2018 Q3 Form 10-Q Financial Statement

#000110820518000013 Filed on August 02, 2018

View on sec.gov

Income Statement

Concept 2018 Q3 2018 Q2 2017 Q2
Revenue $2.847M $2.358M $2.061M
YoY Change 16.49% 14.41% 22.68%
Cost Of Revenue $150.0K $130.0K $100.0K
YoY Change 25.0% 30.0% 0.0%
Gross Profit $2.690M $2.220M $1.970M
YoY Change 15.95% 12.69% 23.9%
Gross Profit Margin 94.49% 94.15% 95.58%
Selling, General & Admin $4.130M $3.630M $3.820M
YoY Change 21.11% -4.97% 11.05%
% of Gross Profit 153.53% 163.51% 193.91%
Research & Development $4.983M $6.451M $11.26M
YoY Change -62.76% -42.68% 27.58%
% of Gross Profit 185.24% 290.59% 571.32%
Depreciation & Amortization $40.00K $50.00K $50.00K
YoY Change -42.86% 0.0% -16.67%
% of Gross Profit 1.49% 2.25% 2.54%
Operating Expenses $4.983M $6.451M $11.26M
YoY Change -62.76% -42.68% 27.58%
Operating Profit -$6.417M -$7.860M -$13.11M
YoY Change -55.66% -40.04% 22.74%
Interest Expense $972.0K $993.0K $1.119M
YoY Change -12.35% -11.26% 53.5%
% of Operating Profit
Other Income/Expense, Net -$806.0K -$804.0K -$981.0K
YoY Change -18.26% -18.04% 60.82%
Pretax Income -$7.220M -$8.660M -$14.09M
YoY Change -53.3% -38.54% 24.8%
Income Tax
% Of Pretax Income
Net Earnings -$7.223M -$8.664M -$14.09M
YoY Change -53.27% -38.51% 24.8%
Net Earnings / Revenue -253.71% -367.43% -683.65%
Basic Earnings Per Share
Diluted Earnings Per Share -$217.7K -$261.3K -$489.9K
COMMON SHARES
Basic Shares Outstanding 33.18M shares 165.6M shares 143.8M shares
Diluted Shares Outstanding

Balance Sheet

Concept 2018 Q3 2018 Q2 2017 Q2
SHORT-TERM ASSETS
Cash & Short-Term Investments $30.80M $40.40M $51.00M
YoY Change -55.49% -20.78% -17.34%
Cash & Equivalents $25.56M $30.47M $26.68M
Short-Term Investments $5.300M $10.00M $24.40M
Other Short-Term Assets $1.100M $800.0K $1.200M
YoY Change -21.43% -33.33% 20.0%
Inventory
Prepaid Expenses
Receivables $2.855M $2.505M $2.231M
Other Receivables $0.00 $0.00 $0.00
Total Short-Term Assets $34.82M $43.70M $54.38M
YoY Change -52.31% -19.64% -15.7%
LONG-TERM ASSETS
Property, Plant & Equipment $312.0K $352.0K $426.0K
YoY Change -18.75% -17.37% -5.54%
Goodwill $8.982M $8.982M $8.982M
YoY Change 0.0% 0.0% 0.0%
Intangibles
YoY Change
Long-Term Investments
YoY Change
Other Assets $3.000K $3.000K $3.000K
YoY Change 0.0% 0.0% 0.0%
Total Long-Term Assets $9.450M $9.490M $9.411M
YoY Change 0.86% 0.84% -1.86%
TOTAL ASSETS
Total Short-Term Assets $34.82M $43.70M $54.38M
Total Long-Term Assets $9.450M $9.490M $9.411M
Total Assets $44.27M $53.19M $63.80M
YoY Change -46.26% -16.62% -13.91%
SHORT-TERM LIABILITIES
YoY Change
Accounts Payable $3.008M $4.275M $8.202M
YoY Change -53.86% -47.88% 111.66%
Accrued Expenses $3.300M $3.263M $2.480M
YoY Change 30.54% 31.57% 23.26%
Deferred Revenue
YoY Change
Short-Term Debt $0.00 $0.00 $0.00
YoY Change
Long-Term Debt Due $6.900M $6.965M $3.931M
YoY Change 34.87% 77.18% -27.59%
Total Short-Term Liabilities $13.23M $14.50M $14.61M
YoY Change -6.57% -0.75% 29.14%
LONG-TERM LIABILITIES
Long-Term Debt $30.20M $31.53M $39.95M
YoY Change -20.02% -21.08% 141.57%
Other Long-Term Liabilities $29.00K $46.00K $0.00
YoY Change -100.0%
Total Long-Term Liabilities $30.23M $31.58M $39.95M
YoY Change -19.94% -20.96% 140.67%
TOTAL LIABILITIES
Total Short-Term Liabilities $13.23M $14.50M $14.61M
Total Long-Term Liabilities $30.23M $31.58M $39.95M
Total Liabilities $43.48M $46.08M $54.57M
YoY Change -16.25% -15.55% 95.46%
SHAREHOLDERS EQUITY
Retained Earnings -$978.9M -$971.7M -$928.8M
YoY Change 3.67% 4.62% 8.09%
Common Stock $979.7M $978.8M $939.5M
YoY Change 0.36% 4.18% 3.6%
Preferred Stock
YoY Change
Treasury Stock (at cost) $0.00 $0.00 $1.524M
YoY Change -100.0% -100.0% 0.0%
Treasury Stock Shares 0.000 shares 0.000 shares 1.223M shares
Shareholders Equity $782.0K $7.110M $9.228M
YoY Change
Total Liabilities & Shareholders Equity $44.27M $53.19M $63.80M
YoY Change -46.26% -16.62% -13.91%

Cashflow Statement

Concept 2018 Q3 2018 Q2 2017 Q2
OPERATING ACTIVITIES
Net Income -$7.223M -$8.664M -$14.09M
YoY Change -53.27% -38.51% 24.8%
Depreciation, Depletion And Amortization $40.00K $50.00K $50.00K
YoY Change -42.86% 0.0% -16.67%
Cash From Operating Activities -$8.230M -$6.940M -$9.220M
YoY Change -50.06% -24.73% -15.02%
INVESTING ACTIVITIES
Capital Expenditures -$10.00K $0.00 -$80.00K
YoY Change -50.0% -100.0% -68.0%
Acquisitions
YoY Change
Other Investing Activities $4.690M $13.82M -$5.940M
YoY Change -5.44% -332.66% -210.61%
Cash From Investing Activities $4.680M $13.81M -$6.010M
YoY Change -5.07% -329.78% -217.15%
FINANCING ACTIVITIES
Cash Dividend Paid
YoY Change
Common Stock Issuance & Retirement, Net
YoY Change
Debt Paid & Issued, Net
YoY Change
Cash From Financing Activities -1.360M -1.140M -510.0K
YoY Change -103.92% 123.53% 59.38%
NET CHANGE
Cash From Operating Activities -8.230M -6.940M -9.220M
Cash From Investing Activities 4.680M 13.81M -6.010M
Cash From Financing Activities -1.360M -1.140M -510.0K
Net Change In Cash -4.910M 5.730M -15.74M
YoY Change -121.2% -136.4% 160.6%
FREE CASH FLOW
Cash From Operating Activities -$8.230M -$6.940M -$9.220M
Capital Expenditures -$10.00K $0.00 -$80.00K
Free Cash Flow -$8.220M -$6.940M -$9.140M
YoY Change -50.06% -24.07% -13.77%

Facts In Submission

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<div style="font-family:Times New Roman;font-size:10pt;"><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-weight:bold;text-decoration:underline;">Nature of Business</font></div><div style="line-height:120%;padding-top:8px;text-indent:30px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">Curis, Inc. is a biotechnology company seeking to develop and commercialize innovative drug candidates for the treatment of human cancers. As used throughout these consolidated financial statements, the term &#8220;the Company&#8221; refers to the business of Curis, Inc. and its wholly owned subsidiaries, except where the context otherwise requires, and the term &#8220;Curis&#8221; refers to Curis, Inc.</font></div><div style="line-height:120%;padding-top:8px;text-indent:30px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">The Company conducts its research and development programs both internally and through strategic collaborations. The Company&#8217;s clinical stage drug candidates are fimepinostat (CUDC-907), which is currently in clinical studies in patients with MYC-altered diffuse large B-cell lymphoma (DLBCL) and solid tumors; CA-170, which is currently undergoing testing in a Phase 1 study in patients with advanced solid tumors and lymphomas; and CA-4948, which is being tested in a Phase 1 trial in patients with advanced non-Hodgkin lymphomas, including those with myeloid differentiation primary response 88, or MYD88, alterations. The U.S. Food and Drug Administration, or FDA, granted fimepinostat Orphan Drug Designation in April 2015 and Fast Track Designation in May 2018 for the treatment of DLBCL. The Company&#8217;s pipeline also includes CA-327, which is a pre-Investigational New Drug (IND) stage oncology drug candidate. The Company continues work to enable the filing of an IND application with the U.S. FDA for clinical testing of CA-327 in 2018. The Company is party to a collaboration with F. Hoffmann-La Roche Ltd, or Roche, and Genentech Inc., or Genentech, a member of the Roche Group, under which Roche and Genentech are commercializing Erivedge, a first-in-class orally-administered small molecule Hedgehog signaling pathway inhibitor. Erivedge&#174; (vismodegib) is approved for the treatment of advanced basal cell carcinoma, or BCC.</font></div><div style="line-height:120%;padding-top:8px;text-indent:30px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">In January 2015, and as amended in September 2016, the Company entered into a collaboration, option and license agreement focused on immuno-oncology and selected precision oncology targets with Aurigene Discovery Technologies Limited, or Aurigene.</font></div><div style="line-height:120%;padding-top:8px;text-indent:30px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">The collaboration with Aurigene is comprised of multiple programs, and Curis has the option to exclusively license each program, including data, intellectual property and compounds associated therewith, once a development candidate is nominated within such program. In October 2015, the Company exercised options to license </font><font style="font-family:inherit;font-size:10pt;">two</font><font style="font-family:inherit;font-size:10pt;"> programs under this collaboration. The first licensed program is in the immuno-oncology field and the Company has named CA-170, an orally-available small molecule antagonist of two immune checkpoints, programmed death ligand-1 (PDL1) and V-domain Ig suppressor of T cell activation (VISTA), as the development candidate from this program. The second licensed program is in the precision oncology field and the Company has named CA-4948, an orally-available small molecule inhibitor of Interleukin-1 receptor-associated kinase 4 (IRAK4) as the development candidate. In October 2016, the Company exercised its option to license a third program in the collaboration, and designated CA-327, a distinct orally available small molecule antagonist of two immune checkpoints, PDL1 and T-cell immunoglobulin and mucin domain containing protein-3 (TIM3) as the development candidate from this program. In March 2018, the Company exercised its option to license a fourth program, which is an immuno-oncology program. </font></div><div style="line-height:120%;padding-top:8px;text-indent:30px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">The Company operates in a single reportable segment, which is the research and development of innovative cancer therapeutics. The Company expects that any products that are successfully developed and commercialized would be used in the healthcare industry and would be regulated in the United&#160;States by the FDA and in overseas markets by similar regulatory authorities.</font></div><div style="line-height:120%;padding-top:8px;text-indent:30px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">The Company is subject to risks common to companies in the biotechnology industry as well as risks that are specific to the Company&#8217;s business, including, but not limited to: the Company&#8217;s ability to advance and expand its research and development programs; the Company&#8217;s reliance on Aurigene to successfully discover and preclinically develop drug candidates under the parties&#8217; collaboration agreement; the Company&#8217;s reliance on Roche and Genentech to successfully commercialize Erivedge in the approved indication of advanced BCC and to progress its clinical development in indications other than BCC; the Company&#8217;s ability to obtain adequate financing to fund its operations; the ability of the Company and its wholly-owned subsidiary, Curis Royalty, LLC, or Curis Royalty, to satisfy the terms of its credit agreement with HealthCare Royalty Partners III, L.P., a Delaware limited partnership managed by HealthCare Royalty Management, LLC, or HealthCare Royalty; the Company&#8217;s ability to obtain and maintain necessary intellectual property protection; development by the Company&#8217;s competitors of new or better technological innovations; the Company's dependence on key personnel; the Company&#8217;s ability to comply with regulatory requirements; the Company's ability to obtain and maintain applicable regulatory approvals and commercialize any approved product candidates and the Company&#8217;s ability to execute on its overall business strategies.</font></div><div style="line-height:120%;padding-top:8px;text-indent:30px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">The Company&#8217;s future operating results will largely depend on the progress of drug candidates currently in its development pipeline and the magnitude of payments that it may receive and make under its current and potential future collaborations. The results of the Company&#8217;s operations have varied and will likely continue to vary significantly from year to year and quarter to quarter and depend on a number of factors, including, but not limited to: the timing, outcome and cost of the Company&#8217;s preclinical studies and clinical trials for its drug candidates; Aurigene&#8217;s ability to successfully discover and develop preclinical programs under the Company&#8217;s collaboration with Aurigene, as well as the Company&#8217;s decision to exclusively license and further develop programs under this collaboration; Roche and Genentech&#8217;s ability to successfully commercialize Erivedge; and positive results in Roche and Genentech&#8217;s ongoing clinical trials.</font></div><div style="line-height:120%;padding-top:8px;text-indent:30px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">The Company has incurred losses and negative cash flows from operations since its inception. As of </font><font style="font-family:inherit;font-size:10pt;">June&#160;30, 2018</font><font style="font-family:inherit;font-size:10pt;">, the Company had an accumulated deficit of approximately </font><font style="font-family:inherit;font-size:10pt;">$971.7 million</font><font style="font-family:inherit;font-size:10pt;">. The Company anticipates that its </font><font style="font-family:inherit;font-size:10pt;">$40.4 million</font><font style="font-family:inherit;font-size:10pt;"> of existing cash, cash equivalents and investments at </font><font style="font-family:inherit;font-size:10pt;">June&#160;30, 2018</font><font style="font-family:inherit;font-size:10pt;"> should enable it to maintain its planned operations into the second half of 2019. In order to ensure adequate cash resources for 12 months from the issuance date of these financial statements, the Company will reduce or delay spending on its research and development programs and operating expenses to the extent it is unable to raise additional capital through its current&#160;at-the-market sale agreement with Cowen and Company, LLC, or Cowen or other potential financing.&#160;The Company&#8217;s ability to raise additional funds will depend, among other factors, on financial, economic and market conditions, many of which are outside of its control and it may be unable to raise financing in the next 12 months, or on terms favorable to the Company. The Company&#8217;s inability to obtain additional funds in the next 12 months would delay, or cause the Company to reduce in scope or eliminate some of its development programs, potentially delaying the time to market for any of its product candidates, and would have a negative impact on the Company&#8217;s financial condition and ability to pursue its business strategies.</font></div></div>

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