Market Snapshot
  • U.S.
  • Europe
  • Asia
Ticker Volume Price Price Delta
DJIA 16,365.67 103.11 0.63%
S&P 500 1,855.74 12.76 0.69%
NASDAQ 4,058.52 24.36 0.60%
Ticker Volume Price Price Delta
STOXX 50 3,139.26 47.74 1.54%
FTSE 100 6,584.17 42.56 0.65%
DAX 9,317.82 144.11 1.57%
Ticker Volume Price Price Delta
NIKKEI 14,417.68 420.87 3.01%
TOPIX 1,166.55 30.46 2.68%
HANG SENG 22,696.01 24.75 0.11%

Curis Announces $30 Million Secured Debt Financing to Support Development of Proprietary Pipeline



Curis Announces $30 Million Secured Debt Financing to Support Development of
Proprietary Pipeline

- Company to Advance Development of Novel Oncology Therapeutics Including IAP
                             Inhibitor GDC-0917 -

                  - Conference Call Today at 8:30 a.m. EST -

LEXINGTON, Mass., Nov. 28, 2012 (GLOBE NEWSWIRE) -- Curis, Inc. (Nasdaq:CRIS),
a drug development company seeking to develop next generation targeted small
molecule drug candidates for cancer treatment, today announced that, subject
to the occurrence of certain closing conditions, it will enter into a $30
million debt transaction secured with certain future Erivedge® royalties, with
an investment fund managed by Pharmakon Advisors. Erivedge is the first and
only FDA-approved medicine for people with advanced basal cell carcinoma and
is developed and marketed by Genentech, a member of the Roche Group.

"This important transaction provides Curis with non-dilutive capital for use
in our proprietary development programs, including our in-licensing and
further clinical development of small molecule IAP inhibitor GDC-0917, now
designated CUDC-427, which we acquired from Genentech and also announced this
morning," said Dan Passeri, President and Chief Executive Officer of Curis,
Inc. "This promising compound adds to the depth and quality of our pipeline
and access to this non-dilutive capital bolsters our capacity to fully exploit
our proprietary programs."

As part of the transaction, Curis formed a wholly-owned subsidiary called
Curis Royalty LLC ("Curis Royalty"), and Curis Royalty entered into a credit
agreement with BioPharma Secured Debt Fund II Sub, S.àr.l, ("BioPharma-II"),
whereby Curis Royalty borrowed $30 million at an annual interest rate of
12.25% (the "loan"). Under the terms of the transaction, the loan is expected
to close within 10 business days; concurrently therewith, Curis will transfer
to Curis Royalty the right to receive royalty and certain other
royalty-related payments from the commercial sales of Erivedge under Curis'
collaboration agreement with Genentech.

The royalty payments that Curis Royalty will be entitled to receive under the
collaboration agreement with Genentech will be the source of funds to repay
principal of and interest on the loan. The final maturity date of the loan
will be the earlier of the date when principal is paid in full and the
termination of Curis Royalty's right to receive royalties under the
collaboration agreement with Genentech. The loan is secured by a security
interest granted by Curis Royalty in its rights to receive royalty and other
royalty-related payments under the collaboration agreement with Genentech. The
loan constitutes an obligation of Curis Royalty, and is intended to be
non-recourse to Curis.

Under the terms of the loan, quarterly royalty payments from Genentech will
first be applied to cover Curis' royalty obligations to academic institutions
and Curis Royalty's ongoing expenses. Remaining amounts, subject to caps of
$1.0 million per quarter in 2013, $2.0 million per quarter in 2014 and $3.0
million per quarter in 2015, will be applied to pay interest and principal on
the loan. Curis Royalty will be entitled to receive and distribute to Curis
the remaining amounts above the caps, if any. Curis Royalty remains entitled
to receive any royalty payments related to sales of Erivedge following
repayment of the loan.

"Importantly, based on our current expectations for Erivedge royalty revenue,
we believe that the loan could be repaid in approximately four years and that
the capped repayment structure could allow for Curis to receive royalty
revenues in excess of these caps, if any, during the repayment term," said
Mike Gray, Curis' Chief Financial Officer. "Following the repayment of this
loan, we retain all rights to collect royalties on Erivedge net sales, leaving
Curis with what we believe will be significant future upside potential on
Erivedge royalty revenues. In the U.S., for example the core intellectual
property on Erivedge extends to November 2028."

Mr. Gray continued, "In addition, any milestone payments that we receive from
Genentech are excluded from this transaction and therefore would provide Curis
with additional capital if achieved. For example, we have the right to receive
milestone payments for regulatory approvals of Erivedge in Europe and
Australia, which we anticipate could occur in the first half of 2013."

"We are pleased to be partnering with Curis in this transaction," said Pedro
Gonzalez de Cosio, Managing Member of Pharmakon Advisors. "We believe Erivedge
is a breakthrough therapy for patients with advanced basal cell carcinoma and
will continue in the future to help many patients who suffer from this
disease."

Conference Call Information

Daniel Passeri, President and Chief Executive Officer of Curis, will host a
conference call today, November 28, 2012, at 8:30 a.m. EST, to review the
license and financing transactions, provide an update on the Company's
development programs and review corporate strategy.

To access the live conference call, please dial (877) 868-1829 from the U.S.
or (253) 237-1135 from other locations, shortly before 8:30 a.m. EST. The
conference ID number is 73717844. The conference call can also be accessed on
the Curis website at www.curis.com in the Investors section. A replay will be
available approximately two hours after the completion of the call through
12:00 p.m. EST, Saturday, December 1, 2012. To access the replay, please dial
(855) 859-2056 from the United States or (404) 537-3406 from other locations
and reference conference ID number 73717844.

About Basal Cell Carcinoma (BCC) and the Hedgehog Pathway

Basal cell carcinoma is the most common type of skin cancer in Europe,
Australia and the United States. The disease is generally considered curable
if the cancer is restricted to a small area of the skin. In advanced BCC, if
the disease is left untreated or recurs in the same location after surgery or
radiotherapy, it may advance further into surrounding areas such as sensory
organs (ears, nose and eyes), bone or other tissues. Depending on the location
of the lesion, some cases of advanced BCC can be disfiguring, and treatment
with surgery or radiation can lead to the loss of sensory organs and their
functions such as eyesight or hearing. Abnormal Hedgehog signaling is
implicated in more than 90 percent of BCC cases.

About Erivedge and the Hedgehog Pathway

Erivedge is designed to selectively inhibit signaling in the Hedgehog pathway
by binding to a protein called Smoothened. The Hedgehog signaling pathway
plays an important role in regulating proper growth and development in the
early stages of life and becomes less active in adults.

Genentech is also evaluating Erivedge in a Phase II trial in patients with
operable forms of BCC, which opened for patient enrollment in October 2010.
Furthermore, Erivedge is being evaluated by third-party investigators in a
number of other cancers and in people with BCC who have Gorlin syndrome, a
condition that affects many areas of the body and increases the risk of
developing BCC. For more information, visit http://www.clinicaltrials.gov.

About the Curis-Genentech Collaboration

Under the ongoing collaboration agreement between Genentech, a wholly owned
member of the Roche Group, and Curis, Erivedge (vismodegib, GDC-0449) was
discovered by Genentech and was jointly validated by the parties through a
series of preclinical studies. Pursuant to this collaboration, Genentech and
Roche are responsible for clinical development, and Genentech (U.S.), Roche
(Ex-U.S. excluding Japan) and Chugai Pharmaceuticals (Japan) are responsible
for commercialization of Erivedge. Curis is eligible to receive cash payments
upon the successful achievement of specified clinical development and
regulatory approval milestones, as well as royalties assuming successful
commercialization of Erivedge by Genentech and its sublicensees, which include
Roche and Chugai.

About Curis, Inc.

Curis is a drug development company that is committed to leveraging its
innovative signaling pathway drug technologies to seek to create new targeted
small molecule drug candidates for cancer. Curis is building upon its previous
experiences in targeting signaling pathways, including in the Hedgehog
pathway, in its effort to develop proprietary targeted cancer programs. For
more information, visit Curis' website at www.curis.com.

The Curis, Inc. logo is available at
http://www.globenewswire.com/newsroom/prs/?pkgid=11347

About Pharmakon Advisors

Funds managed by Pharmakon Advisors, including BioPharma-II, invest in debt
securities and capped royalties secured by revenues from life sciences
products. Pharmakon Advisors' management team has a long and successful track
record of structuring securitized financings and making direct investments in
royalty interests on life sciences products. Pharmakon manages approximately
$625 million and has structured investments secured by royalty payments on
thirteen different pharma, biotech and medical device products.

Curis Cautionary Statement: This press release contains forward-looking
statements within the meaning of the Private Securities Litigation Reform Act
of 1995, including without limitation statements regarding Curis' expectations
regarding the economic and other benefits of the royalty financing
transaction; Curis expectations about its potential ability to receive royalty
payments both during and after the repayment term loan;  the expected
repayment period for the loan; and Curis' expectations regarding the timing of
further regulatory approvals for Erivedge and the potential for it to receive
related milestones. Forward-looking statements used in this press release may
contain the words "believes", "expects", "anticipates", "plans", "seeks",
"estimates", "assumes", "will", "may," "could," "would" or similar
expressions. These forward-looking statements are not guarantees of future
performance and involve risks, uncertainties, assumptions and other important
factors that may cause actual results to be materially different from those
indicated by such forward-looking statements. For example, if Genentech's
sales of Erivedge are lower than anticipated, the time period for repayment of
the Loan will be extended. There are also certain events of default in which
the loan repayment could be accelerated, including actions by Curis' that
could lead to Genentech's termination of the collaboration agreement between
Curis and Genentech. Genentech and Roche may not ultimately demonstrate to the
satisfaction of the EMA, the TGA or regulatory authorities in other
territories, the safety and efficacy profile of Erivedge in the treatment of
advanced BCC, in which case Erivedge may not be approved for sales and
marketing for the treatment of such indication in the respective territory.
Genentech and Roche may experience delays or failures in the manufacture of
Erivedge. Erivedge's benefit/risk profile may not be widely accepted by the
medical community or third-party payors for the treatment of advanced BCC.
Regulatory and administrative governmental authorities may determine to delay
or restrict Genentech's and/or Roche's ability to continue to develop or
commercialize Erivedge. Competing drugs may be developed that are superior to
Erivedge. Curis may not achieve meaningful amounts of royalty revenue from
sales of Erivedge and may not achieve milestone payments from existing or new
collaborators. Curis and its collaborators may experience adverse results,
delays and/or failures in their drug development programs. Preclinical testing
and clinical studies of Curis' other programs in development may be
unsuccessful and may never achieve the requisite regulatory approval needed
for commercialization. Curis will require substantial additional capital to
fund the research and development of its programs, and the proceeds of its
royalty financing transaction may not be sufficient to fund its near-term
capital requirements for advancing these programs. Curis may not obtain or
maintain necessary patent protection for its programs and could become
involved in expensive and time consuming patent litigation and interference
proceedings. Curis faces substantial competition from other companies
developing cancer therapeutics. Unstable market and economic conditions may
adversely affect Curis' financial conditions and its ability to access capital
to fund the growth of its business. Curis may experience unplanned cash
requirements, and may not receive additional anticipated payments under its
collaborations. Curis also faces other important risks relating to its
business, operations, financial condition and future prospects generally, that
are discussed in its Quarterly Report on Form 10-Q for the quarter ended
September 30, 2012 and other filings that it periodically makes with the
Securities and Exchange Commission. 

In addition, any forward-looking statements represent the views of Curis only
as of today and should not be relied upon as representing Curis' views as of
any subsequent date. Curis disclaims any intention or obligation to update any
of the forward-looking statements after the date of this press release whether
as a result of new information, future events or otherwise.

CONTACT: Michael P. Gray
         Chief Financial and Chief Operating Officer
         Curis, Inc.
         617-503-6632
         mgray@curis.com

Curis, Inc. Logo
Sponsored Links
Advertisement
Advertisements
Sponsored Links
Advertisement