2014 Q4 Form 10-Q Financial Statement

#000119312514404759 Filed on November 10, 2014

View on sec.gov

Income Statement

Concept 2014 Q4 2014 Q3 2013 Q3
Revenue $1.993M $1.765M $7.202M
YoY Change 30.74% -75.5% 1146.55%
Cost Of Revenue $90.00K $90.00K $50.00K
YoY Change 28.57% 80.0% 150.0%
Gross Profit $1.900M $1.680M $7.150M
YoY Change 31.03% -76.5% 1176.79%
Gross Profit Margin 95.35% 95.19% 99.28%
Selling, General & Admin $3.060M $2.720M $2.850M
YoY Change 2.68% -4.56% 15.38%
% of Gross Profit 161.05% 161.9% 39.86%
Research & Development $3.650M $3.705M $4.171M
YoY Change 23.31% -11.16% 37.08%
% of Gross Profit 192.11% 220.56% 58.33%
Depreciation & Amortization $50.00K $40.00K $30.00K
YoY Change 25.0% 33.33% 0.0%
% of Gross Profit 2.63% 2.38% 0.42%
Operating Expenses $6.710M $3.705M $4.171M
YoY Change 12.96% -11.16% 37.08%
Operating Profit -$4.811M -$4.753M $130.4K
YoY Change 7.31% -3745.86% -102.63%
Interest Expense -$880.0K $933.9K $964.5K
YoY Change -403.45% -3.18% -38.95%
% of Operating Profit 739.86%
Other Income/Expense, Net -$827.1K -$1.998M
YoY Change -58.61% -226.8%
Pretax Income -$5.690M -$5.580M -$1.870M
YoY Change 35.48% 198.4% -44.84%
Income Tax $0.00 $0.00
% Of Pretax Income
Net Earnings -$5.689M -$5.580M -$1.868M
YoY Change 35.51% 198.75% -44.82%
Net Earnings / Revenue -285.49% -316.18% -25.93%
Basic Earnings Per Share
Diluted Earnings Per Share -$330.8K -$324.4K -$113.4K
COMMON SHARES
Basic Shares Outstanding 86.00M shares 86.00M shares 81.69M shares
Diluted Shares Outstanding

Balance Sheet

Concept 2014 Q4 2014 Q3 2013 Q3
SHORT-TERM ASSETS
Cash & Short-Term Investments $49.80M $54.60M $63.20M
YoY Change -14.43% -13.61% 53.77%
Cash & Equivalents $7.747M $7.933M $13.78M
Short-Term Investments $42.00M $46.70M $49.40M
Other Short-Term Assets $500.0K $700.0K $500.0K
YoY Change 0.0% 40.0% 0.0%
Inventory
Prepaid Expenses
Receivables $1.961M $1.839M $1.156M
Other Receivables $0.00 $0.00 $0.00
Total Short-Term Assets $52.21M $57.11M $64.89M
YoY Change -13.22% -12.0% 53.77%
LONG-TERM ASSETS
Property, Plant & Equipment $407.7K $407.4K $467.5K
YoY Change -8.51% -12.86% -6.5%
Goodwill $8.982M $8.982M $8.982M
YoY Change 0.0% 0.0%
Intangibles
YoY Change
Long-Term Investments $800.0K $1.500M $3.900M
YoY Change -92.52% -61.54% 387.5%
Other Assets $67.54K $77.56K $116.9K
YoY Change -35.08% -33.66% -41.54%
Total Long-Term Assets $10.40M $11.10M $13.65M
YoY Change -49.09% -18.7% 31.29%
TOTAL ASSETS
Total Short-Term Assets $52.21M $57.11M $64.89M
Total Long-Term Assets $10.40M $11.10M $13.65M
Total Assets $62.61M $68.21M $78.55M
YoY Change -22.31% -13.16% 49.33%
SHORT-TERM LIABILITIES
YoY Change
Accounts Payable $2.349M $2.371M $2.291M
YoY Change 15.33% 3.52% -15.16%
Accrued Expenses $2.008M $1.942M $1.977M
YoY Change 5.03% -1.77% 52.07%
Deferred Revenue
YoY Change
Short-Term Debt $0.00 $0.00 $0.00
YoY Change
Long-Term Debt Due $5.710M $5.522M $1.450M
YoY Change 118.76% 280.81%
Total Short-Term Liabilities $10.07M $9.835M $5.718M
YoY Change 53.49% 72.01% 42.94%
LONG-TERM LIABILITIES
Long-Term Debt $22.59M $23.54M $29.13M
YoY Change -19.17% -19.19%
Other Long-Term Liabilities $174.0K $187.4K $197.9K
YoY Change -11.55% -5.3% -93.18%
Total Long-Term Liabilities $22.76M $23.73M $29.33M
YoY Change -19.11% -19.1% 911.37%
TOTAL LIABILITIES
Total Short-Term Liabilities $10.07M $9.835M $5.718M
Total Long-Term Liabilities $22.76M $23.73M $29.33M
Total Liabilities $32.83M $33.56M $36.97M
YoY Change -7.31% -9.23% 435.85%
SHAREHOLDERS EQUITY
Retained Earnings -$779.6M -$773.9M -$756.6M
YoY Change 2.46% 2.28%
Common Stock $810.9M $872.3K $853.5K
YoY Change 93016.24% 2.2%
Preferred Stock
YoY Change
Treasury Stock (at cost) $1.524M $1.524M $1.524M
YoY Change 0.0% 0.0%
Treasury Stock Shares 1.223M shares 1.223M shares 1.223M shares
Shareholders Equity $29.78M $34.65M $41.57M
YoY Change
Total Liabilities & Shareholders Equity $62.61M $68.21M $78.55M
YoY Change -22.31% -13.16% 49.33%

Cashflow Statement

Concept 2014 Q4 2014 Q3 2013 Q3
OPERATING ACTIVITIES
Net Income -$5.689M -$5.580M -$1.868M
YoY Change 35.51% 198.75% -44.82%
Depreciation, Depletion And Amortization $50.00K $40.00K $30.00K
YoY Change 25.0% 33.33% 0.0%
Cash From Operating Activities -$4.690M -$2.080M $270.0K
YoY Change -14.88% -870.37% -106.46%
INVESTING ACTIVITIES
Capital Expenditures -$20.00K -$10.00K -$100.0K
YoY Change 0.0% -90.0% 900.0%
Acquisitions
YoY Change
Other Investing Activities $5.280M $690.0K -$5.960M
YoY Change -189.34% -111.58% 341.48%
Cash From Investing Activities $5.250M $680.0K -$6.060M
YoY Change -188.53% -111.22% 345.59%
FINANCING ACTIVITIES
Cash Dividend Paid
YoY Change
Common Stock Issuance & Retirement, Net
YoY Change
Debt Paid & Issued, Net
YoY Change
Cash From Financing Activities -740.0K -820.0K 9.820M
YoY Change -110.21% -108.35% 679.37%
NET CHANGE
Cash From Operating Activities -4.690M -2.080M 270.0K
Cash From Investing Activities 5.250M 680.0K -6.060M
Cash From Financing Activities -740.0K -820.0K 9.820M
Net Change In Cash -180.0K -2.220M 4.030M
YoY Change -95.7% -155.09% -194.16%
FREE CASH FLOW
Cash From Operating Activities -$4.690M -$2.080M $270.0K
Capital Expenditures -$20.00K -$10.00K -$100.0K
Free Cash Flow -$4.670M -$2.070M $370.0K
YoY Change -14.94% -659.46% -108.87%

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<div> <p style="MARGIN-BOTTOM: 0pt; WHITE-SPACE: normal; TEXT-TRANSFORM: none; WORD-SPACING: 0px; COLOR: rgb(0,0,0); FONT: 10pt 'Times New Roman'; MARGIN-LEFT: 62px; MARGIN-TOP: 6pt; LETTER-SPACING: normal; TEXT-INDENT: 4%; -webkit-text-stroke-width: 0px"> In May 2014, the FASB issued guidance codified in ASC 606,<i>&#xA0;Revenue Recognition&#x2014;Revenue from Contracts with Customers</i>, which amends the guidance in former ASC 605,<i>&#xA0;Revenue Recognition,</i>&#xA0;and is effective for public companies for fiscal years beginning after December&#xA0;15, 2016. The Company is currently evaluating the impact of the provisions of ASC 606.</p> <p style="MARGIN-BOTTOM: 0pt; WHITE-SPACE: normal; TEXT-TRANSFORM: none; WORD-SPACING: 0px; COLOR: rgb(0,0,0); FONT: 10pt 'Times New Roman'; MARGIN-LEFT: 62px; MARGIN-TOP: 6pt; LETTER-SPACING: normal; TEXT-INDENT: 4%; -webkit-text-stroke-width: 0px"> In August 2014, the FASB issued an accounting standards update,&#xA0;<i>Disclosures of Uncertainties about an Entity&#x2019;s Ability to Continue as a Going Concern,&#xA0;</i>which is included in ASC 205,&#xA0;<i>Presentation of Financial Statements</i>. This update provides an explicit requirement for management to assess an entity&#x2019;s ability to continue as a going concern, and to provide related footnote disclosure in certain circumstances. The guidance will be effective for fiscal years beginning after December&#xA0;15, 2016, and applied prospectively; early adoption is also permitted. The Company does not expect adoption of this guidance to have a material impact on its financial condition or results of operations.</p> </div>
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<div> <table style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman'; BORDER-COLLAPSE: collapse; TEXT-TRANSFORM: none; WORD-SPACING: 0px; LETTER-SPACING: normal; TEXT-INDENT: 0px; -webkit-text-stroke-width: 0px" cellspacing="0" cellpadding="0" width="100%" border="0"> <tr> <td valign="top" width="4%" align="left"><b>1.</b></td> <td valign="top" align="left"><b><u>Nature of Business</u></b></td> </tr> </table> <p style="MARGIN-BOTTOM: 0pt; WHITE-SPACE: normal; TEXT-TRANSFORM: none; WORD-SPACING: 0px; COLOR: rgb(0,0,0); FONT: 10pt 'Times New Roman'; MARGIN-LEFT: 62px; MARGIN-TOP: 6pt; LETTER-SPACING: normal; TEXT-INDENT: 4%; -webkit-text-stroke-width: 0px"> Curis, Inc. is an oncology-focused company developing novel drug candidates for the treatment of human cancers. As used throughout these consolidated financial statements, the term &#x201C;the Company&#x201D; refers to the business of Curis, Inc. and its wholly owned subsidiaries, except where the context otherwise requires, and the term &#x201C;Curis&#x201D; refers to Curis, Inc.</p> <p style="MARGIN-BOTTOM: 0pt; WHITE-SPACE: normal; TEXT-TRANSFORM: none; WORD-SPACING: 0px; COLOR: rgb(0,0,0); FONT: 10pt 'Times New Roman'; MARGIN-LEFT: 62px; MARGIN-TOP: 6pt; LETTER-SPACING: normal; TEXT-INDENT: 4%; -webkit-text-stroke-width: 0px"> The Company conducts its research and development programs both internally and through strategic collaborations. The Company is leveraging its experience in targeting signaling pathways to develop drug candidates including CUDC-907, a dual histone deacetylase, or HDAC and phosphoinositide-3 kinase, or PI3K, inhibitor, and CUDC-427, a small molecule antagonist of the inhibitor of apoptosis, or IAP, proteins. Erivedge&#xAE;, the first and only approved medicine for the treatment of advanced basal cell carcinoma, or BCC, is being commercialized by F. Hoffmann-La Roche Ltd., or Roche, and Genentech Inc., or Genentech, a member of the Roche Group, under a collaboration agreement between Curis and Genentech.</p> <p style="MARGIN-BOTTOM: 0pt; WHITE-SPACE: normal; TEXT-TRANSFORM: none; WORD-SPACING: 0px; COLOR: rgb(0,0,0); FONT: 10pt 'Times New Roman'; MARGIN-LEFT: 62px; MARGIN-TOP: 6pt; LETTER-SPACING: normal; TEXT-INDENT: 4%; -webkit-text-stroke-width: 0px"> In August 2009, the Company granted a worldwide, exclusive royalty-bearing license to develop, manufacture, market and sell its HSP90 inhibitor technology, including Debio 0932, to Debiopharm Group, or Debiopharm. Under the agreement, Debiopharm had assumed all future development responsibility for Debio 0932 and has incurred all costs related to the development of products under the agreement.</p> <p style="MARGIN-BOTTOM: 0pt; WHITE-SPACE: normal; TEXT-TRANSFORM: none; WORD-SPACING: 0px; COLOR: rgb(0,0,0); FONT: 10pt 'Times New Roman'; MARGIN-LEFT: 62px; MARGIN-TOP: 6pt; LETTER-SPACING: normal; TEXT-INDENT: 4%; -webkit-text-stroke-width: 0px"> In August 2012, Debiopharm initiated the HALO, or HSP90 inhibition And Lung cancer Outcomes, phase 1/2 clinical trial of Debio 0932 in combination with various chemotherapy regimens in patients with stage IIIb or IV non-small cell lung cancer, or NSCLC without known epidermal growth factor receptor, or EGFR, mutations.&#xA0;The primary objective of this trial is to analyze the effect of adding Debio 0932 to combination chemotherapy with cisplatin/pemetrexed, cisplatin/ gemcitabine or docetaxel on the rate of progression-free survival at 6 months in first-line or second-line therapy of patients in this trial population.</p> <p style="MARGIN-BOTTOM: 0pt; WHITE-SPACE: normal; TEXT-TRANSFORM: none; WORD-SPACING: 0px; COLOR: rgb(0,0,0); FONT: 10pt 'Times New Roman'; MARGIN-LEFT: 62px; MARGIN-TOP: 6pt; LETTER-SPACING: normal; TEXT-INDENT: 4%; -webkit-text-stroke-width: 0px"> Debiopharm has recently reviewed available data from all three arms of the ongoing phase 1 portion of the HALO study and has determined that it will not advance to the phase 2 stage of the study. Safety observations were generally consistent with the expected side effects of Debio 0932 and/or the respective chemotherapeutic regimens administered in the trial. No new Debio 0932-related side effects were identified. Debiopharm has informed Curis that it will discontinue the phase 1 portion of this study in November 2014.</p> <p style="MARGIN-BOTTOM: 0pt; WHITE-SPACE: normal; TEXT-TRANSFORM: none; WORD-SPACING: 0px; COLOR: rgb(0,0,0); FONT: 10pt 'Times New Roman'; MARGIN-LEFT: 62px; MARGIN-TOP: 6pt; LETTER-SPACING: normal; TEXT-INDENT: 4%; -webkit-text-stroke-width: 0px"> Debiopharm has indicated that it plans to return the rights to Debio 0932 to the Company and Curis expects to receive formal notice of termination of the licence agreement from Debiopharm. Curis anticipates that the parties will seek to enter into a transition agreement in the fourth quarter of 2014 regarding the orderly return of the program to Curis. While the Company does not plan to continue further study of Debio 0932 in non-small cell lung cancer, it is exploring the potential to test the molecule in other promising indications, either in company-sponsored or investigator sponsored studies.</p> <p style="MARGIN-BOTTOM: 0pt; WHITE-SPACE: normal; TEXT-TRANSFORM: none; WORD-SPACING: 0px; COLOR: rgb(0,0,0); FONT: 10pt 'Times New Roman'; MARGIN-LEFT: 62px; MARGIN-TOP: 6pt; LETTER-SPACING: normal; TEXT-INDENT: 4%; -webkit-text-stroke-width: 0px"> 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 health care industry and would be regulated in the United States by the Food and Drug Administration, or FDA, and in overseas markets by similar regulatory authorities.</p> <p style="MARGIN-BOTTOM: 0pt; WHITE-SPACE: normal; TEXT-TRANSFORM: none; WORD-SPACING: 0px; COLOR: rgb(0,0,0); FONT: 10pt 'Times New Roman'; MARGIN-LEFT: 62px; MARGIN-TOP: 6pt; LETTER-SPACING: normal; TEXT-INDENT: 4%; -webkit-text-stroke-width: 0px"> The Company is subject to risks common to companies in the biotechnology industry as well as risk factors that are specific to the Company&#x2019;s business, including, but not limited to: the Company&#x2019;s reliance on Genentech and Roche to successfully commercialize Erivedge in the approved indication of advanced BCC the Company&#x2019;s ability to advance and expand its research and development programs; the Company&#x2019;s ability to obtain adequate financing to fund its operations; the ability of the Company&#x2019;s wholly owned subsidiary, Curis Royalty, LLC, or Curis Royalty, to satisfy the terms of its loan agreement with BioPharma Secured Debt Fund II Sub, S.&#xE0; r.l., a Luxembourg limited liability company managed by Pharmakon Advisors, or BioPharma-II; the Company&#x2019;s ability to obtain and maintain necessary intellectual property protection; development by the Company&#x2019;s competitors of new or better technological innovations; dependence on key personnel; the Company&#x2019;s ability to comply with regulatory requirements; and the Company&#x2019;s ability to execute on its overall business strategies.</p> <p style="MARGIN-BOTTOM: 0pt; WHITE-SPACE: normal; TEXT-TRANSFORM: none; WORD-SPACING: 0px; COLOR: rgb(0,0,0); FONT: 10pt 'Times New Roman'; MARGIN-LEFT: 62px; MARGIN-TOP: 6pt; LETTER-SPACING: normal; TEXT-INDENT: 4%; -webkit-text-stroke-width: 0px"> The Company&#x2019;s future operating results will largely depend on the magnitude of payments from its current and potential future corporate collaborators and the progress of drug candidates currently in its development pipeline. The results of the Company&#x2019;s operations will vary significantly from year to year and quarter to quarter and depend on a number of factors, including, but not limited to: Roche and Genentech&#x2019;s ability to successfully commercialize Erivedge; the timing, outcome and cost of the Company&#x2019;s preclinical studies and clinical trials for its drug candidates; and the Company&#x2019;s ability to successfully enter into one or more material licenses or collaboration agreements for its proprietary drug candidates.</p> <p style="MARGIN-BOTTOM: 0px; WHITE-SPACE: normal; TEXT-TRANSFORM: none; WORD-SPACING: 0px; COLOR: rgb(0,0,0); FONT: 1px 'Times New Roman'; MARGIN-TOP: 6px; LETTER-SPACING: normal; TEXT-INDENT: 0px; -webkit-text-stroke-width: 0px"> &#xA0;</p> <p style="MARGIN-BOTTOM: 0pt; WHITE-SPACE: normal; TEXT-TRANSFORM: none; WORD-SPACING: 0px; COLOR: rgb(0,0,0); FONT: 10pt 'Times New Roman'; MARGIN-LEFT: 62px; MARGIN-TOP: 0pt; LETTER-SPACING: normal; TEXT-INDENT: 4%; -webkit-text-stroke-width: 0px"> The Company anticipates that existing cash, cash equivalents and investments at September&#xA0;30, 2014 should enable it to maintain current and planned operations into 2016. The Company&#x2019;s ability to continue funding its planned operations beyond this period is dependent upon, among other things, the success of its collaborations with Genentech and the Leukemia&#xA0;&amp; Lymphoma Society, or LLS, including its receipt of additional contingent cash payments under these collaborations; its ability to control expenses and its ability to raise additional funds through equity or debt financings, new collaborations or other sources of financing. The Company may not be able to successfully raise additional funds or enter into or continue any corporate collaborations and the timing, amount and likelihood of the Company receiving payments under such collaborations is highly uncertain. If the Company is unable to obtain adequate financing, the Company may be required to reduce or delay spending on its research and/or development programs.</p> </div>
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