ý
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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|
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Delaware
|
|
04-3505116
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(State or Other Jurisdiction of
Incorporation or Organization)
|
|
(I.R.S. Employer
Identification No.)
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|
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4 Maguire Road
Lexington, Massachusetts
|
|
02421
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(Address of Principal Executive Offices)
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(Zip Code)
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Title of each class
|
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Trading Symbol
|
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Name of each exchange on which registered
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Common Stock, Par Value $0.01 per share
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CRIS
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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
x
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Smaller reporting company
x
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|
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Emerging growth company
¨
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Page
Number
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PART I.
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FINANCIAL INFORMATION
|
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Item 1.
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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 1A.
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Item 6.
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Item 1.
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UNAUDITED FINANCIAL STATEMENTS
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June 30,
2019 |
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December 31,
2018 |
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ASSETS
|
|
|
|
||||
Current Assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
27,219
|
|
|
$
|
23,636
|
|
Investments
|
8,099
|
|
|
634
|
|
||
Short term investment – restricted
|
153
|
|
|
—
|
|
||
Accounts receivable
|
2,134
|
|
|
2,864
|
|
||
Prepaid expenses and other current assets
|
819
|
|
|
827
|
|
||
Total current assets
|
38,424
|
|
|
27,961
|
|
||
Property and equipment, net
|
234
|
|
|
267
|
|
||
Operating lease right-of-use asset
|
598
|
|
|
—
|
|
||
Long-term investment – restricted
|
—
|
|
|
153
|
|
||
Goodwill
|
8,982
|
|
|
8,982
|
|
||
Other assets
|
2
|
|
|
2
|
|
||
Total assets
|
$
|
48,240
|
|
|
$
|
37,365
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
|
|
||||
Current Liabilities:
|
|
|
|
||||
Accounts payable
|
$
|
2,163
|
|
|
$
|
2,909
|
|
Accrued liabilities
|
1,573
|
|
|
3,457
|
|
||
Operating lease liability
|
646
|
|
|
—
|
|
||
Current portion of long-term debt, net
|
—
|
|
|
6,884
|
|
||
Total current liabilities
|
4,382
|
|
|
13,250
|
|
||
Long-term debt, net
|
—
|
|
|
28,600
|
|
||
Liability related to the sale of future royalties, net
|
64,127
|
|
|
—
|
|
||
Other long-term liabilities
|
—
|
|
|
11
|
|
||
Total liabilities
|
68,509
|
|
|
41,861
|
|
||
Stockholders’ Equity:
|
|
|
|
||||
Common stock, $0.01 par value—101,250,000 shares authorized; 33,202,871 shares issued and outstanding at June 30, 2019; 67,500,000 shares authorized; 33,159,253 shares issued and outstanding at December 31, 2018
|
332
|
|
|
332
|
|
||
Additional paid-in capital
|
981,336
|
|
|
980,012
|
|
||
Accumulated deficit
|
(1,001,937
|
)
|
|
(984,840
|
)
|
||
Total stockholders’ equity
|
(20,269
|
)
|
|
(4,496
|
)
|
||
Total liabilities and stockholders’ equity
|
$
|
48,240
|
|
|
$
|
37,365
|
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Revenues:
|
|
|
|
|
|
|
|
||||||||
Royalties
|
$
|
2,142
|
|
|
$
|
2,394
|
|
|
$
|
4,279
|
|
|
$
|
4,868
|
|
Contra revenue
|
(48
|
)
|
|
(36
|
)
|
|
(418
|
)
|
|
(42
|
)
|
||||
Total revenues
|
2,094
|
|
|
2,358
|
|
|
3,861
|
|
|
4,826
|
|
||||
Costs and expenses:
|
|
|
|
|
|
|
|
||||||||
Cost of royalty revenues
|
89
|
|
|
134
|
|
|
197
|
|
|
263
|
|
||||
Research and development
|
5,620
|
|
|
6,451
|
|
|
9,694
|
|
|
14,717
|
|
||||
General and administrative
|
2,526
|
|
|
3,633
|
|
|
5,669
|
|
|
7,614
|
|
||||
Total costs and expenses
|
8,235
|
|
|
10,218
|
|
|
15,560
|
|
|
22,594
|
|
||||
Loss from operations
|
(6,141
|
)
|
|
(7,860
|
)
|
|
(11,699
|
)
|
|
(17,768
|
)
|
||||
Other (expense) income:
|
|
|
|
|
|
|
|
||||||||
Loss on debt extinguishment
|
—
|
|
|
—
|
|
|
(3,495
|
)
|
|
—
|
|
||||
Interest income
|
235
|
|
|
189
|
|
|
343
|
|
|
375
|
|
||||
Non-cash imputed interest expense related to the sale of future royalties
|
(1,287
|
)
|
|
—
|
|
|
(1,417
|
)
|
|
—
|
|
||||
Interest expense
|
(20
|
)
|
|
(993
|
)
|
|
(829
|
)
|
|
(2,018
|
)
|
||||
Total other expense, net
|
(1,072
|
)
|
|
(804
|
)
|
|
(5,398
|
)
|
|
(1,643
|
)
|
||||
Net loss
|
$
|
(7,213
|
)
|
|
$
|
(8,664
|
)
|
|
$
|
(17,097
|
)
|
|
$
|
(19,411
|
)
|
Net loss per common share (basic and diluted)
|
$
|
(0.22
|
)
|
|
$
|
(0.26
|
)
|
|
$
|
(0.52
|
)
|
|
$
|
(0.59
|
)
|
Weighted average common shares (basic and diluted)
|
33,154,566
|
|
|
33,135,391
|
|
|
33,158,222
|
|
|
33,094,772
|
|
||||
Net loss
|
$
|
(7,213
|
)
|
|
$
|
(8,664
|
)
|
|
$
|
(17,097
|
)
|
|
$
|
(19,411
|
)
|
Other comprehensive loss, net of tax:
|
|
|
|
|
|
|
|
||||||||
Unrealized gain on marketable securities
|
—
|
|
|
5
|
|
|
—
|
|
|
1
|
|
||||
Comprehensive loss
|
$
|
(7,213
|
)
|
|
$
|
(8,659
|
)
|
|
$
|
(17,097
|
)
|
|
$
|
(19,410
|
)
|
|
Common Stock
|
|
Additional
Paid-in
Capital
|
|
Treasury
Stock
|
|
Accumulated
Deficit
|
|
Accumulated
Other
Comprehensive
Loss
|
|
Total
Stockholders’
Equity
|
|||||||||||||||
|
Shares
|
|
Amount
|
|
||||||||||||||||||||||
December 31, 2018
|
33,159,253
|
|
|
$
|
332
|
|
|
$
|
980,012
|
|
|
$
|
—
|
|
|
$
|
(984,840
|
)
|
|
$
|
—
|
|
|
$
|
(4,496
|
)
|
Recognition of employee stock-based compensation
|
—
|
|
|
—
|
|
|
651
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
651
|
|
||||||
Sales of restricted stock awards
|
(8,473
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|
(9,884
|
)
|
|
—
|
|
|
(9,884
|
)
|
|||||||
March 31, 2019
|
33,150,780
|
|
|
$
|
332
|
|
|
$
|
980,663
|
|
|
$
|
—
|
|
|
$
|
(994,724
|
)
|
|
$
|
—
|
|
|
$
|
(13,729
|
)
|
Issuance of stock under the Employee Stock Purchase Plan
|
52,091
|
|
|
—
|
|
|
42
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
42
|
|
||||||
Recognition of employee stock-based compensation
|
—
|
|
|
—
|
|
|
631
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
631
|
|
||||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(7,213
|
)
|
|
—
|
|
|
(7,213
|
)
|
||||||
June 30, 2019
|
33,202,871
|
|
|
$
|
332
|
|
|
$
|
981,336
|
|
|
$
|
—
|
|
|
$
|
(1,001,937
|
)
|
|
$
|
—
|
|
|
$
|
(20,269
|
)
|
|
Common Stock
|
|
Additional
Paid-in
Capital
|
|
Treasury
Stock
|
|
Accumulated
Deficit
|
|
Accumulated
Other
Comprehensive
Loss
|
|
Total
Stockholders’
Equity
|
|||||||||||||||
|
Shares
|
|
Amount
|
|
||||||||||||||||||||||
December 31, 2017
|
33,075,949
|
|
|
$
|
331
|
|
|
$
|
977,453
|
|
|
$
|
(1,524
|
)
|
|
$
|
(952,265
|
)
|
|
$
|
(2
|
)
|
|
$
|
23,993
|
|
Issuances of common stock under grant of restricted stock awards
|
294,250
|
|
|
3
|
|
|
(3
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Recognition of employee stock-based compensation
|
—
|
|
|
—
|
|
|
1,226
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,226
|
|
||||||
Retirement of Treasury Stock
|
(244,569
|
)
|
|
(3
|
)
|
|
(1,521
|
)
|
|
1,524
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Other comprehensive loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4
|
)
|
|
(4
|
)
|
||||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(10,747
|
)
|
|
—
|
|
|
(10,747
|
)
|
||||||
March 31, 2018
|
33,125,630
|
|
|
$
|
331
|
|
|
$
|
977,155
|
|
|
$
|
—
|
|
|
$
|
(963,012
|
)
|
|
$
|
(6
|
)
|
|
$
|
14,468
|
|
Issuance of stock under the Employee Stock Purchase Plan
|
55,516
|
|
|
1
|
|
|
111
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
112
|
|
||||||
Recognition of employee stock-based compensation
|
—
|
|
|
—
|
|
|
1,189
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,189
|
|
||||||
Other comprehensive gain
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5
|
|
|
5
|
|
||||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(8,664
|
)
|
|
—
|
|
|
(8,664
|
)
|
||||||
June 30, 2018
|
33,181,146
|
|
|
$
|
332
|
|
|
$
|
978,455
|
|
|
$
|
—
|
|
|
$
|
(971,676
|
)
|
|
$
|
(1
|
)
|
|
$
|
7,110
|
|
|
Six Months Ended
June 30, |
||||||
|
2019
|
|
2018
|
||||
Cash flows from operating activities:
|
|
|
|
||||
Net loss
|
$
|
(17,097
|
)
|
|
$
|
(19,411
|
)
|
Adjustments to reconcile net loss to net cash used in operating activities:
|
|
|
|
||||
Depreciation and amortization
|
67
|
|
|
99
|
|
||
Non-cash lease expense
|
448
|
|
|
—
|
|
||
Stock-based compensation expense
|
1,282
|
|
|
2,415
|
|
||
Amortization of debt issuance costs
|
8
|
|
|
16
|
|
||
Non-cash imputed interest expense related to the sale of future royalties
|
1,417
|
|
|
—
|
|
||
Non-cash interest income on investments
|
(48
|
)
|
|
(128
|
)
|
||
Non-cash interest expense on operating lease liability
|
36
|
|
|
—
|
|
||
Loss on extinguishment of debt
|
3,495
|
|
|
—
|
|
||
Loss on disposal of fixed assets
|
7
|
|
|
—
|
|
||
Changes in operating assets and liabilities:
|
|
|
|
||||
Accounts receivable
|
730
|
|
|
568
|
|
||
Prepaid expenses, and other assets
|
8
|
|
|
213
|
|
||
Accounts payable and accrued and other liabilities
|
(2,579
|
)
|
|
(674
|
)
|
||
Operating lease liability
|
(498
|
)
|
|
—
|
|
||
Total adjustments
|
4,373
|
|
|
2,509
|
|
||
Net cash used in operating activities
|
(12,724
|
)
|
|
(16,902
|
)
|
||
Cash flows from investing activities:
|
|
|
|
||||
Purchase of investments
|
(8,017
|
)
|
|
(20,932
|
)
|
||
Sales and maturities of investments
|
600
|
|
|
33,050
|
|
||
Expenditures for property and equipment
|
(41
|
)
|
|
(77
|
)
|
||
Net cash (used in) provided by investing activities
|
(7,458
|
)
|
|
12,041
|
|
||
Cash flows from financing activities:
|
|
|
|
||||
Proceeds from royalty interest purchase agreement with Oberland Capital Management, LLC
|
65,000
|
|
|
—
|
|
||
Payment of issuance costs on royalty interest purchase agreement
|
(584
|
)
|
|
—
|
|
||
Proceeds from issuance of common stock under the Company's share-based compensation plan.
|
42
|
|
|
112
|
|
||
Payment of liability of future royalties
|
(1,706
|
)
|
|
—
|
|
||
Payment on termination of credit agreement with HealthCare Royalty Partners, III, L.P.
|
(37,162
|
)
|
|
—
|
|
||
Payments on Curis Royalty’s debt
|
(1,825
|
)
|
|
(3,074
|
)
|
||
Net cash provided by/(used in) financing activities
|
23,765
|
|
|
(2,962
|
)
|
||
Net increase (decrease) in cash and cash equivalents
|
3,583
|
|
|
(7,823
|
)
|
||
Cash and cash equivalents, beginning of period
|
23,636
|
|
|
38,288
|
|
||
Cash and cash equivalents, end of period
|
$
|
27,219
|
|
|
$
|
30,465
|
|
Non-cash items:
|
|
|
|
||||
Property and equipment purchases in accounts payable
|
$
|
—
|
|
|
$
|
8
|
|
1.
|
Nature of Business
|
•
|
Fimepinostat is currently being explored in clinical studies in patients with MYC-altered diffuse large B-cell lymphoma (“DLBCL”) and solid tumors and has been granted Orphan Drug Designation and Fast Track Designation for the treatment of DLBCL by the U.S. Food and Drug Administration, (“FDA”) in April 2015 and May 2018, respectively. The Company has begun enrollment in a Phase 1 combination study with venetoclax in DLBCL patients, including patients with translocations in both MYC and the BCL2 gene, also referred to as double-hit lymphoma, or high grade B-cell lymphoma (“HGBL”) . The Company expects to report initial clinical data from this combination study in the second half of 2019.
|
•
|
CA-4948 is being tested in a dose escalating clinical trial in patients with non-Hodgkin lymphomas, including those with myeloid differentiation primary response 88, or MYD88, alterations. The Company is currently planning to initiate a separate Phase 1 trial for acute myeloid leukemia (“AML”) and myelodysplastic syndromes (“MDS”) patients.
|
•
|
CA-170 is currently undergoing testing in a clinical study in patients with mesothelioma. The Company announced in May 2019 that it had completed its target enrollment of these patients and expects to report initial clinical data from this study with respect to mesothelioma in the second half of 2019.
|
2.
|
Basis of Presentation
|
3.
|
Revenue Recognition
|
4.
|
Research and Development Collaborations
|
(a)
|
Genentech
|
1.
|
To grant the license for its Hedgehog antagonist programs and to provide service on both a steering committee and co-development committee. This performance obligation has been satisfied and only contingent royalty revenue remains to be recognized in the future.
|
2.
|
To provide reimbursable research and development services. This performance obligation has been satisfied and no revenue remains to be recognized in the future.
|
(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 VISTA and PDL1.
|
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.
|
In March 2018, the Company exercised its option to license a fourth program, which is an immuno-oncology program.
|
5.
|
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
|
||||||||
As of June 30, 2019:
|
|
|
|
|
|
|
|
||||||||
Cash equivalents:
|
|
|
|
|
|
|
|
||||||||
Money market funds
|
$
|
17,936
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
17,936
|
|
Corporate commercial paper, bonds and notes
|
—
|
|
|
7,835
|
|
|
—
|
|
|
7,835
|
|
||||
Municipal bonds
|
—
|
|
|
120
|
|
|
—
|
|
|
120
|
|
||||
Short-term investments:
|
|
|
|
|
|
|
|
||||||||
Corporate commercial paper, bonds and notes
|
—
|
|
|
8,099
|
|
|
—
|
|
|
8,099
|
|
||||
Total assets at fair value
|
$
|
17,936
|
|
|
$
|
16,054
|
|
|
$
|
—
|
|
|
$
|
33,990
|
|
|
Quoted Prices in
Active Markets
(Level 1)
|
|
Other Observable
Inputs (Level 2)
|
|
Unobservable
Inputs (Level 3)
|
|
Fair Value
|
||||||||
As of December 31, 2018:
|
|
|
|
|
|
|
|
||||||||
Cash equivalents:
|
|
|
|
|
|
|
|
||||||||
Money market funds
|
$
|
18,180
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
18,180
|
|
Corporate commercial paper, stock, bonds and notes
|
—
|
|
|
2,199
|
|
|
—
|
|
|
2,199
|
|
||||
Municipal bonds
|
—
|
|
|
135
|
|
|
—
|
|
|
135
|
|
||||
Short-term investments:
|
|
|
|
|
|
|
|
||||||||
Corporate commercial paper, stock, bonds and notes
|
—
|
|
|
634
|
|
|
—
|
|
|
634
|
|
||||
Total assets at fair value
|
$
|
18,180
|
|
|
$
|
2,968
|
|
|
$
|
—
|
|
|
$
|
21,148
|
|
6.
|
Investments
|
|
Amortized
Cost
|
|
Unrealized
Gain
|
|
Unrealized
Loss
|
|
Fair Value
|
||||||||
Corporate commercial paper, bonds and notes – short-term
|
$
|
8,099
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
8,099
|
|
Total investments
|
$
|
8,099
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
8,099
|
|
|
Amortized
Cost
|
|
Unrealized
Gain
|
|
Unrealized
Loss
|
|
Fair Value
|
||||||||
Corporate bonds and notes – short-term
|
$
|
634
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
634
|
|
Total investments
|
$
|
634
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
634
|
|
7.
|
Debt
|
(a)
|
HealthCare Royalty Partners III
|
(b)
|
Debt Payments to HealthCare Royalty Partners III
|
8.
|
Accrued Liabilities
|
|
June 30,
2019 |
|
December 31,
2018 |
||||
Accrued compensation
|
$
|
1,110
|
|
|
$
|
2,774
|
|
Professional fees
|
248
|
|
|
233
|
|
||
Accrued interest on debt (Note 7)
|
—
|
|
|
165
|
|
||
Other
|
215
|
|
|
285
|
|
||
Total
|
$
|
1,573
|
|
|
$
|
3,457
|
|
9.
|
Liability Related to the Sale of Future Royalties
|
Liability related to the sale of future royalties at March 22, 2019
|
$
|
65,000
|
|
Capitalized Issuance Costs
|
(584
|
)
|
|
Non-cash imputed interest expense recognized for the six months ended June 30, 2019
|
1,417
|
|
|
Less: Payment to Oberland Capital, LLC
|
(1,706
|
)
|
|
Carrying value of liability related to the sale of future royalties at June 30, 2019
|
$
|
64,127
|
|
10.
|
Lease
|
Year Ending December 31,
|
|
||
2019
|
$
|
503
|
|
2020
|
168
|
|
|
Total minimum payments
|
671
|
|
|
Less: Present value adjustments
|
(25
|
)
|
|
Total operating lease liability
|
$
|
646
|
|
Year Ending December 31,
|
|
||
2019
|
$
|
1,002
|
|
2020
|
168
|
|
|
Total minimum payments
|
$
|
1,170
|
|
11.
|
Stock Plans and Stock Based Compensation
|
|
Six Months Ended
June 30, |
||
|
2019
|
|
2018
|
Expected term (years)
–
employees and officers
|
5.5
|
|
5.5
|
Expected term (years) – directors
|
5.5
|
|
6.25
|
Risk-free interest rate
|
2.3-2.6%
|
|
2.5-2.8%
|
Expected Volatility
|
75.8-78.7%
|
|
66.0-72.0%
|
Expected Dividends
|
None
|
|
None
|
|
Number of
Shares
|
|
Weighted
Average
Exercise
Price per
Share
|
|
Weighted
Average
Remaining Contractual Life
|
|
Aggregate Intrinsic Value
|
|||||
Outstanding, December 31, 2018
|
3,714,394
|
|
|
$
|
7.68
|
|
|
|
|
|
||
Granted
|
3,512,865
|
|
|
1.20
|
|
|
|
|
|
|||
Exercised
|
—
|
|
|
—
|
|
|
|
|
|
|||
Canceled
|
(1,286,446
|
)
|
|
7.76
|
|
|
|
|
|
|||
Outstanding, June 30, 2019
|
5,940,813
|
|
|
$
|
3.83
|
|
|
8.42
|
|
$
|
2,279
|
|
Exercisable at June 30, 2019
|
1,368,172
|
|
|
$
|
10.41
|
|
|
5.37
|
|
$
|
1
|
|
Vested and unvested expected to vest at June 30, 2019
|
5,118,711
|
|
|
$
|
4.21
|
|
|
8.26
|
|
$
|
1,844
|
|
|
Number of
Shares
|
|
Weighted
Average
Grant Date Fair Value
|
|||
Outstanding, December 31, 2018
|
226,250
|
|
|
$
|
3.45
|
|
Awarded
|
—
|
|
|
—
|
|
|
Vested
|
(195,313
|
)
|
|
3.45
|
|
|
Forfeited
|
—
|
|
|
—
|
|
|
Outstanding, June 30, 2019
|
30,937
|
|
|
$
|
3.45
|
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Research and development expenses
|
$
|
123
|
|
|
$
|
436
|
|
|
$
|
299
|
|
|
$
|
849
|
|
General and administrative expenses
|
508
|
|
|
753
|
|
|
983
|
|
|
1,566
|
|
||||
Total stock-based compensation expense
|
$
|
631
|
|
|
$
|
1,189
|
|
|
$
|
1,282
|
|
|
$
|
2,415
|
|
12.
|
Accumulated Other Comprehensive Loss
|
|
Unrealized Losses
and Gain on
Securities Available-for-Sale
|
||
Balance, as of December 31, 2017
|
$
|
(2
|
)
|
Unrealized gain on marketable securities
|
1
|
|
|
Net current period other comprehensive income
|
1
|
|
|
Balance, as of June 30, 2018
|
$
|
(1
|
)
|
13.
|
Common Stock
|
(a)
|
Reverse Stock Split
|
(b)
|
2015 Sales Agreement with Cowen and Company, LLC
|
(c)
|
Treasury Stock Retirement
|
(d)
|
2018 Charter Amendment
|
(e)
|
2019 Charter Amendment
|
14.
|
Loss Per Common Share
|
15.
|
Related Party Transactions
|
(a)
|
Agreement with Head of Research and Development - Robert E. Martell, M.D., Ph.D.
|
(b)
|
Agreement with David Tuck, M.D.
|
16.
|
New Accounting Pronouncements
|
Item 2.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
•
|
Fimepinostat is currently being explored in clinical studies in patients with MYC-altered diffuse large B-cell lymphoma (“DLBCL”) and solid tumors and has been granted Orphan Drug Designation and Fast Track Designation for the treatment of DLBCL by the U.S. Food and Drug Administration, (“FDA”) in April 2015 and May 2018, respectively. We have begun enrollment in a Phase 1 combination study with venetoclax in DLBCL patients, including patients with translocations in both MYC and the BCL2 gene, also referred to as double-hit lymphoma, or high grade B-cell lymphoma (“HGBL”). We expect to report initial clinical data from this combination study in the second half of 2019.
|
•
|
CA-4948 is being tested in a dose escalating clinical trial in patients with non-Hodgkin lymphomas, including those with myeloid differentiation primary response 88, or MYD88, alterations. We are currently planning to initiate a separate Phase 1 trial for acute myeloid leukemia (“AML”) and myelodysplastic syndromes (“MDS”) patients.
|
•
|
CA-170 is currently undergoing testing in a clinical study in patients with mesothelioma. We announced in May 2019 that we had completed our target enrollment of these patients and we expect to report initial clinical data from this study with respect to mesothelioma in the second half of 2019.
|
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 VISTA and PDL1.
|
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.
|
In March 2018, we exercised our option to license a fourth program, which is an immuno-oncology program.
|
•
|
our ability to successfully plan, finance and complete current and planned clinical trials for fimepinostat, CA-4948 and CA-170 as well as for such clinical trials to generate favorable data;
|
•
|
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;
|
•
|
Genentech and Roche’s ability to continue to successfully commercialize Erivedge in advanced BCC in the United States and in other global territories; and
|
•
|
our ability to raise the substantial additional financing required to fund our operations through our at-the-market sale facility with Cowen and Company, LLC (“Cowen”) or other potential financing.
|
•
|
salaries and related expenses for personnel, including stock-based compensation expense;
|
•
|
costs of conducting clinical trials, including amounts paid to clinical centers, clinical research organizations and consultants, among others;
|
•
|
other outside service costs, including costs of contract manufacturing;
|
•
|
sublicense payments;
|
•
|
the costs of supplies and reagents;
|
•
|
occupancy and depreciation charges;
|
•
|
certain payments that we make to Aurigene under our collaboration agreement, including, for example, option exercise fees and milestone payments; and
|
•
|
payments that we are obligated to make to certain third party university licensors upon our receipt of payments from Genentech related to the achievement of clinical development and regulatory objectives under our collaboration agreement.
|
•
|
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.
|
|
For the Three Months Ended
June 30, |
|
Percentage
Increase/
(Decrease)
|
|
For the Six Months Ended
June 30, |
|
Percentage
Increase/
(Decrease)
|
||||||||||||||
|
2019
|
|
2018
|
|
|
2019
|
|
2018
|
|
||||||||||||
|
(in thousands)
|
|
|
|
(in thousands)
|
|
|
||||||||||||||
Revenues
|
$
|
2,094
|
|
|
$
|
2,358
|
|
|
(11
|
)%
|
|
$
|
3,861
|
|
|
$
|
4,826
|
|
|
(20
|
)%
|
Costs and expenses:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Cost of royalty revenues
|
89
|
|
|
134
|
|
|
(34
|
)%
|
|
197
|
|
|
263
|
|
|
(25
|
)%
|
||||
Research and development
|
5,620
|
|
|
6,451
|
|
|
(13
|
)%
|
|
9,694
|
|
|
14,717
|
|
|
(34
|
)%
|
||||
General and administrative
|
2,526
|
|
|
3,633
|
|
|
(30
|
)%
|
|
5,669
|
|
|
7,614
|
|
|
(26
|
)%
|
||||
Other expense, net
|
1,072
|
|
|
804
|
|
|
33
|
%
|
|
5,398
|
|
|
1,643
|
|
|
>100 %
|
|
||||
Net loss
|
$
|
(7,213
|
)
|
|
$
|
(8,664
|
)
|
|
(17
|
)%
|
|
$
|
(17,097
|
)
|
|
$
|
(19,411
|
)
|
|
(12
|
)%
|
|
For the Three Months Ended
June 30, |
|
Percentage
Increase/
(Decrease)
|
|
For the Six Months Ended
June 30, |
|
Percentage
Increase/
(Decrease)
|
||||||||||||||
|
2019
|
|
2018
|
|
|
2019
|
|
2018
|
|
||||||||||||
|
(in thousands)
|
|
|
|
(in thousands)
|
|
|
||||||||||||||
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Royalties
|
$
|
2,142
|
|
|
$
|
2,394
|
|
|
(11
|
)%
|
|
$
|
4,279
|
|
|
$
|
4,868
|
|
|
(12
|
)%
|
Contra revenue
|
(48
|
)
|
|
(36
|
)
|
|
(33
|
)%
|
|
(418
|
)
|
|
(42
|
)
|
|
<(100)%
|
|
||||
Total revenues
|
$
|
2,094
|
|
|
$
|
2,358
|
|
|
(11
|
)%
|
|
$
|
3,861
|
|
|
$
|
4,826
|
|
|
(20
|
)%
|
|
For the Three Months Ended
June 30, |
|
Percentage
Increase/
(Decrease)
|
|
For the Six Months Ended
June 30, |
|
Percentage
Increase/
(Decrease)
|
||||||||||||||
|
2019
|
|
2018
|
|
|
2019
|
|
2018
|
|
||||||||||||
|
(in thousands)
|
|
|
|
(in thousands)
|
|
|
||||||||||||||
Direct research and development expenses
|
$
|
3,578
|
|
|
$
|
2,673
|
|
|
34
|
%
|
|
$
|
5,759
|
|
|
$
|
6,844
|
|
|
(16
|
)%
|
Employee-related expenses
|
1,465
|
|
|
3,238
|
|
|
(55
|
)%
|
|
3,067
|
|
|
6,711
|
|
|
(54
|
)%
|
||||
Facilities, depreciation and other expenses
|
577
|
|
|
540
|
|
|
7
|
%
|
|
868
|
|
|
1,162
|
|
|
(25
|
)%
|
||||
Total research and development expenses
|
$
|
5,620
|
|
|
$
|
6,451
|
|
|
(13
|
)%
|
|
$
|
9,694
|
|
|
$
|
14,717
|
|
|
(34
|
)%
|
|
For the Three Months Ended
June 30, |
|
Percentage
Increase/
(Decrease)
|
|
For the Six Months Ended
June 30, |
|
Percentage
Increase/
(Decrease)
|
||||||||||||||
|
2019
|
|
2018
|
|
|
2019
|
|
2018
|
|
||||||||||||
|
(in thousands)
|
|
|
|
(in thousands)
|
|
|
||||||||||||||
Personnel
|
$
|
988
|
|
|
$
|
1,166
|
|
|
(15
|
)%
|
|
$
|
2,023
|
|
|
$
|
2,492
|
|
|
(19
|
)%
|
Legal services
|
389
|
|
|
719
|
|
|
(46
|
)%
|
|
976
|
|
|
1,460
|
|
|
(33
|
)%
|
||||
Professional and consulting services
|
405
|
|
|
566
|
|
|
(28
|
)%
|
|
858
|
|
|
1,158
|
|
|
(26
|
)%
|
||||
Insurance costs
|
106
|
|
|
98
|
|
|
8
|
%
|
|
210
|
|
|
202
|
|
|
4
|
%
|
||||
Stock-based compensation
|
508
|
|
|
753
|
|
|
(33
|
)%
|
|
983
|
|
|
1,566
|
|
|
(37
|
)%
|
||||
Other general and administrative expenses
|
130
|
|
|
331
|
|
|
(61
|
)%
|
|
619
|
|
|
736
|
|
|
(16
|
)%
|
||||
Total general and administrative expenses
|
$
|
2,526
|
|
|
$
|
3,633
|
|
|
(30
|
)%
|
|
$
|
5,669
|
|
|
$
|
7,614
|
|
|
(26
|
)%
|
•
|
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, including 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.
|
Item 3.
|
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|
Item 4.
|
CONTROLS AND PROCEDURES
|
Item 1A.
|
RISK FACTORS
|
•
|
continue to develop and conduct clinical trials with respect to drug candidates;
|
•
|
seek to identify and develop additional drug candidates;
|
•
|
acquire or in-license other drug candidates or technologies;
|
•
|
seek regulatory and marketing approvals for our drug candidates that successfully complete clinical trials, if any;
|
•
|
establish sales, marketing, distribution and other commercial infrastructure in the future to commercialize various drugs for which we may obtain marketing approval, if any;
|
•
|
require the manufacture of larger quantities of drug candidates for clinical development and, potentially, commercialization;
|
•
|
maintain, expand, and protect our intellectual property portfolio;
|
•
|
hire and retain additional personnel, such as clinical, quality control and scientific personnel; and
|
•
|
add equipment and physical infrastructure as may be required to support our research and development programs.
|
•
|
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, including 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.
|
•
|
any royalty and royalty-related payments to be remitted into a certain Curis Royalty designated account controlled by the Agent pursuant to a control agreement, referred to as the royalty account, into which all royalty and royalty-related payments must be paid by Curis or Curis Royalty are not so remitted in accordance with the Oberland Purchase Agreement;
|
•
|
any representation or warranty made by Curis or Curis Royalty in the Oberland Purchase Agreement or any other transaction document proves to be incorrect or misleading in any material respect when made;
|
•
|
a default by Curis or Curis Royalty in the performance of affirmative and negative covenants set forth in the Oberland Purchase Agreement or any other transaction document;
|
•
|
a default by Curis in the performance or observance of its indemnity obligations under the Oberland Purchase Agreement;
|
•
|
the failure by Genentech to pay material amounts owed under the Genentech collaboration agreement because of an actual breach or default by Curis under the Genentech collaboration agreement;
|
•
|
the failure of the security agreement to create a valid and perfected first priority security interest in any of the collateral;
|
•
|
a material breach or default by Curis under our agreement with Curis Royalty pursuant to which we transferred our rights to the royalty revenues under the Genentech collaboration agreement to Curis Royalty;
|
•
|
the voluntary or involuntary commencement of bankruptcy proceedings by either Curis or Curis Royalty and other insolvency related events;
|
•
|
any materially adverse effect on the binding nature of any of the Oberland Purchase Agreement, Security Agreement, Pledge Agreement or other transaction documents, the Genentech collaboration agreement or our agreement with Curis Royalty;
|
•
|
any person shall be designated as an independent director of Curis Royalty other than in accordance with Curis Royalty’s limited liability company operating agreement; or
|
•
|
Curis shall at any time cease to own, of record and beneficially, 100% of the equity interests in Curis Royalty.
|
•
|
payments we may be required to make to collaborators such as Aurigene to exercise license rights and satisfy milestones and royalty obligations;
|
•
|
the status of, and level of expenses incurred in connection with, our programs, including development costs relating to fimepinostat, CA-4948 and CA-170, as well as funding programs that we have licensed or may in the future license and develop under our collaboration with Aurigene;
|
•
|
fluctuations in sales of Erivedge and related royalty and milestone 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 Pharmaceutical;
|
•
|
any intellectual property infringement lawsuit or other litigation in which we may become involved;
|
•
|
the implementation of restructuring and cost-savings strategies;
|
•
|
the occurrence of an event of default under the Oberland Purchase Agreement;
|
•
|
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
|
•
|
compliance with regulatory requirements.
|
•
|
successful enrollment in, and completion of, ongoing and future clinical trials of fimepinostat, CA-4948, CA-170 and other compounds that we may develop under our collaboration agreement with Aurigene;
|
•
|
Aurigene’s ability to successfully discover and preclinically develop other drug candidates under the collaboration agreement;
|
•
|
a safety, tolerability and efficacy profile that is satisfactory to the FDA or any comparable foreign regulatory authority for marketing approval;
|
•
|
receipt of requisite marketing approvals from applicable regulatory authorities;
|
•
|
the extent of any required post marketing approval commitments to applicable regulatory authorities;
|
•
|
establishment of supply arrangements with third party raw materials suppliers and manufacturers;
|
•
|
establishment of arrangements with third party manufacturers to obtain finished drug products that is appropriately packaged for sale;
|
•
|
adequate ongoing availability of raw materials and drug products for clinical development and any commercial sales;
|
•
|
obtaining and maintaining patent, trade secret protection and regulatory exclusivity, both in the U.S. and internationally;
|
•
|
protection of the rights in our intellectual property portfolio;
|
•
|
successful launch of commercial sales following any marketing approval;
|
•
|
a continued acceptable safety profile following any marketing approval;
|
•
|
commercial acceptance by patients, the medical community and third party payors; and
|
•
|
our ability to compete with other therapies.
|
•
|
incur additional unplanned costs;
|
•
|
be delayed in obtaining marketing approval for our drug candidates;
|
•
|
not obtain marketing approval at all;
|
•
|
obtain approval for indications or patient populations that are not as broad as intended or desired;
|
•
|
obtain approval with labeling that includes significant use or distribution restrictions or significant safety warnings, including boxed warnings;
|
•
|
be subject to additional post-marketing testing or other requirements; or
|
•
|
be required to remove the drug from the market after obtaining marketing approval.
|
•
|
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;
|
•
|
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;
|
•
|
clinical trials of our drug candidates may produce unfavorable or inconclusive results, including with respect to the safety, tolerability, efficacy, or pharmacodynamic and pharmacokinetic profile of the drug candidate;
|
•
|
we, or any collaborators, may decide, or regulators may require us or them, to conduct additional clinical trials or abandon drug development programs;
|
•
|
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;
|
•
|
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;
|
•
|
the cost of planned clinical trials of our drug candidates may be greater than we anticipate;
|
•
|
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;
|
•
|
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;
|
•
|
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 such as an unfavorable pharmacodynamic or pharmacokinetic profile;
|
•
|
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
|
•
|
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;
|
•
|
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;
|
•
|
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
|
•
|
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.
|
•
|
the size and nature of the patient population;
|
•
|
the severity of the disease under investigation;
|
•
|
the availability of approved therapeutics for the relevant disease;
|
•
|
the proximity of patients to clinical sites;
|
•
|
the eligibility criteria and design for the trial;
|
•
|
efforts to facilitate timely enrollment;
|
•
|
competing clinical trials; and
|
•
|
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.
|
•
|
regulatory authorities may withdraw their approval of the drug or seize the drug;
|
•
|
we, or any future collaborators, may be required to recall the drug, change the way the drug is administered or conduct additional clinical trials;
|
•
|
additional restrictions may be imposed on the marketing of, or the manufacturing processes for, the particular drug;
|
•
|
we may be subject to fines, injunctions or the imposition of civil or criminal penalties;
|
•
|
regulatory authorities may require the addition of labeling statements, such as a “black box” warning or a contraindication;
|
•
|
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;
|
•
|
we, or any future collaborators, could be sued and held liable for harm caused to patients;
|
•
|
the drug may become less competitive; and
|
•
|
our reputation may suffer.
|
•
|
the efficacy and safety of the drug;
|
•
|
the potential advantages of the drug compared to competitive therapies;
|
•
|
the prevalence and severity of any side effects;
|
•
|
whether the drug is designated under physician treatment guidelines as a first-, second- or third-line therapy;
|
•
|
our ability, or the ability of any future collaborators, to offer the drug for sale at competitive prices;
|
•
|
the drug’s convenience and ease of administration compared to alternative treatments;
|
•
|
the willingness of the target patient population to try, and of physicians to prescribe, the drug and patient adherence to the drug’s dosing regimen once prescribed;
|
•
|
limitations or warnings, including distribution or use restrictions, contained in the drug’s approved labeling;
|
•
|
the strength of sales, marketing and distribution support;
|
•
|
changes in the standard of care for the targeted indications for the drug; and
|
•
|
availability and amount of coverage and reimbursement from government payors, managed care plans and other third party payors.
|
•
|
we may not be able to attract and build a significant and skilled marketing staff or sales force;
|
•
|
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
|
•
|
our direct sales and marketing efforts may not be successful.
|
•
|
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.
|
•
|
the composition of our board of directors;
|
•
|
the adoption of amendments to our certificate of incorporation and bylaws;
|
•
|
the approval of mergers or sales of substantially all of our assets;
|
•
|
our capital structure and financing; and
|
•
|
the approval of contracts between us and these stockholders or their affiliates, which could involve conflicts of interest.
|
•
|
delaying, deferring or preventing a change in control of our company and making some transactions more difficult or impossible without the support of these stockholders, even if such transactions are beneficial to other stockholders;
|
•
|
impeding a merger, consolidation, takeover or other business combination involving our company; or
|
•
|
entrenching our management or the board of directors.
|
Item 6.
|
Exhibits
|
Exhibit
Number
|
Description
|
|
|
3.1
|
|
10.1
|
|
31.1
|
|
31.2
|
|
32.1
|
|
32.2
|
|
|
|
101.INS
|
XBRL Instance Document
|
|
|
101.SCH
|
XBRL Taxonomy Extension Schema Document
|
|
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101.CAL
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XBRL Taxonomy Extension Calculation Linkbase Document
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101.DEF
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XBRL Taxonomy Extension Definition Linkbase Document
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101.LAB
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XBRL Taxonomy Extension Label Linkbase Document
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101.PRE
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XBRL Taxonomy Extension Presentation Linkbase Document
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CURIS, INC.
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Dated:
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August 9, 2019
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By:
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/S/ JAMES E. DENTZER
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James E. Dentzer
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President and Chief Executive Officer
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(Principal Financial Officer)
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(a)
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Common Stock
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STATE OF DELAWARE
SECRETARY OF STATE
DIVISION OF CORPORATIONS
FILED 01:30 PM 06/19/2000
001309790 - 3152050
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(b)
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Preferred Stock
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(a)
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Amendment of By-Laws
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(b)
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Election of Directors
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(c)
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Location of Corporate Books
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CURIS, INC.
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||
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By:
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/s/ Doros Platika
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Doros Platika
President and Chief Executive Officer
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By:
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/s/ Dan Passeri
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Dan Passeri
Title: Chief Executive Officer
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/s/ Ali Fattaey
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By:
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Ali Fattaey, Ph.D.
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Title:
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President and Chief Executive Officer
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/s/ Ali Fattaey
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By:
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Ali Fattaey, Ph.D.
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Title:
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President and Chief Executive Officer
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/s/ James E. Dentzer
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By:
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James E. Dentzer
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Title:
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President and Chief Executive Officer
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1.
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I have reviewed this Quarterly Report on Form 10-Q of Curis, Inc.;
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2.
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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;
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3.
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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;
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4.
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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:
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a)
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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;
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b)
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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;
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c)
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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
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d)
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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
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5.
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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):
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a)
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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
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b)
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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.
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Date:
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August 9, 2019
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/
S
/ JAMES E. DENTZER
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James E. Dentzer
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President and Chief Executive Officer
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(Principal Executive Officer)
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1.
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I have reviewed this Quarterly Report on Form 10-Q of Curis, Inc.;
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2.
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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;
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3.
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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;
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4.
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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:
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a)
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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;
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b)
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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;
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c)
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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
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d)
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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
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5.
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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):
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a)
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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
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b)
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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.
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Date:
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August 9, 2019
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/
S
/ JAMES E. DENTZER
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James E. Dentzer
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President and Chief Executive Officer
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(Principal Financial Officer)
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Date:
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August 9, 2019
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/
S
/ JAMES E. DENTZER
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James E. Dentzer
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President and Chief Executive Officer
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(Principal Executive Officer)
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Date:
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August 9, 2019
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/
S
/ JAMES E. DENTZER
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James E. Dentzer
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President and Chief Executive Officer
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(Principal Financial Officer)
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