Curis(US:CRIS)2022-08-03 16:00PART I. FINANCIAL INFORMATION Unaudited Financial Statements This section presents Curis, Inc.'s unaudited condensed consolidated financial statements, including balance sheets, statements of operations, and cash flows, for Q2 and H1 2022 Condensed Consolidated Balance Sheets Total assets decreased to $128.8 million from $162.3 million at year-end 2021, driven by reduced cash and investments, while equity declined to $62.0 million Condensed Consolidated Balance Sheet Highlights (in thousands of USD) | Account | June 30, 2022 | Dec 31, 2021 | | :--- | :--- | :--- | | Assets | | | | Cash and cash equivalents | $34,008 | $40,014 | | Total current assets | $113,396 | $122,375 | | Total assets | $128,834 | $162,301 | | Liabilities & Equity | | | | Total current liabilities | $12,151 | $13,438 | | Liability related to the sale of future royalties, net | $51,248 | $53,798 | | Total liabilities | $66,789 | $71,594 | | Total stockholders' equity | $62,045 | $90,707 | Condensed Consolidated Statements of Operations and Comprehensive Loss Curis reported a net loss of $15.9 million for Q2 2022, a 47% increase from Q2 2021, primarily due to higher R&D and G&A expenses Statement of Operations Summary (in thousands of USD, except per share data) | Metric | Q2 2022 | Q2 2021 | YTD 2022 | YTD 2021 | | :--- | :--- | :--- | :--- | :--- | | Total revenues, net | $2,393 | $2,286 | $4,450 | $4,475 | | Research and development | $12,323 | $8,753 | $23,758 | $15,510 | | General and administrative | $5,089 | $4,067 | $10,762 | $8,190 | | Loss from operations | ($15,061) | ($10,650) | ($30,194) | ($19,450) | | Net loss | ($15,940) | ($10,838) | ($32,049) | ($20,765) | | Net loss per share | ($0.17) | ($0.12) | ($0.35) | ($0.23) | Condensed Consolidated Statements of Cash Flows Net cash used in operating activities increased to $28.9 million for the first six months of 2022, reflecting a higher net loss, with cash and equivalents decreasing to $34.6 million Cash Flow Summary for Six Months Ended June 30 (in thousands of USD) | Activity | 2022 | 2021 | | :--- | :--- | :--- | | Net cash used in operating activities | ($28,947) | ($19,838) | | Net cash provided by (used in) investing activities | $25,257 | ($32,842) | | Net cash provided by (used in) financing activities | ($2,407) | ($1,904) | | Net decrease in cash | ($6,097) | ($54,584) | Notes to Condensed Consolidated Financial Statements These notes provide crucial context, detailing the company's business, collaborations, accounting policies, and confirming sufficient cash to fund operations for at least 12 months - The company's clinical stage drug candidates include emavusertib (IRAK4 inhibitor), CI-8993 (VISTA antagonist), fimepinostat, and CA-17054 - As of June 30, 2022, the company had $107.2 million in cash, cash equivalents, and investments, anticipated to fund operations for at least 12 months from the filing date62 - Royalty revenue from Genentech for Erivedge sales was $2.5 million for Q2 2022 and $4.5 million for the first six months of 2022112 - The carrying value of the liability related to the sale of future royalties to Oberland was $51.2 million as of June 30, 2022110 Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses business strategy, clinical pipeline progress, and financial results, highlighting the FDA's partial clinical hold on emavusertib trials and the need for future financing Overview and Key Developments Curis focuses on cancer therapeutics, with emavusertib and CI-8993 as lead candidates, facing a significant challenge with the FDA's partial clinical hold on emavusertib trials - In April 2022, the FDA placed partial clinical holds on the company's TakeAim Leukemia and TakeAim Lymphoma studies for emavusertib (CA-4948) after a patient death, restricting new patient enrollment but allowing current patients to continue at lower doses134 - The company's near-term success is highly dependent on its ability to successfully resolve the FDA's partial clinical holds on the emavusertib trials149 - The COVID-19 pandemic has caused and may continue to cause delays in clinical trial enrollment and overall timelines for the company's studies143145 Results of Operations Total revenues increased by 5% to $2.4 million in Q2 2022, but R&D and G&A expenses rose significantly, leading to a 47% higher net loss of $15.9 million Comparison of Results for the Three Months Ended June 30 (in thousands of USD) | Line Item | 2022 | 2021 | % Change | | :--- | :--- | :--- | :--- | | Revenues, net | $2,393 | $2,286 | 5% | | Research and development | $12,323 | $8,753 | 41% | | General and administrative | $5,089 | $4,067 | 25% | | Net loss | ($15,940) | ($10,838) | 47% | - The 41% increase in R&D expenses for Q2 2022 was primarily due to a more than 100% increase in personnel-related costs ($4.9 million vs $2.3 million) and a 94% increase in stock-based compensation ($0.85 million vs $0.44 million), reflecting additional headcount170172 - Cost of royalty revenues decreased by 64% in Q2 2022 compared to Q2 2021, primarily due to the expiration of obligations to third-party university patent licensors for Erivedge sales in the U.S169 Liquidity and Capital Resources As of June 30, 2022, Curis had $107.2 million in cash, cash equivalents, and investments, expected to fund operations into 2024, but substantial future funding is required for development programs - The company's cash, cash equivalents, and investments of $107.2 million as of June 30, 2022, are expected to fund operations into 2024180194 - Net cash used in operating activities for the first six months of 2022 was $28.9 million, an increase from $19.8 million in the same period of 2021187 - The company has a common stock purchase agreement with Aspire Capital with $21.6 million remaining available and a $100.0 million "at the market offering" program, neither of which were used in the first half of 2022181182 Quantitative and Qualitative Disclosures About Market Risk There have been no material changes to the company's quantitative and qualitative disclosures about market risk since its Annual Report on Form 10-K for the year ended December 31, 2021 - There were no material changes to the company's market risk disclosures during the quarter198 Controls and Procedures Management concluded that the company's disclosure controls and procedures were effective as of June 30, 2022, with no material changes to internal control over financial reporting during Q2 2022 - Management concluded that the company's disclosure controls and procedures were effective at a reasonable assurance level as of June 30, 2022199 - No changes in internal control over financial reporting occurred during the quarter that materially affected, or are reasonably likely to materially affect, internal controls200 PART II. OTHER INFORMATION Risk Factors This section refers investors to previously disclosed risk factors in the 2021 Form 10-K and Q1 2022 Form 10-Q, indicating no new material risks in this report - The company refers to risk factors identified in its 2021 Form 10-K and Q1 2022 Form 10-Q, indicating no new material risks are being disclosed in this filing201 Exhibits This section lists all exhibits filed with the Form 10-Q, including a new consulting agreement and required CEO and CFO certifications - The exhibits filed with this report include a consulting agreement with William E. Steinkrauss, CEO and CFO certifications, and Inline XBRL documents203