|
|
|
406
|
|
|
24
|
%
|
|
(2
|
)%
|
|||
Research and development
|
45,096
|
|
|
31,590
|
|
|
26,699
|
|
|
43
|
%
|
|
18
|
%
|
|||
In-process research and development
|
—
|
|
|
17,989
|
|
|
24,348
|
|
|
(100
|
)%
|
|
(26
|
)%
|
|||
General and administrative
|
14,066
|
|
|
15,588
|
|
|
12,906
|
|
|
(10
|
)%
|
|
21
|
%
|
|||
Total other expense, net
|
3,557
|
|
|
2,372
|
|
|
2,500
|
|
|
50
|
%
|
|
(5
|
)%
|
|||
Net loss
|
$
|
(53,317
|
)
|
|
$
|
(60,411
|
)
|
|
$
|
(58,981
|
)
|
|
(12
|
)%
|
|
2
|
%
|
|
For the Year Ended
December 31,
|
|
Percentage Increase/ (Decrease)
|
||||||||||||||
|
2017
|
|
2016
|
|
2015
|
|
2017 v. 2016
|
|
2016 v. 2015
|
||||||||
REVENUES:
|
|
|
|
|
|
|
|
|
|
||||||||
Royalties
|
9,849
|
|
|
7,810
|
|
|
8,031
|
|
|
26
|
%
|
|
(3
|
)%
|
|||
Research and development, net
|
49
|
|
|
(283
|
)
|
|
(153
|
)
|
|
(117
|
)%
|
|
85
|
%
|
|||
Total revenues
|
$
|
9,898
|
|
|
$
|
7,527
|
|
|
$
|
7,878
|
|
|
31
|
%
|
|
(4
|
)%
|
|
For the Year Ended
December 31,
|
|
Percentage Increase/ (Decrease)
|
||||||||||||||
|
2017
|
|
2016
|
|
2015
|
|
2017 v. 2016
|
|
2016 v. 2015
|
||||||||
Direct research and development expenses
|
$
|
31,468
|
|
|
$
|
20,740
|
|
|
$
|
18,515
|
|
|
52
|
%
|
|
12
|
%
|
Employee-related expenses
|
11,752
|
|
|
9,035
|
|
|
6,437
|
|
|
30
|
%
|
|
40
|
%
|
|||
Facilities, depreciation and other expenses
|
1,876
|
|
|
1,815
|
|
|
1,747
|
|
|
3
|
%
|
|
4
|
%
|
|||
Total research and development expenses
|
$
|
45,096
|
|
|
$
|
31,590
|
|
|
$
|
26,699
|
|
|
43
|
%
|
|
18
|
%
|
|
For the Year Ended
December 31,
|
|
Percentage Increase/ (Decrease)
|
||||||||||||||
|
2017
|
|
2016
|
|
2015
|
|
2017 v. 2016
|
|
2016 v. 2015
|
||||||||
Personnel
|
$
|
4,620
|
|
|
$
|
4,374
|
|
|
3,707
|
|
|
6
|
%
|
|
18
|
%
|
|
Occupancy and depreciation
|
460
|
|
|
432
|
|
|
394
|
|
|
6
|
%
|
|
10
|
%
|
|||
Legal services
|
2,055
|
|
|
2,969
|
|
|
2,196
|
|
|
(31
|
)%
|
|
35
|
%
|
|||
Professional and consulting services
|
1,835
|
|
|
2,859
|
|
|
2,300
|
|
|
(36
|
)%
|
|
24
|
%
|
|||
Insurance costs
|
404
|
|
|
392
|
|
|
366
|
|
|
3
|
%
|
|
7
|
%
|
|||
Other general and administrative expenses
|
819
|
|
|
999
|
|
|
1,091
|
|
|
(18
|
)%
|
|
(8
|
)%
|
|||
Stock-based compensation
|
3,873
|
|
|
3,563
|
|
|
2,852
|
|
|
9
|
%
|
|
25
|
%
|
|||
Total general and administrative expenses
|
$
|
14,066
|
|
|
$
|
15,588
|
|
|
$
|
12,906
|
|
|
(10
|
)%
|
|
21
|
%
|
•
|
unanticipated costs in our research and development programs;
|
•
|
the timing and cost of obtaining regulatory approvals for our drug candidates and maintaining compliance with regulatory requirements;
|
•
|
the timing and amount of option exercise fees, milestone payments, royalties and other payments due to licensors, including Aurigene, for patent rights and technology used in our drug development programs;
|
•
|
the costs of commercialization activities for any of our drug candidates that receive marketing approval, to the extent such costs are our responsibility, including the costs and timing of establishing drug sales, marketing, distribution and manufacturing capabilities;
|
•
|
unplanned costs to prepare, file, prosecute, defend and enforce patent claims and other patent-related costs, including litigation costs and technology license fees; and
|
•
|
unexpected losses in our cash investments or an inability to otherwise liquidate our cash investments due to unfavorable conditions in the capital markets.
|
|
Payment Due By Period (amounts in 000’s)
|
||||||||||||||||||
|
Total
|
|
Less than
One Year
|
|
One to
Three Years
|
|
Three to
Five Years
|
|
More than
Five Years
|
||||||||||
Debt obligations under credit agreement (1)
|
$
|
56,390
|
|
|
$
|
9,671
|
|
|
$
|
20,673
|
|
|
$
|
22,567
|
|
|
$
|
3,479
|
|
Operating lease obligations (2)
|
2,104
|
|
|
935
|
|
|
1,169
|
|
|
—
|
|
|
—
|
|
|||||
Outside service obligations (3)
|
969
|
|
|
636
|
|
|
333
|
|
|
—
|
|
|
—
|
|
|||||
Licensing obligations (4)
|
347
|
|
|
300
|
|
|
47
|
|
|
—
|
|
|
—
|
|
|||||
Total future obligations
|
$
|
59,810
|
|
|
$
|
11,542
|
|
|
$
|
22,222
|
|
|
$
|
22,567
|
|
|
$
|
3,479
|
|
|
(1)
|
As of
December 31, 2017
, the outstanding balance, including interest, on the debt was
$41.9 million
. The above amounts reflect management’s estimates as of
December 31, 2017
of repayments, including accrued interest payments, based on the terms of Curis Royalty’s credit facility with HealthCare Royalty, and assumptions about potential future Erivedge royalties. If future royalties are lower or higher than these assumptions, the repayment period will increase or decrease, respectively, and related debt payments will fluctuate accordingly.
|
(2)
|
We are party to a lease agreement with the Trustees of Lexington Office Realty Trust pursuant to which we lease 24,529 square feet of property for office, research and laboratory space located at 4 Maguire Road in Lexington, Massachusetts. The term of the lease agreement commenced on December 1, 2010, and, pursuant to a second amendment to the lease agreement on November 1, 2017, it will expire on February 29, 2020. The total remaining cash obligation for the base rent over the second amended term of the lease agreement is approximately
$2.1 million
. In addition to the base rent, we are responsible for our share of operating expenses and real estate taxes, in accordance with the terms of the lease agreement. Amounts include contractual rent payments as defined in the agreement.
|
(3)
|
Outside service obligations consist of agreements we have with outside labs, consultants and various other service organizations. Obligations to clinical research organizations, medical centers and hospitals conducting our clinical trials are included in our financial statements for costs incurred as of
December 31, 2017
. Our obligations under these types of arrangements are limited to actual costs incurred for services performed and do not include any contingent or milestone payments.
|
(4)
|
Licensing obligations include only obligations that are known to us as of
December 31, 2017
. In the future, we may owe royalties and other contingent payments to our licensors based on the achievement of developmental milestones, product sales, and other specified objectives. These future obligations, including those related to Aurigene, Genentech, Debiopharm and LLS, are not reflected in the table above as these payments are contingent upon achievement of developmental and commercial milestones, the likelihood and timing of which cannot be reasonably estimated at this time. These contingent obligations are further described under the “Our Collaborations and License Agreements” section.
|
ITEM 7A.
|
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|
ITEM 8.
|
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
|
•
|
pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of our assets;
|
•
|
provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with authorizations of management and our board of directors; and
|
•
|
provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements.
|
/s/ PricewaterhouseCoopers LLP
|
Boston, Massachusetts
|
March 8, 2018
|
|
December 31,
|
||||||
|
2017
|
|
2016
|
||||
ASSETS
|
|
|
|
||||
Current Assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
38,288
|
|
|
$
|
26,038
|
|
Investments
|
21,944
|
|
|
18,447
|
|
||
Accounts receivable
|
3,073
|
|
|
2,459
|
|
||
Prepaid expenses and other current assets
|
989
|
|
|
1,257
|
|
||
Total current assets
|
64,294
|
|
|
48,201
|
|
||
Property and equipment, net
|
366
|
|
|
413
|
|
||
Long-term investment—restricted
|
153
|
|
|
153
|
|
||
Goodwill
|
8,982
|
|
|
8,982
|
|
||
Other assets
|
3
|
|
|
3
|
|
||
Total assets
|
$
|
73,798
|
|
|
$
|
57,752
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
|
|
||||
Current Liabilities:
|
|
|
|
||||
Accounts payable
|
$
|
5,423
|
|
|
$
|
5,883
|
|
Accrued liabilities
|
2,793
|
|
|
2,725
|
|
||
Current portion of long-term debt, net
|
5,886
|
|
|
4,939
|
|
||
Total current liabilities
|
14,102
|
|
|
13,547
|
|
||
Long-term debt, net
|
35,669
|
|
|
14,921
|
|
||
Other long-term liabilities
|
34
|
|
|
18
|
|
||
Total liabilities
|
49,805
|
|
|
28,486
|
|
||
Stockholders’ Equity:
|
|
|
|
||||
Common stock, $0.01 par value—225,000,000 shares authorized at December 31, 2017 and 2016, respectively; 165,379,967 shares issued and 164,157,121 shares outstanding at December 31, 2017, respectively; 142,346,871 shares issued and 141,124,025 shares outstanding at December 31, 2016
|
1,654
|
|
|
1,423
|
|
||
Additional paid-in capital
|
976,130
|
|
|
928,319
|
|
||
Treasury stock (at cost, 1,222,846 shares at December 31, 2017 and 2016, respectively)
|
(1,524
|
)
|
|
(1,524
|
)
|
||
Accumulated deficit
|
(952,265
|
)
|
|
(898,948
|
)
|
||
Accumulated other comprehensive loss
|
(2
|
)
|
|
(4
|
)
|
||
Total stockholders’ equity
|
23,993
|
|
|
29,266
|
|
||
Total liabilities and stockholders’ equity
|
$
|
73,798
|
|
|
$
|
57,752
|
|
|
Years Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Revenues:
|
|
|
|
||||||||
Royalties
|
$
|
9,849
|
|
|
$
|
7,810
|
|
|
$
|
8,031
|
|
Research and development, net
|
49
|
|
|
(283
|
)
|
|
(153
|
)
|
|||
Total revenues
|
9,898
|
|
|
7,527
|
|
|
7,878
|
|
|||
Costs and Expenses:
|
|
|
|
||||||||
Cost of royalties
|
496
|
|
|
399
|
|
|
406
|
|
|||
Research and development
|
45,096
|
|
|
31,590
|
|
|
26,699
|
|
|||
In-process research and development
|
—
|
|
|
17,989
|
|
|
24,348
|
|
|||
General and administrative
|
14,066
|
|
|
15,588
|
|
|
12,906
|
|
|||
Total costs and expenses
|
59,658
|
|
|
65,566
|
|
|
64,359
|
|
|||
Loss from operations
|
(49,760
|
)
|
|
(58,039
|
)
|
|
(56,481
|
)
|
|||
Other (Expense) Income:
|
|
|
|
||||||||
Interest income
|
513
|
|
|
406
|
|
|
277
|
|
|||
Other (expense) income
|
(104
|
)
|
|
(1
|
)
|
|
548
|
|
|||
Interest expense
|
(3,966
|
)
|
|
(2,777
|
)
|
|
(3,325
|
)
|
|||
Total other expense, net
|
(3,557
|
)
|
|
(2,372
|
)
|
|
(2,500
|
)
|
|||
Net loss
|
$
|
(53,317
|
)
|
|
$
|
(60,411
|
)
|
|
$
|
(58,981
|
)
|
Net Loss per Common Share (Basic and Diluted)
|
$
|
(0.36
|
)
|
|
$
|
(0.45
|
)
|
|
$
|
(0.48
|
)
|
Weighted Average Common Shares (Basic and Diluted)
|
149,133,466
|
|
|
132,785,687
|
|
|
123,365,195
|
|
|||
Net Loss
|
$
|
(53,317
|
)
|
|
$
|
(60,411
|
)
|
|
$
|
(58,981
|
)
|
Other comprehensive gain/(loss), net of tax:
|
|
|
|
|
|
||||||
Unrealized gain/(loss) on marketable securities
|
2
|
|
|
(32
|
)
|
|
39
|
|
|||
Comprehensive loss
|
$
|
(53,315
|
)
|
|
$
|
(60,443
|
)
|
|
$
|
(58,942
|
)
|
|
Common Stock
|
|
Additional
Paid-in
Capital
|
|
Treasury
Stock
|
|
Accumulated
Deficit
|
|
Accumulated
Other
Comprehensive
Income/(Loss)
|
|
Total
Stockholders’
Equity
|
|||||||||||||||
|
Shares
|
|
Amount
|
|
||||||||||||||||||||||
Balance, December 31, 2014
|
87,253,657
|
|
|
$
|
873
|
|
|
$
|
810,001
|
|
|
$
|
(1,524
|
)
|
|
$
|
(779,556
|
)
|
|
$
|
(11
|
)
|
|
$
|
29,783
|
|
Issuances of common pursuant to sales of shares in the Company’s public offering (see Note 11(b)), net of $4,381 in issuance costs
|
25,090,908
|
|
|
251
|
|
|
64,369
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
64,620
|
|
||||||
Issuance of common stock in consideration for rights granted under the Aurigene collaboration agreement (see Note 3(b))
|
17,120,131
|
|
|
171
|
|
|
23,797
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
23,968
|
|
||||||
Issuances of common stock upon the exercise of stock options and for purchases under the ESPP
|
748,528
|
|
|
7
|
|
|
1,199
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,206
|
|
||||||
Recognition of employee stock-based compensation
|
—
|
|
|
—
|
|
|
3,582
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,582
|
|
||||||
Non-employee stock-based compensation expense, including mark-to-market
|
—
|
|
|
—
|
|
|
293
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
293
|
|
||||||
Other comprehensive loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
39
|
|
|
39
|
|
||||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(58,981
|
)
|
|
—
|
|
|
(58,981
|
)
|
||||||
December 31, 2015
|
130,213,224
|
|
|
1,302
|
|
|
903,241
|
|
|
(1,524
|
)
|
|
(838,537
|
)
|
|
28
|
|
|
64,510
|
|
||||||
Issuance of common stock in consideration for rights granted under the Aurigene collaboration agreement (see Note 3(b))
|
10,208,333
|
|
|
102
|
|
|
17,865
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
17,967
|
|
||||||
Issuances of common stock upon the exercise of stock options and for purchases under the ESPP
|
1,925,314
|
|
|
19
|
|
|
2,888
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,907
|
|
||||||
Recognition of employee stock-based compensation
|
—
|
|
|
—
|
|
|
4,294
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,294
|
|
||||||
Non-employee stock-based compensation expense, including mark-to-market
|
—
|
|
|
—
|
|
|
31
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
31
|
|
||||||
Other comprehensive loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(32
|
)
|
|
(32
|
)
|
||||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(60,411
|
)
|
|
—
|
|
|
(60,411
|
)
|
||||||
December 31, 2016
|
142,346,871
|
|
|
1,423
|
|
|
928,319
|
|
|
(1,524
|
)
|
|
(898,948
|
)
|
|
(4
|
)
|
|
29,266
|
|
||||||
Issuances of common pursuant to sales of shares in the Company’s public offering, net of $0.3 million of issuance costs
|
20,000,000
|
|
|
200
|
|
|
35,131
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
35,331
|
|
||||||
Issuances of common pursuant to sales of shares from the Company’s ATM, net of $0.2 million of commissions
|
2,103,981
|
|
|
21
|
|
|
6,194
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6,215
|
|
||||||
Issuances of common stock upon the exercise of stock options and for purchases under the ESPP
|
953,501
|
|
|
10
|
|
|
1,169
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,179
|
|
||||||
Exercise of stock options settled in shares
|
(24,386
|
)
|
|
—
|
|
|
(42
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(42
|
)
|
||||||
Recognition of employee stock-based compensation
|
—
|
|
|
—
|
|
|
5,365
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5,365
|
|
||||||
Non-employee stock-based compensation expense, including mark-to-market
|
—
|
|
|
—
|
|
|
(6
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(6
|
)
|
||||||
Other comprehensive gain
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2
|
|
|
2
|
|
||||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(53,317
|
)
|
|
—
|
|
|
(53,317
|
)
|
||||||
Balance, December 31, 2017
|
165,379,967
|
|
|
$
|
1,654
|
|
|
$
|
976,130
|
|
|
$
|
(1,524
|
)
|
|
$
|
(952,265
|
)
|
|
$
|
(2
|
)
|
|
$
|
23,993
|
|
|
Years Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Cash Flows from Operating Activities:
|
|
|
|
|
|
||||||
Net loss
|
$
|
(53,317
|
)
|
|
$
|
(60,411
|
)
|
|
$
|
(58,981
|
)
|
Adjustments to reconcile net loss to net cash used in operating activities:
|
|
|
|
|
|
||||||
Depreciation and amortization
|
235
|
|
|
193
|
|
|
161
|
|
|||
Stock-based compensation expense
|
5,359
|
|
|
4,325
|
|
|
3,875
|
|
|||
Issuance of common stock in consideration for rights granted under the Aurigene collaboration agreement (see Note 3(b))
|
—
|
|
|
17,989
|
|
|
23,968
|
|
|||
Amortization of debt issuance costs
|
144
|
|
|
48
|
|
|
56
|
|
|||
Non-cash interest (income)/expense
|
(53
|
)
|
|
168
|
|
|
149
|
|
|||
Gain on sale of fixed assets
|
—
|
|
|
—
|
|
|
(22
|
)
|
|||
Changes in operating assets and liabilities:
|
|
|
|
|
|
||||||
Accounts receivable
|
(614
|
)
|
|
(353
|
)
|
|
(145
|
)
|
|||
Prepaid expenses and other assets
|
267
|
|
|
(85
|
)
|
|
(726
|
)
|
|||
Accounts payable and accrued and other liabilities
|
(376
|
)
|
|
2,315
|
|
|
1,774
|
|
|||
Total adjustments
|
4,962
|
|
|
24,600
|
|
|
29,090
|
|
|||
Net cash used in operating activities
|
(48,355
|
)
|
|
(35,811
|
)
|
|
(29,891
|
)
|
|||
Cash Flows from Investing Activities:
|
|
|
|
|
|
||||||
Purchases of investments
|
(51,121
|
)
|
|
(57,639
|
)
|
|
(123,240
|
)
|
|||
Sales/maturities of investments
|
47,679
|
|
|
88,092
|
|
|
116,822
|
|
|||
Decrease in restricted cash/investments
|
—
|
|
|
—
|
|
|
14
|
|
|||
Expenditures for property and equipment
|
(188
|
)
|
|
(329
|
)
|
|
(48
|
)
|
|||
Proceeds from sale of fixed assets
|
—
|
|
|
—
|
|
|
24
|
|
|||
Net cash (used in)/provided by investing activities
|
(3,630
|
)
|
|
30,124
|
|
|
(6,428
|
)
|
|||
Cash Flows from Financing Activities:
|
|
|
|
|
|
||||||
Proceeds from issuance of common stock associated with offerings, net of issuance costs (see Note 11)
|
41,546
|
|
|
—
|
|
|
64,620
|
|
|||
Proceeds from issuance of common stock under the Company’s share-based compensation plans
|
1,138
|
|
|
2,907
|
|
|
1,206
|
|
|||
Proceeds from new credit agreement with HealthCare Royalty
|
45,000
|
|
|
—
|
|
|
—
|
|
|||
Payment of debt issuance costs
|
(192
|
)
|
|
—
|
|
|
—
|
|
|||
Payment on termination of former credit agreement with BioPharma
|
(18,303
|
)
|
|
—
|
|
|
—
|
|
|||
Payments made on Curis Royalty’s debt
|
(4,954
|
)
|
|
(4,273
|
)
|
|
(4,163
|
)
|
|||
Net cash provided by/(used in) financing activities
|
64,235
|
|
|
(1,366
|
)
|
|
61,663
|
|
|||
Net increase/(decrease) in cash and cash equivalents
|
12,250
|
|
|
(7,053
|
)
|
|
25,344
|
|
|||
Cash and cash equivalents, beginning of period
|
26,038
|
|
|
33,091
|
|
|
7,747
|
|
|||
Cash and cash equivalents, end of period
|
$
|
38,288
|
|
|
$
|
26,038
|
|
|
$
|
33,091
|
|
Supplemental cash flow data:
|
|
|
|
|
|
||||||
Cash paid for interest
|
$
|
3,942
|
|
|
$
|
2,787
|
|
|
$
|
3,303
|
|
(1)
|
Nature of Business
|
(2)
|
Summary of Significant Accounting Policies
|
(a)
|
USE OF ESTIMATES
|
(b)
|
CONSOLIDATION
|
(c)
|
REVENUE RECOGNITION
|
•
|
such milestone is commensurate with either of the following:
|
a)
|
the Company’s performance to achieve the milestone (for example, the achievement of the milestone involves a degree of risk and was not reasonably assured at the inception of the arrangement); or
|
b)
|
the enhancement of the value of the deliverable as a result of a specific outcome resulting from the Company’s performance to achieve the milestone (or substantive Company effort is involved in achieving the milestone);
|
•
|
such milestone relates solely to past performance; and
|
•
|
the amount of the milestone payment is reasonable relative to all deliverables and payment terms in the arrangement.
|
(d)
|
RESEARCH AND DEVELOPMENT
|
(e)
|
CASH EQUIVALENTS AND INVESTMENTS
|
(f)
|
LONG-LIVED ASSETS OTHER THAN GOODWILL
|
Asset Classification
|
Estimated Useful Life
|
Laboratory equipment, computers and software
|
3-5 years
|
Leasehold improvements
|
Lesser of life of the lease or the life of the asset
|
Office furniture and equipment
|
5 years
|
(g)
|
GOODWILL
|
(i)
|
TREASURY STOCK
|
(j)
|
BASIC AND DILUTED LOSS PER COMMON SHARE
|
|
For the Year Ended December 31,
|
|||||||
|
2017
|
|
2016
|
|
2015
|
|||
Stock options outstanding
|
16,034,181
|
|
|
13,752,157
|
|
|
13,290,844
|
|
Total antidilutive securities
|
16,034,181
|
|
|
13,752,157
|
|
|
13,290,844
|
|
(k)
|
STOCK-BASED COMPENSATION
|
(l)
|
OPERATING LEASES
|
(m)
|
CONCENTRATION OF RISK
|
(n)
|
COMPREHENSIVE LOSS
|
(o)
|
NEW ACCOUNTING PRONOUNCEMENTS
|
(p)
|
SEGMENT REPORTING
|
(3)
|
Research and Development Collaborations
|
(a)
|
Genentech
|
(b)
|
Aurigene
|
1.
|
IRAK4 Program - a precision oncology program of small molecule inhibitors of IRAK4. The development candidate is CA-4948, an orally available small molecule inhibitor of IRAK4.
|
2.
|
PD1/VISTA Program - an immuno-oncology program of small molecule antagonists of PD1 and VISTA immune checkpoint pathways. The development candidate is CA-170, an orally available small molecule antagonist of PDL1 and VISTA.
|
3.
|
PD1/TIM3 Program - an immuno-oncology program of small molecule antagonists of PD1 and TIM3 immune checkpoint pathways. The development candidate is CA-327, an orally available small molecule antagonist of PDL1 and TIM3.
|
(4)
|
Fair Value of Financial Instruments
|
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.
|
|
Quoted Prices in
Active Markets
(Level 1)
|
|
Other
Observable
Inputs
(Level 2)
|
|
Unobservable
Inputs
(Level 3)
|
|
Fair Value
|
||||||||
|
(in thousands)
|
||||||||||||||
As of December 31, 2017
|
|
|
|
|
|
|
|
||||||||
Cash equivalents:
|
|
|
|
|
|
|
|
||||||||
Money market funds
|
$
|
35,308
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
35,308
|
|
Municipal bonds
|
—
|
|
|
260
|
|
|
—
|
|
|
260
|
|
||||
Short-term investments:
|
|
|
|
|
|
|
|
||||||||
Corporate commercial paper, stock, bonds and notes
|
—
|
|
|
21,944
|
|
|
—
|
|
|
21,944
|
|
||||
Total assets at fair value
|
$
|
35,308
|
|
|
$
|
22,204
|
|
|
$
|
—
|
|
|
$
|
57,512
|
|
|
Quoted Prices in
Active Markets
(Level 1)
|
|
Other
Observable
Inputs
(Level 2)
|
|
Unobservable
Inputs
(Level 3)
|
|
Fair Value
|
||||||||
|
(in thousands)
|
||||||||||||||
As of December 31, 2016
|
|
|
|
|
|
|
|
||||||||
Cash equivalents:
|
|
|
|
|
|
|
|
||||||||
Money market funds
|
$
|
24,542
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
24,542
|
|
Municipal bonds
|
—
|
|
|
330
|
|
|
—
|
|
|
330
|
|
||||
Short- and long-term investments:
|
|
|
|
|
|
|
|
||||||||
Corporate commercial paper, stock, bonds and notes
|
—
|
|
|
18,447
|
|
|
—
|
|
|
18,447
|
|
||||
Total assets at fair value
|
$
|
24,542
|
|
|
$
|
18,777
|
|
|
$
|
—
|
|
|
$
|
43,319
|
|
(5)
|
Investments
|
|
Amortized
Cost
|
|
Unrealized
Gain
|
|
Unrealized
Loss
|
|
Fair Value
|
||||||||
Corporate bonds and notes—short-term
|
$
|
21,946
|
|
|
$
|
—
|
|
|
$
|
(2
|
)
|
|
$
|
21,944
|
|
Total investments
|
$
|
21,946
|
|
|
$
|
—
|
|
|
$
|
(2
|
)
|
|
$
|
21,944
|
|
|
Amortized
Cost
|
|
Unrealized
Gain
|
|
Unrealized
Loss
|
|
Fair Value
|
||||||||
Corporate bonds and notes—short-term
|
$
|
18,451
|
|
|
$
|
2
|
|
|
$
|
(6
|
)
|
|
$
|
18,447
|
|
Total investments
|
$
|
18,451
|
|
|
$
|
2
|
|
|
$
|
(6
|
)
|
|
$
|
18,447
|
|
(6)
|
Stock Plans and Stock Based Compensation
|
|
For the Year Ended
December 31,
|
|||||||
|
2017
|
|
2016
|
|
2015
|
|||
Expected term (years)—Employees
|
5.5
|
|
|
6.0
|
|
|
6.0
|
|
Expected term (years)—Officers
|
5.5
|
|
|
7.0
|
|
|
7.0
|
|
Expected term (years)—Directors
|
6.3
|
|
|
7.0
|
|
|
7.0
|
|
Risk-free interest rate
|
2.0-2.1%
|
|
|
1.4-1.9%
|
|
|
1.5-1.9%
|
|
Expected volatility
|
63-64%
|
|
|
63-70%
|
|
|
68-70%
|
|
Expected dividend yield
|
None
|
|
|
None
|
|
|
None
|
|
|
Number of
Shares
|
|
Weighted
Average
Exercise
Price per
Share
|
|
Weighted
Average
Remaining Contractual Life
|
|
Aggregate Intrinsic Value
|
|||||
Outstanding, December 31, 2016
|
13,752,157
|
|
|
$
|
2.30
|
|
|
|
|
|
||
Granted
|
6,113,000
|
|
|
2.51
|
|
|
|
|
|
|||
Exercised
|
(780,135
|
)
|
|
1.36
|
|
|
|
|
|
|||
Canceled
|
(3,050,841
|
)
|
|
2.33
|
|
|
|
|
|
|||
Outstanding, December 31, 2017
|
16,034,181
|
|
|
$
|
2.42
|
|
|
6.57
|
|
$
|
—
|
|
Exercisable at December 31, 2017
|
8,771,728
|
|
|
$
|
2.54
|
|
|
4.92
|
|
$
|
—
|
|
Vested and unvested expected to vest
|
15,498,301
|
|
|
$
|
2.42
|
|
|
6.49
|
|
$
|
—
|
|
|
Market
Condition Options Granted February 18, 2014 |
|
Market
Condition Options Granted June 2, 2014 |
Expected life (years)—officers
|
6
|
|
6
|
Risk-free interest rate
|
1.9%
|
|
2.1%
|
Volatility
|
70%
|
|
65%
|
Dividends
|
None
|
|
None
|
Number of options granted
|
640,000
|
|
400,000
|
Fair value per share
|
$1.20
|
|
$0.34
|
|
For the Year Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Compensation expense recognized under ESPP
|
$
|
268
|
|
|
$
|
48
|
|
|
$
|
30
|
|
Expected term
|
6-24 months
|
|
|
6 months
|
|
|
6 months
|
|
|||
Risk-free interest rate
|
1.1-1.8%
|
|
|
0.4-0.7%
|
|
|
0.06-0.5%
|
|
|||
Volatility
|
65-76%
|
|
|
64-78%
|
|
|
55-78%
|
|
|||
Dividends
|
None
|
|
|
None
|
|
|
None
|
|
|
For the Year Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Research and development expenses
|
$
|
1,486
|
|
|
$
|
762
|
|
|
$
|
1,023
|
|
General and administrative expenses
|
3,873
|
|
|
3,563
|
|
|
2,852
|
|
|||
Total stock-based compensation expense
|
$
|
5,359
|
|
|
$
|
4,325
|
|
|
$
|
3,875
|
|
(7)
|
Property and Equipment, net
|
|
December 31,
|
||||||
|
2017
|
|
2016
|
||||
Laboratory equipment, computers and software
|
$
|
1,736
|
|
|
$
|
1,624
|
|
Leasehold improvements
|
185
|
|
|
185
|
|
||
Office furniture and equipment
|
354
|
|
|
371
|
|
||
|
2,275
|
|
|
2,180
|
|
||
Less—Accumulated depreciation and amortization
|
(1,909
|
)
|
|
(1,767
|
)
|
||
Total
|
$
|
366
|
|
|
$
|
413
|
|
(8)
|
Accrued Liabilities
|
|
December 31,
|
||||||
|
2017
|
|
2016
|
||||
Accrued compensation
|
$
|
2,187
|
|
|
$
|
2,026
|
|
Professional fees
|
148
|
|
|
157
|
|
||
Accrued interest on debt (see Note 9)
|
193
|
|
|
194
|
|
||
Other
|
265
|
|
|
348
|
|
||
Total
|
$
|
2,793
|
|
|
$
|
2,725
|
|
(9)
|
Debt
|
(a)
|
BioPharma-II
|
(b)
|
HealthCare Royalty Partners III
|
(c)
|
Respective Debt Payments to BioPharma-II and HealthCare Royalty Partners III
|
|
As of
December 31,
|
||||||
|
2017
|
|
2016
|
||||
Debt, current
|
5,919
|
|
|
4,987
|
|
||
Debt issue costs, current
|
(33
|
)
|
|
(48
|
)
|
||
Debt, current portion net of issuance costs
|
$
|
5,886
|
|
|
$
|
4,939
|
|
Debt, long-term
|
35,802
|
|
|
14,992
|
|
||
Debt issue costs, long-term
|
(133
|
)
|
|
(71
|
)
|
||
Debt, net of current portion and issuance costs
|
$
|
35,669
|
|
|
$
|
14,921
|
|
|
Principal
|
||
2018
|
$
|
5,919
|
|
2019
|
6,923
|
|
|
2020
|
8,133
|
|
|
2021
|
9,438
|
|
|
2022
|
10,992
|
|
|
Thereafter
|
316
|
|
|
Total payments
|
41,721
|
|
|
Less current portion, gross
|
(5,919
|
)
|
|
Total long-term debt obligations, gross
|
$
|
35,802
|
|
(10)
|
Commitments
|
(a)
|
OPERATING LEASES
|
Year Ending December 31,
|
|
||
2018
|
935
|
|
|
2019
|
1,001
|
|
|
2020
|
168
|
|
|
Total minimum payments
|
$
|
2,104
|
|
(b)
|
LICENSE AGREEMENTS
|
(11)
|
Common Stock
|
(a)
|
2017 Public Offering of Common Stock
|
(b)
|
2015 Public Offering of Common Stock
|
(c)
|
2015 Sales Agreement with Cowen
|
(12)
|
Income Taxes
|
|
For the Year Ended
December 31,
|
|||||||
|
2017
|
|
2016
|
|
2015
|
|||
Statutory federal income tax rate
|
34.0
|
%
|
|
34.0
|
%
|
|
34.0
|
%
|
State income taxes, net of federal benefit
|
4.4
|
%
|
|
5.0
|
%
|
|
5.1
|
%
|
Research and development tax credits
|
2.7
|
%
|
|
1.3
|
%
|
|
1.4
|
%
|
Orphan drug tax credits
|
10.9
|
%
|
|
10.5
|
%
|
|
—
|
%
|
Deferred compensation
|
(0.8
|
)%
|
|
(0.5
|
)%
|
|
(0.4
|
)%
|
Interest expense
|
(0.5
|
)%
|
|
(0.4
|
)%
|
|
(0.5
|
)%
|
Deferred rate change
|
(104.4
|
)%
|
|
—
|
%
|
|
—
|
%
|
Permanent adjustments and other
|
(5.2
|
)%
|
|
(0.2
|
)%
|
|
0.1
|
%
|
Change in valuation allowance
|
58.9
|
%
|
|
(49.7
|
)%
|
|
(39.7
|
)%
|
Effective income tax rate
|
—
|
|
|
—
|
|
|
—
|
|
|
December 31,
|
||||||
|
2017
|
|
2016
|
||||
Deferred Tax Assets:
|
|
|
|
||||
NOL carryforwards
|
$
|
63,688
|
|
|
$
|
92,012
|
|
Research and development tax credit carryforwards
|
15,340
|
|
|
13,404
|
|
||
Orphan drug tax credit carryforwards
|
15,580
|
|
|
10,148
|
|
||
Depreciation and amortization
|
11,663
|
|
|
18,242
|
|
||
Capitalized research and development expenditures
|
32,550
|
|
|
35,848
|
|
||
Stock options
|
4,948
|
|
|
5,507
|
|
||
Accrued expenses and other
|
155
|
|
|
176
|
|
||
Total Gross Deferred Tax Asset
|
143,924
|
|
|
175,337
|
|
||
Valuation Allowance
|
(143,924
|
)
|
|
(175,337
|
)
|
||
Net Deferred Tax Asset
|
$
|
—
|
|
|
$
|
—
|
|
|
December 31,
|
||||||
|
2017
|
|
2016
|
||||
Deferred Tax Assets:
|
|
|
|
||||
Current deferred tax assets
|
$
|
—
|
|
|
$
|
—
|
|
Non-current deferred tax assets
|
143,924
|
|
|
175,337
|
|
||
Valuation Allowance
|
(143,924
|
)
|
|
(175,337
|
)
|
||
Net Deferred Tax Asset
|
$
|
—
|
|
|
$
|
—
|
|
(13)
|
Related Party Transactions
|
(a)
|
Agreements with Daniel R. Passeri
|
(b)
|
Agreement with Director - Lori A. Kunkel
|
(14)
|
Retirement Savings Plan
|
(15)
|
Selected Quarterly Financial Data (Unaudited)
|
|
Quarter Ended
|
||||||||||||||
|
March 31,
2017 |
|
June 30,
2017 |
|
September 30,
2017 |
|
December 31, 2017
|
||||||||
Revenues
|
$
|
2,131
|
|
|
$
|
2,061
|
|
|
$
|
2,444
|
|
|
$
|
3,262
|
|
Loss from operations
|
(15,053
|
)
|
|
(13,109
|
)
|
|
(14,471
|
)
|
|
(7,127
|
)
|
||||
Net loss
|
(15,742
|
)
|
|
(14,090
|
)
|
|
(15,457
|
)
|
|
(8,028
|
)
|
||||
Net loss per common share (basic and diluted)
|
$
|
(0.11
|
)
|
|
$
|
(0.10
|
)
|
|
$
|
(0.11
|
)
|
|
$
|
(0.05
|
)
|
Weighted average common shares (basic and diluted)
|
142,011,776
|
|
|
143,786,705
|
|
|
146,514,196
|
|
|
164,008,252
|
|
|
Quarter Ended
|
||||||||||||||
|
March 31,
2016 |
|
June 30,
2016 |
|
September 30,
2016 |
|
December 31, 2016
|
||||||||
Revenues
|
$
|
1,726
|
|
|
$
|
1,680
|
|
|
$
|
1,759
|
|
|
$
|
2,362
|
|
Loss from operations
|
(8,807
|
)
|
|
(10,680
|
)
|
|
(27,789
|
)
|
|
(10,763
|
)
|
||||
Net loss
|
(9,441
|
)
|
|
(11,290
|
)
|
|
(28,345
|
)
|
|
(11,335
|
)
|
||||
Net loss per common share (basic and diluted)
|
$
|
(0.07
|
)
|
|
$
|
(0.09
|
)
|
|
$
|
(0.21
|
)
|
|
$
|
(0.08
|
)
|
Weighted average common shares (basic and diluted)
|
129,019,984
|
|
|
129,270,639
|
|
|
132,065,947
|
|
|
140,715,621
|
|
ITEM 9.
|
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
|
ITEM 9A.
|
CONTROLS AND PROCEDURES
|
ITEM 9B.
|
OTHER INFORMATION
|
ITEM 10.
|
DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
|
ITEM 11.
|
EXECUTIVE COMPENSATION
|
ITEM 12.
|
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
|
ITEM 13.
|
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
|
ITEM 14.
|
PRINCIPAL ACCOUNTANT FEES AND SERVICES
|
ITEM 15.
|
EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
|
|
Page
number
in this
report
|
Curis, Inc. and Subsidiaries
|
|
|
|
|
|
|
|
Incorporated by Reference
|
||||||
Exhibit
No.
|
|
Description
|
|
Link to Filing
|
|
Form
|
|
SEC Filing
Date
|
|
Exhibit
Number
|
|
Filed with
this 10-K
|
|
|
Articles of Incorporation and By-laws
|
|
|
|
|
|
|
|
|
|
|
3.1
|
|
Restated Certificate of Incorporation of Curis, Inc., as amended
|
|
|
10-K
|
|
2/29/2016
|
|
3.1
|
|
|
|
3.2
|
|
Certificate of Designations of Curis, Inc.
|
|
|
S-3 (333-50906)
|
|
8/10/2001
|
|
3.2
|
|
|
|
3.3
|
|
Amended and Restated By-laws of Curis, Inc.
|
|
|
10-K
|
|
2/29/2016
|
|
3.3
|
|
|
|
|
|
Instruments defining the rights of security holders, including indentures
|
|
|
|
|
|
|
|
|
|
|
4.1
|
|
Form of Curis Common Stock Certificate
|
|
|
10-K
|
|
3/1/2004
|
|
4.1
|
|
|
|
|
|
Material contracts—Management Contracts and Compensatory Plans
|
|
|
|
|
|
|
|
|
|
|
#10.1
|
|
Employment Agreement, dated June 2, 2014, by and between Curis, Inc. and Ali Fattaey, Ph.D.
|
|
|
10-Q
|
|
8/7/2014
|
|
10.1
|
|
|
|
#10.2
|
|
Amendment to Employment Agreement, dated March 7, 2017, by and between Curis, Inc. and Ali Fattaey, Ph.D.
|
|
|
10-K
|
|
3/9/2017
|
|
10.2
|
|
|
|
#10.3
|
|
Employment Agreement, dated March 29, 2016, by and between Curis, Inc. and James E. Dentzer.
|
|
|
10-Q
|
|
5/9/2016
|
|
10.1
|
|
|
|
#10.4
|
|
Amendment to Employment Agreement, dated March 7, 2017, by and between Curis, Inc. by and between Curis, Inc. and James E. Dentzer
|
|
|
10-K
|
|
3/9/2017
|
|
10.4
|
|
|
|
#10.5
|
|
Employment Agreement, dated February 29, 2016, by and between Curis, Inc. and Mani Mohindru, Ph.D.
|
|
|
10-Q
|
|
5/9/2016
|
|
10.3
|
|
|
|
#10.6
|
|
Amendment to Employment Agreement , dated March 7, 2017 by and between Curis, Inc. and Mani Mohindru Ph.D.
|
|
|
10-K
|
|
3/9/2017
|
|
10.6
|
|
|
|
#10.7
|
|
Employment Agreement, dated February 29, 2016, by and between Curis, Inc. and David Tuck, M.D.
|
|
|
10-Q
|
|
5/9/2016
|
|
10.2
|
|
|
|
#10.8
|
|
Amendment to Employment Agreement, dated March 7, 2017 by and between Curis, Inc. and David Tuck, M.D.
|
|
|
10-K
|
|
3/9/2017
|
|
10.8
|
|
|
|
#10.9
|
|
Form of Indemnification Agreement, by and between Curis, Inc. and each non-employee director of the Board of Directors of Curis, Inc.
|
|
|
10-Q
|
|
8/7/2014
|
|
10.3
|
|
|
|
#10.10
|
|
Curis 2000 Stock Incentive Plan
|
|
|
S-4/A (333-32446)
|
|
5/31/2000
|
|
10.71
|
|
|
|
#10.11
|
|
Curis 2000 Director Stock Option Plan
|
|
|
S-4/A (333-32446)
|
|
5/31/2000
|
|
10.72
|
|
|
|
#10.12
|
|
Form of Incentive Stock Option Agreement for awards granted to named executive officers under Curis’ 2000 Stock Incentive Plan
|
|
|
10-Q
|
|
10/26/2004
|
|
10.2
|
|
|
|
#10.13
|
|
Form of Non-statutory Stock Option Agreement for awards granted to directors and named executive officers under Curis’ 2000 Stock Incentive Plan
|
|
|
10-Q
|
|
10/26/2004
|
|
10.3
|
|
|
|
|
|
|
|
|
Incorporated by Reference
|
||||||
Exhibit
No.
|
|
Description
|
|
Link to Filing
|
|
Form
|
|
SEC Filing
Date
|
|
Exhibit
Number
|
|
Filed with
this 10-K
|
#10.14
|
|
Form of Non-statutory Stock Option Agreement for awards granted to non-employee directors under Curis’ 2000 Director Stock Option Plan
|
|
|
10-Q
|
|
10/26/2004
|
|
10.4
|
|
|
|
#10.15
|
|
Curis 2010 Stock Incentive Plan
|
|
|
Def 14A
|
|
4/16/2010
|
|
Exhibit A
|
|
|
|
#10.16
|
|
Curis 2010 Employee Stock Purchase Plan
|
|
|
|
Def 14A
|
|
4/16/2010
|
|
Exhibit B
|
|
|
#10.17
|
|
Form of Incentive Stock Option Agreement for awards granted to named executive officers under Curis’ 2010 Stock Incentive Plan
|
|
|
8-K
|
|
6/4/2010
|
|
10.1
|
|
|
|
#10.18
|
|
Form of Non-Statutory Stock Option Agreement for awards granted to directors and named executive officers under Curis’ 2010 Stock Incentive Plan
|
|
|
8-K
|
|
6/4/2010
|
|
10.2
|
|
|
|
#10.19
|
|
Form of Restricted Stock Agreement for awards granted to directors and named executive officers under Curis’ 2010 Stock Incentive Plan
|
|
|
8-K
|
|
6/4/2010
|
|
10.3
|
|
|
|
#10.20
|
|
Curis Amended and Restated 2010 Stock Incentive Plan, as amended
|
|
|
8-K
|
|
5/28/2015
|
|
99.1
|
|
|
|
#10.21
|
|
Form of Incentive Stock Option Agreement for awards granted to named executive officers under Curis’ Amended and Restated 2010 Stock Incentive Plan, as amended
|
|
|
|
|
|
|
|
|
X
|
|
#10.22
|
|
Form of Non-Statutory Stock Option Agreement for awards granted to directors and named executive officers under Curis’ Amended and Restated 2010 Stock Incentive Plan, as amended
|
|
|
|
|
|
|
|
|
X
|
|
#10.23
|
|
Form of Restricted Stock Agreement for awards granted to directors and named executive officers under Curis’ Amended and Restated 2010 Stock Incentive Plan, as amended
|
|
|
|
|
|
|
|
|
X
|
|
#10.24
|
|
Form of Incentive Stock Option Agreement (Online Acceptance) for awards granted to named executive officers under Curis’ Amended and Restated 2010 Stock Incentive Plan
|
|
|
10-K
|
|
3/9/2017
|
|
10.21
|
|
|
|
#10.25
|
|
Form of Nonstatutory Stock Option Agreement (Online Acceptance) granted to directors and named executive officers under Curis’ Amended and Restated 2010 Stock Incentive Plan
|
|
|
10-K
|
|
3/9/2017
|
|
10.22
|
|
|
|
#10.26
|
|
Curis Second Amended and Restated 2010 Stock Incentive Plan
|
|
|
8-K
|
|
5/22/2017
|
|
99.1
|
|
|
|
#10.27
|
|
Form of Incentive Stock Option Agreement for awards granted to named executive officers under Curis’ Second Amended and Restated 2010 Stock Incentive Plan
|
|
|
|
|
|
|
|
|
X
|
|
#10.28
|
|
Form of Non-Statutory Stock Option Agreement for awards granted to directors and named executive officers under Curis’ Second Amended and Restated 2010 Stock Incentive Plan
|
|
|
|
|
|
|
|
|
X
|
#10.29
|
|
Form of Restricted Stock Agreement for awards granted to directors and named executive officers under Curis’ Second Amended and Restated 2010 Stock Incentive Plan
|
|
|
|
|
|
|
|
|
X
|
|
#10.30
|
|
Form of Nonstatutory Stock Option Agreement - Inducement Grant pursuant to NASDAQ Stock Market Rule 5635(c)(4)
|
|
|
S-8
|
|
1/6/2017
|
|
99.1
|
|
|
|
#10.31
|
|
Curis Amended and Restated 2010 Employee Stock Purchase Plan, as amended
|
|
|
|
|
|
|
|
|
X
|
|
|
|
Material contracts—Leases
|
|
|
|
|
|
|
|
|
|
|
#10.32
|
|
Lease, dated September 16, 2010, by and between Curis, Inc. and the Trustees of Lexington Office Realty Trust relating to the premises at 4 Maguire Road, Lexington, Massachusetts
|
|
|
8-K
|
|
9/21/2010
|
|
10.1
|
|
|
|
#10.33
|
|
Second Amendment to Lease, dated November 1, 2017, by and between Curis, Inc. and the Trustees of Lexington Office Realty Trust relating to the premises at 4 Maguire Road, Lexington, Massachusetts
|
|
|
10-Q
|
|
11/7/2017
|
|
10.2
|
|
|
|
|
|
|
|
|
Incorporated by Reference
|
||||||
Exhibit
No.
|
|
Description
|
|
Link to Filing
|
|
Form
|
|
SEC Filing
Date
|
|
Exhibit
Number
|
|
Filed with
this 10-K
|
|
|
Material contracts—Financing Agreements
|
|
|
|
|
|
|
|
|
|
|
†10.34
|
|
Credit Agreement, dated November 27, 2012, by and between Curis, Inc., Curis Royalty LLC, a wholly-owned subsidiary of Curis, Inc. and BioPharma Secured Debt Fund II Sub, S.à r.l.
|
|
|
10-K
|
|
3/13/2013
|
|
10.31
|
|
|
|
10.35
|
|
Consent and Payment Direction Letter Agreement, dated November 20, 2012 and effective as of December 11, 2012 by and between Curis, Inc., Curis Royalty LLC and Genentech, Inc.
|
|
|
10-K
|
|
3/13/2013
|
|
10.32
|
|
|
|
†10.36
|
|
Credit Agreement, dated March 3, 2017, by and between Curis, Inc., Curis Royalty LLC, a wholly-owned subsidiary of Curis, Inc. and HealthCare Royalty Partners III, L.P.
|
|
|
10-K
|
|
3/9/2017
|
|
10.27
|
|
|
|
10.37
|
|
Consent and Payment Direction Letter Agreement, dated March 3, 2017 by and between Curis, Inc., Curis Royalty LLC and Genentech, Inc.
|
|
|
10-K
|
|
3/9/2017
|
|
10.28
|
|
|
|
†10.38
|
|
Purchase and Sale Agreement, dated as of December 11, 2012 between Curis and Curis Royalty
|
|
|
10-K
|
|
3/13/2013
|
|
10.33
|
|
|
|
10.39
|
|
Escrow Agreement, dated December 11, 2012, by and between Curis, Curis Royalty LLC, a wholly-owned subsidiary of Curis, BioPharma Secured Debt Fund II Sub, S.à r.l., a Luxembourg limited liability company managed by Pharmakon Advisors and Boston Private Bank and Trust Company
|
|
|
10-K
|
|
3/13/2013
|
|
10.34
|
|
|
|
10.40
|
|
Escrow Agreement, dated March 22, 2017, by and between Curis Royalty LLC, HealthCare Royalty Partners III, L.P., Curis, Inc. and Boston Private Bank and Trust Company
|
|
|
10-Q
|
|
5/4/2017
|
|
10.1
|
|
|
|
|
|
Material contracts—License and Collaboration Agreements
|
|
|
|
|
|
|
|
|
|
|
†10.41
|
|
Collaborative Research, Development and License Agreement, dated June 11, 2003, by and between Curis, Inc. and Genentech, Inc.
|
|
|
10-Q
|
|
8/6/2015
|
|
10.1
|
|
|
|
†10.42
|
|
Collaboration, License and Option Agreement, dated January 18, 2015, by and between Curis, Inc. and Aurigene Discovery Technologies Limited
|
|
|
10-K
|
|
2/24/2015
|
|
10.32
|
|
|
|
†10.43
|
|
First Amendment to Collaboration, License and Option Agreement, dated September 7, 2016, by and between Curis, Inc. and Aurigene Discovery Technologies Limited
|
|
|
10-Q
|
|
11/3/2016
|
|
10.2
|
|
|
|
|
|
|
|
|
Incorporated by Reference
|
||||||
Exhibit
No.
|
|
Description
|
|
Link to Filing
|
|
Form
|
|
SEC Filing
Date
|
|
Exhibit
Number
|
|
Filed with
this 10-K
|
|
|
Material contracts—Miscellaneous
|
|
|
|
|
|
|
|
|
|
|
10.44
|
|
Sales Agreement, dated July 2, 2015, by and between Curis, Inc. and Cowen and Company, LLC
|
|
|
S-3
|
|
7/2/2015
|
|
1.2
|
|
|
|
10.45
|
|
Underwriting Agreement, dated September 13, 2017, by and between Curis, Inc. and Robert W. Baird & Co. Incorporated
|
|
|
8-K
|
|
9/15/2017
|
|
1.1
|
|
|
|
10.46
|
|
Common Stock Purchase Agreement, dated January 18, 2015, by and between Curis, Inc. and Aurigene Discovery Technologies Limited
|
|
|
10-K
|
|
2/24/2015
|
|
10.34
|
|
|
|
10.47
|
|
Stock Purchase Agreement, dated September 7, 2016, by and between Curis, Inc. and Aurigene Discovery Technologies Limited
|
|
|
10-Q
|
|
11/3/2016
|
|
10.3
|
|
|
|
10.48
|
|
Registration Rights Agreement, dated January 18, 2015, by and between Curis, Inc. and Aurigene Discovery Technologies Limited
|
|
|
|
10-K
|
|
2/24/2015
|
|
10.35
|
|
|
10.49
|
|
Registration Rights Agreement, dated September 7, 2016, by and between Curis, Inc. and Aurigene Discovery Technologies Limited
|
|
|
10-Q
|
|
11/3/2016
|
|
10.4
|
|
|
|
|
|
Code of Conduct
|
|
|
|
|
|
|
|
|
|
|
14
|
|
Amended and Restated Code of Business Conduct and Ethics
|
|
|
|
|
|
|
|
|
X
|
|
|
|
Additional Exhibits
|
|
|
|
|
|
|
|
|
|
|
21
|
|
Subsidiaries of Curis
|
|
|
|
|
|
|
|
|
X
|
|
23.1
|
|
Consent of PricewaterhouseCoopers LLP
|
|
|
|
|
|
|
|
|
X
|
|
31.1
|
|
Certification of the Chief Executive Officer pursuant to Rule 13a-14(a) of the Exchange Act/15d-14(a) of the Exchange Act
|
|
|
|
|
|
|
|
|
X
|
|
31.2
|
|
Certification of the Chief Financial Officer pursuant to Rule 13a-14(a) of the Exchange Act/15d-14(a) of the Exchange Act
|
|
|
|
|
|
|
|
|
X
|
|
32.1
|
|
Certification of the Chief Executive Officer pursuant to Rule 13a-14(b)/15d-14(b) of the Exchange Act and 18 U.S.C. Section 1350
|
|
|
|
|
|
|
|
|
X
|
|
32.2
|
|
Certification of the Chief Financial Officer pursuant to Rule 13a-14(b)/15d-14(b) of the Exchange Act and 18 U.S.C. Section 1350
|
|
|
|
|
|
|
|
|
X
|
|
101.INS
|
|
XBRL Instance Document
|
|
|
|
|
|
|
|
|
|
X
|
101.SCH
|
|
XBRL Taxonomy Extension Schema Document
|
|
|
|
|
|
|
|
|
|
X
|
101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
|
|
|
|
|
|
|
|
|
X
|
101.DEF
|
|
XBRL Taxonomy Extension Definition Linkbase Document
|
|
|
|
|
|
|
|
|
|
X
|
101.LAB
|
|
XBRL Taxonomy Extension Label Linkbase Document
|
|
|
|
|
|
|
|
|
|
X
|
101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
|
|
|
|
|
|
|
|
|
X
|
†
|
Confidential treatment has been granted as to certain portions, which portions have been separately filed with the Securities and Exchange Commission.
|
††
|
Confidential treatment has been requested as to certain portions, which portions have been separately filed with the Securities and Exchange Commission.
|
ITEM 16.
|
FORM 10-K SUMMARY
|
|
|
|
C
URIS
, I
NC
.
|
||
|
|
|
By:
|
|
/
S
/ A
LI
F
ATTAEY
|
|
|
Ali Fattaey
President and Chief Executive Officer
|
|
|
|
|
|
Signature
|
|
Title
|
|
Date
|
|
|
|
||
/s/ ALI FATTAEY
|
|
President, Chief Executive Officer and Director (Principal Executive Officer)
|
|
March 8, 2018
|
Ali Fattaey
|
|
|
||
/s/ JAMES DENTZER
|
|
Chief Financial and Administrative Officer (Principal Financial and Accounting Officer)
|
|
March 8, 2018
|
James Dentzer
|
|
|
||
/s/ MARTYN D. GREENACRE
|
|
Chairman of the Board of Directors
|
|
March 8, 2018
|
Martyn D. Greenacre
|
|
|
||
/s/ KENNETH I. KAITIN
|
|
Director
|
|
March 8, 2018
|
Kenneth I. Kaitin
|
|
|
||
/s/ LORI A. KUNKEL
|
|
Director
|
|
March 8, 2018
|
Lori A. Kunkel
|
|
|
||
/s/ ROBERT MARTELL
|
|
Director
|
|
March 8, 2018
|
Robert Martell
|
|
|
||
/s/ MARC RUBIN
|
|
Director
|
|
March 8, 2018
|
Marc Rubin
|
|
|
|
|
Participant:
|
[Employee Name]
|
Participant’s address:
|
[Employee Address]
|
Tax Identification No.:
|
[Employee Social Security #]
|
Shares:
|
____________ shares of Common Stock
|
Per Share Exercise Price:
|
$______ per share
|
Vesting Date:
|
___________________________
|
Grant Date:
|
___________________________
|
Expiration Date:
|
___________________________
|
Summary Vesting Schedule:
|
See Section 2(a) for details.
|
Date: ___________________________
|
____________________________________
|
|
[Employee Name and Address]
|
1.
|
Grant of Option
.
|
2.
|
Vesting Schedule
.
|
3.
|
Exercise of Option
.
|
Participant:
|
[Employee Name]
|
Circle One:
|
Employee Consultant Director
|
Participant’s address:
|
[Employee Address]
|
Tax Identification No.:
|
[Employee Social Security #]
|
Shares:
|
____________ shares of Common Stock
|
Per Share Exercise Price:
|
$______ per share
|
Vesting Date:
|
___________________________
|
Grant Date:
|
___________________________
|
Expiration Date:
|
___________________________
|
Summary Vesting Schedule:
|
See Section 2(a) for details.
|
Date: ___________________________
|
____________________________________
|
|
[Employee Name and Address]
|
1.
|
Grant of Option
.
|
2.
|
Vesting Schedule
.
|
3.
|
Exercise of Option
.
|
Name of Recipient:
|
_____________________
|
Number of shares of restricted common stock awarded:
|
_____________________
|
Grant Date:
|
_____________________
|
Curis, Inc.
By:___________________________
[
insert name and title
]
|
Name [LAST_NAME]
|
Option Number:
|
[OPTION_NUMBER]
|
[ADDRESS_LINE_1]
|
Plan:
|
[EQUITY_PLAN]
|
[CITY, STATE]
[ZIPCODE]
|
ID:
|
[EMPLOYEE_IDENTIFIER]
|
Shares
|
Vest Type
|
Full Vest
|
[SHARES_PERIOD1,'999,999,999'%]
|
On Vest Date
|
[VEST_DATE_PERIOD1,'MM/DD/YYYY']
|
[SHARES_PERIOD2,'999,999,999']
|
[Quarterly]
|
[VEST_DATE_PERIOD2,'MM/DD/YYYY']
|
1.
|
Grant of Option
.
|
2.
|
Vesting Schedule
.
|
3.
|
Exercise of Option
.
|
[FIRST_NAME_LAST_NAME]
|
Option Number:
|
[OPTION_NUMBER
|
[ADDRESS_LINE_1]
|
Plan:
|
[EQUITY_PLAN]
|
[CITY, STATE]
[ZIPCODE]
|
ID:
|
[EMPLOYEE_IDENTIFIER]
|
Shares
|
Vest Type
|
Full Vest
|
[SHARES_PERIOD1,'999,999,999']
|
On Vest Date
|
[VEST_DATE_PERIOD1,'MM/DD/YYYY']
|
[SHARES_PERIOD2,'999,999,999']
|
[Quarterly]
|
[VEST_DATE_PERIOD2,'MM/DD/YYYY']
|
1.
|
Grant of Option
.
|
2.
|
Vesting Schedule
.
|
3.
|
Exercise of Option
.
|
Name of Recipient:
|
_____________________
|
Number of shares of restricted common stock awarded:
|
_____________________
|
Grant Date:
|
_____________________
|
Curis, Inc.
By:___________________________
[
insert name and title
]
|
(a)
|
“
Acquisition Price
” shall have the meaning given such term in Section 18(b)(2) of the Plan.
|
(b)
|
“
Board
” shall mean the Board of Directors of the Company.
|
(c)
|
“
Code
” shall mean the Internal Revenue Code of 1986, as amended.
|
(d)
|
“
Committee
” shall have the meaning given such term in Section 13 of the Plan.
|
(e)
|
“
Common Stock
” shall mean the common stock, par value $0.01, of the Company.
|
(f)
|
“
Company
” shall mean Curis, Inc.
|
(g)
|
“
Compensation
” shall mean the amount of money reportable on the employee’s Federal Income Tax Withholding Statement, excluding overtime, shift premium, incentive or bonus awards, allowances and reimbursements for expenses such as relocation allowances for travel expenses, income or gains associated with the grant or vesting of restricted stock, income or gains on the exercise of Company stock options or stock appreciation rights, and similar items, whether or not shown on the employee’s Federal Income Tax Withholding Statement, but including, in the case of salespersons, sales commissions to the extent determined by the Board.
|
(h)
|
“
Designated Subsidiaries
” shall mean the Subsidiaries which have been designated by the Board from time to time in its sole discretion as eligible to participate in the Plan.
|
(i)
|
“
Enrollment Date
” shall mean the first day of each Offering Period.
|
(j)
|
“
Exercise Date
” shall mean the last day of each Purchase Period.
|
(k)
|
“
Fair Market Value
” shall mean, as of any date, (a) the closing price (for the primary trading session) on any national securities exchange on which the Common Stock is listed, (b) the closing price of the Common Stock on the Nasdaq National Market or (c) the average of the closing bid and asked prices in the over-the-counter-market, whichever is applicable, as published in
The Wall Street Journal
. If no sales of Common Stock were made on such a day, the price of the Common Stock for purposes of clause (a), (b) and (c) above shall be the reported price for the next preceding day on which sales were made.
|
(l)
|
“
Offering Period
” shall mean the period of approximately twenty-four (24) months during which an option granted pursuant to the Plan may be exercised, commencing on the first Trading Day on or after June 15 and December 15 of each year and terminating on the last Trading Day in the period ending twenty-four (24) months later. The duration and timing of an Offering Period may be changed pursuant to Section 4 of this Plan.
|
(m)
|
“
Option Shares
” shall have the meaning given such term in Section 7 of the Plan.
|
(n)
|
“
Participant
” shall have the meaning given such term in Section 5(a) of the Plan.
|
(o)
|
“
Plan
” shall mean this Amended and Restated 2010 Employee Stock Purchase Plan.
|
(p)
|
“
Purchase Period
” shall mean the period commencing the day after an Exercise Date and ending on the Trading Day closest to the day that is six (6) months after the preceding Exercise Date, except that the first Purchase Period of any Offering Period shall commence on the Enrollment Date and end with the Trading Day that is six (6) months after the Enrollment Date. The duration and timing of Purchase Periods may be changed pursuant to Section 4 of the Plan.
|
(q)
|
“
Purchase Price
” shall mean, unless the Board determines otherwise, an amount equal to 85% of the Fair Market Value of a share of Common Stock on the Enrollment Date or on the Exercise Date, whichever is lower.
|
(r)
|
“
Reorganization Event
” shall have the meaning given such term in Section 18(b)(i) of the Plan.
|
(s)
|
“
Subsidiary
” shall mean any present or future subsidiary corporation as defined in Section 424(f) of the Code.
|
(t)
|
“
Trading Day
” shall mean a day on which national stock exchanges and the Nasdaq System are open for trading.
|
(a)
|
All employees of the Company, including directors who are employees, and all employees of any Designated Subsidiary are eligible to participate in any one or more of the offerings to purchase Common Stock under the Plan provided that:
|
(i)
|
they are customarily employed by the Company or a Designated Subsidiary for more than 20 hours a week and for more than five months in a calendar year; and
|
(ii)
|
they have been employed by the Company or a Designated Subsidiary for at least six months prior to enrolling in the Plan; and
|
(iii)
|
they are employees of the Company or a Designated Subsidiary on the on a given Enrollment Date.
|
(b)
|
Any provisions of the Plan to the contrary notwithstanding, no employee shall be granted an option under the Plan (i) to the extent that, immediately after the grant, such employee (or any other person whose stock would be attributed to such employee pursuant to Section 424(d) of the Code) would own capital stock of the Company or of any Subsidiary and/or hold outstanding options to purchase such stock possessing five percent (5%) or more of the total combined voting power or value of all classes of the capital stock of the Company or of any Subsidiary, or (ii) to the extent that his or her rights to purchase stock under all employee stock purchase plans of the Company and its Subsidiaries accrues at a rate which exceeds Twenty-Five Thousand Dollars ($25,000) worth of stock (determined at the Fair Market Value of the shares at the time such option is granted) for each calendar year in which such option is outstanding at any time. In the event that an employee may not be granted an option under the Plan because of the foregoing restrictions, the employee shall be granted an option to purchase the maximum number of shares that would not violate the foregoing restrictions.
|
(c)
|
The Company retains the discretion to determine which eligible employees may participate in an offering pursuant to and consistent with Treasury Regulation Sections 1.423-2(e) and (f).
|
(a)
|
An eligible employee may become a participant in the Plan (a “
Participant
”) by completing a payroll deduction authorization form in the form designated by the Company from time to time and filing it at least fifteen (15) days prior to the applicable Enrollment Date with the Company’s payroll office or such other office as the Company may direct.
|
(b)
|
The payroll deduction authorization form will authorize a regular payroll deduction from the Compensation received by the employee during the Offering Period. Payroll deductions for a Participant shall commence on the first payroll following the Enrollment Date and shall end on the last payroll in the Offering Period to which such authorization is applicable, unless sooner terminated by the Participant as provided in Section 10 hereof.
|
(a)
|
At the time a Participant files his or her payroll deduction authorization form, he or she shall elect to have payroll deductions made on each pay day during the Offering Period in an amount not exceeding fifteen percent (15%) of the Compensation which he or she receives on each pay day during the Offering Period. Such payroll deductions shall be in whole percentages only. The Board may, at its discretion, designate a lower maximum contribution rate. Payroll deductions may be at a rate of between 1% and 15% of Compensation with any change in Compensation during the Offering Period to result in an automatic corresponding change in the dollar amount withheld. The minimum payroll deduction is such percentage of Compensation as may be established from time to time by the Board.
|
(b)
|
All payroll deductions made for a Participant shall be credited to his or her account under the Plan. A Participant may not make any additional payments into such account.
|
(c)
|
A Participant may increase, decrease or discontinue his or her payroll deduction during any Offering Period, by filing a new payroll deduction authorization form. The Board may, in its discretion, limit the number of participation rate changes during any Offering Period. If a Participant elects to discontinue payroll deductions during an Offering Period, but does not elect to withdraw his or her funds pursuant to Section 10, funds deducted prior to such election to discontinue will be applied to the purchase of Common Stock on the next occurring Exercise Date. A Participant’s payroll deduction authorization form shall remain in effect for successive Offering Periods unless terminated as provided in Section 10 hereof.
|
(d)
|
At the time the option (as described in Section 7) is exercised, in whole or in part, or at the time any of the Common Stock issued under the Plan is disposed of, the Participant must make adequate provision for the Company’s federal, state, or other tax withholding obligations, if any, which arise upon the exercise of the option or the disposition of the Common Stock. At any time, the Company may, but shall not be obligated to, withhold from the Participant’s compensation the amount necessary for the Company to meet applicable withholding obligations, including any withholding required to make available to the Company any tax deductions or benefits attributable to sale or other disposition of Common Stock by the Participant.
|
(a)
|
On the Enrollment Date of each Offering Period, each eligible employee participating in such Offering Period shall be granted an option to purchase (at the applicable Purchase
|
(b)
|
To the extent permitted by any applicable laws, regulations, or rules of the established stock exchange, national market system, or over-the-counter market on which the Common Stock trades, if the Fair Market Value of the Common Stock on the Enrollment Date of the next Offering Period is lower than the Fair Market Value of the Common Stock on the Enrollment Date of any current Offering Period, then all Participants in such current Offering Period shall be automatically withdrawn from such Offering Period immediately after the exercise of their option on the Exercise Date and shall be automatically re-enrolled in the next Offering Period as of the first day thereof.
|
(a)
|
Unless a Participant withdraws from the Plan as provided in Section 10 hereof, his or her option for the purchase of shares shall be exercised automatically on each Exercise Date during the Offering Period, and a number of full shares not exceeding the number of shares as to which such Participant’s option is exercisable on such Exercise Date shall be purchased for such Participant at the applicable Purchase Price with the accumulated payroll deductions in his or her account. No fractional shares shall be purchased. Any balance remaining in a Participant’s payroll deduction account at the end of a Purchase Period will be automatically refunded to the Participant, except that any balance which is less than the purchase price of one share of Common Stock will be carried forward into the Participant’s payroll deduction account for the following Purchase Period or Offering Period, unless the employee elects not to participate in the next Purchase Period or Offering Period, in which case the balance in the employee’s account shall be refunded. During a Participant’s lifetime, a Participant’s option to purchase shares hereunder is exercisable only by him or her.
|
(a)
|
A Participant may withdraw all but not less than all the payroll deductions credited to his or her account and not yet used to exercise his or her option under the Plan at any time by giving written notice to the Company in the form designated by the Company. All of the Participant’s payroll deductions credited to his or her account shall be paid to such Participant promptly after receipt of notice of withdrawal and such Participant’s option for the Offering Period shall be automatically terminated, and no further payroll deductions for the purchase of shares shall be made for such Offering Period. If a Participant withdraws
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(b)
|
Upon a Participant’s ceasing to be an employee, for any reason, he or she shall be deemed to have elected to withdraw from the Plan and the payroll deductions credited to such Participant’s account during the Offering Period but not yet used to exercise the option shall be returned to such Participant or, in the case of his or her death, to the person or persons entitled thereto under Section 14 hereof, and such Participant’s option shall be automatically terminated. If, prior to the last day of the Offering Period, the Designated Subsidiary by which the employee is employed shall cease to be a Subsidiary of the Company, or if the employee is transferred to a Subsidiary of the Company that is not a Designated Subsidiary, the employee shall be deemed to have terminated employment for purposes of this Plan.
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(c)
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A Participant’s withdrawal from an Offering Period shall not have any effect upon his or her eligibility to participate in any similar plan which may hereafter be adopted by the Company or in succeeding Offering Periods.
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(a)
|
The maximum number of shares of the Common Stock which shall be made available for sale under the Plan shall be 10,000,000 shares, subject to adjustment as provided in Section 18(a) hereof. If, on a given Exercise Date, the number of shares with respect to which options are to be exercised exceeds the number of shares then available under the Plan, the Company shall make a pro rata allocation of the shares remaining available for purchase in as uniform a manner as shall be practicable and as it shall determine to be equitable.
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(b)
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The Participant shall have no interest or voting right in shares covered by his or her option until such option has been exercised and then only with respect to the Option Shares actually purchased for the account of the Participant.
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(a)
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The Plan shall be administered by the Board or a committee of members of the Board appointed by the Board (a “Committee”). The Board or its Committee has authority to make rules and regulations for the administration of the Plan and its interpretation and decisions with regard thereto shall be final and conclusive. Any reference to the authority of the Committee to act under this Plan shall be contingent upon the Board having delegated such authority to the Committee. All references to the Board contained herein shall also refer to its Committee, as applicable.
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(b)
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Without stockholder consent and without regard to whether any Participant rights may be considered to have been “adversely affected,” the Board shall be entitled to change the Offering Periods and Purchase Periods, limit the frequency and/or number of changes in the amount withheld during an Offering Period, establish the exchange ratio applicable to amounts withheld in a currency other than U.S. dollars, permit payroll withholding in excess of the amount designated by a Participant in order to adjust for delays or mistakes in the Company’s processing of properly completed withholding elections, establish reasonable waiting and adjustment periods and/or accounting and crediting procedures to
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(a)
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A Participant may file a written designation of a beneficiary who is to receive any shares and cash, if any, from the Participant’s account under the Plan in the event of such Participant’s death subsequent to an Exercise Date on which the option is exercised but prior to delivery to such Participant of such shares and cash. In addition, a Participant may file a written designation of a beneficiary who is to receive any cash from the Participant’s account under the Plan in the event of such Participant’s death prior to exercise of the option. If a Participant is married and the designated beneficiary is not the spouse, spousal consent shall be required for such designation to be effective.
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(b)
|
Such designation of beneficiary may be changed by the Participant at any time by written notice. In the event of the death of a Participant and in the absence of a beneficiary validly designated under the Plan who is living at the time of such Participant’s death, the Company shall deliver such shares and/or cash to the executor or administrator of the estate of the Participant, or if no such executor or administrator has been appointed (to the knowledge of the Company), the Company, in its discretion, may deliver such shares and/or cash to the spouse or to any one or more dependents or relatives of the Participant, or if no spouse, dependent or relative is known to the Company, then to such other person as the Company may designate.
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(a)
|
Changes in Capitalization
. In the event of any stock split, reverse stock split, stock dividend, recapitalization, combination of shares, reclassification of shares, spin-off or other similar change in capitalization or event, or distribution to holders of Common Stock other than an ordinary cash dividend, (i) the number and class of securities available under this Plan, (ii) the share limitations set forth in Sections 3 and 7, and (iii) the Purchase Price shall be equitably adjusted to the extent determined by the Board.
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(i)
|
Definition
. A “
Reorganization Event
” shall mean: (A) any merger or consolidation of the Company with or into another entity as a result of which all of the Common Stock of the Company is converted into or exchanged for the right to receive cash,
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(ii)
|
Consequences of a Reorganization Event on Options
. In connection with a Reorganization Event, the Board may take any one or more of the following actions as to outstanding options on such terms as the Board determines: (A) provide that options shall be assumed, or substantially equivalent options shall be substituted, by the acquiring or succeeding corporation (or an affiliate thereof), (B) upon written notice to Participants, provide that all outstanding options will be terminated immediately prior to the consummation of such Reorganization Event and that all such outstanding options will become exercisable to the extent of accumulated payroll deductions as of a date specified by the Board in such notice, which date shall not be less than ten (10) days preceding the effective date of the Reorganization Event, (C) upon written notice to Participants, provide that all outstanding options will be cancelled as of a date prior to the effective date of the Reorganization Event and that all accumulated payroll deductions will be returned to participating employees on such date, (D) in the event of a Reorganization Event under the terms of which holders of Common Stock will receive upon consummation thereof a cash payment for each share surrendered in the Reorganization Event (the “
Acquisition Price
”), change the last day of the Offering Period to be the date of the consummation of the Reorganization Event and make or provide for a cash payment to each employee equal to (1) (i) the Acquisition Price times (ii) the number of shares of Common Stock that the Participant’s accumulated payroll deductions as of immediately prior to the Reorganization Event could purchase at the Purchase Price, where the Acquisition Price is treated as the fair market value of the Common Stock on the last day of the applicable Plan Period for purposes of determining the Purchase Price under Section 2(r) hereof, and where the number of shares that could be purchased is subject to the limitations set forth in Sections 3 and 7, minus (2) the result of multiplying such number of shares by such Purchase Price, (E) provide that, in connection with a liquidation or dissolution of the Company, options shall convert into the right to receive liquidation proceeds (net of the Purchase Price thereof) and (vi) any combination of the foregoing.
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(iii)
|
For purposes of clause (b)(ii)(A) above, an option shall be considered assumed if, following consummation of the Reorganization Event, the replacement option confers the right to purchase, for each share of Common Stock subject to the option immediately prior to the consummation of the Reorganization Event, the consideration (whether cash, securities or other property) received as a result of the Reorganization Event by holders of Common Stock for each share of Common Stock held immediately prior to the consummation of the Reorganization Event (and if holders were offered a choice of consideration, the type of consideration chosen by the holders of a majority of the outstanding shares of Common Stock); provided, however, that if the consideration received as a result of the Reorganization Event is not solely common stock of the acquiring or succeeding corporation (or an affiliate thereof), the Company may, with the consent of the acquiring or succeeding corporation, provide for the consideration to be received upon the exercise of options to consist solely of such number of shares of common stock of the acquiring or succeeding corporation (or an affiliate thereof) that the Board determines to be equivalent in value (as of the date of such determination or
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|
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Adopted by the Board of Directors
|
|
|
on April 6, 2010
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|
|
|
|
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Approved by the stockholders on
|
|
|
June 3, 2010
Amended and Restated by the Board of Directors on March 27, 2017
Approved by the stockholders on May 16, 2017
|
1.
|
Section 3(b) of the ESPP is amended and restated in its entirety to read as follows:
|
2.
|
Section 7(a) of the ESPP is amended and restated in its entirety to read as follows:
|
•
|
No employee, officer or director shall perform services as a consultant, employee, officer, director, advisor or in any other capacity for, or have a financial interest in, a direct competitor of the Company, other than services performed at the request of the Company and other than a financial interest representing less than one percent (1%) of the outstanding shares of a publicly-held company; and
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•
|
No employee, officer or director shall use his or her position with the Company to influence a transaction with a supplier or customer in which such person has any personal interest, other than a financial interest representing less than one percent (1%) of the outstanding shares of a publicly-held company.
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SUBSIDIARY NAME
|
JURISDICTION OF ORGANIZATION
|
DOING BUSINESS AS
|
Curis Securities Corporation
|
Massachusetts
|
Curis Securities Corporation
|
Curis Royalty LLC
|
Delaware
|
Curis Royalty LLC
|
/s/ P
RICEWATERHOUSE
C
OOPERS
LLP
|
Boston, Massachusetts
|
March 8, 2018
|
1.
|
I have reviewed this Annual Report on Form 10-K of Curis, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date:
|
March 8, 2018
|
/
S
/ A
LI
F
ATTAEY
|
|
|
Ali Fattaey
|
|
|
President and Chief Executive Officer
|
|
|
(Principal Executive Officer)
|
1.
|
I have reviewed this Annual Report on Form 10-K of Curis, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date:
|
March 8, 2018
|
/
S
/ JAMES E. DENTZER
|
|
|
James Dentzer
|
|
|
Chief Financial and Administrative Officer
|
|
|
(Principal Financial and Accounting Officer)
|
Date:
|
March 8, 2018
|
/
S
/ A
LI
F
ATTAEY
|
|
|
Ali Fattaey
|
|
|
President and Chief Executive Officer
|
|
|
(Principal Executive Officer)
|
Date:
|
March 8, 2018
|
/
S
/ JAMES E. DENTZER
|
|
|
James Dentzer
|
|
|
Chief Financial and Administrative Officer
|
|
|
(Principal Financial and Accounting Officer)
|