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Curis, Inc. (NASDAQ:CRIS) Could Reverse On Near Term Catalysts

Curis, Inc. (NASDAQ:CRIS) Could Reverse On Near Term Catalysts
Written by
Chris Sandburg
Published on
July 22, 2016
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Massachusetts based biotech Curis, Inc. (NASDAQ:CRIS) soared into the close of 2015, as data from its lead oncology candidate hinted at a revolution in cancer therapy. The company has had a rough to-date 2016, however, and currently trades at a 45% discount to its January open.The company has a few near term catalysts that could reverse sentiment and send it strengthening into the close of 2016. Ahead of these catalysts, let's take a look at what's coming up, and what the implications might be for Curis and its shareholders.The company's two focus candidates are CUDC-907 and CA-170. The former is what's called an HDAC and PI3K enzyme inhibitor, with target indications of DLBCL and soli tumors, specifically cases of both in which there's an alteration in what's called the MYC protein. The latter is going after solid tumors by way of PD-L1 antagonization.HDAC inhibition is a pretty well established treatment in psychiatry and epilepsy, but it's shown promise in oncology. Scientists aren’t really sure why, but the most popular belief is it interferes in the signaling that causes cell replication (which in cancer, is unregulated and prolific).CA-170 is a cancer immunotherapy candidate. We won't go into the science in too much detail – it's enough to say that it's designed employ the patient's immune system to recognize, target and destroy cancerous cells. Immunotherapy is a real hot topic in the oncology space right now, and there are plenty of speculative dollars flowing into the development of drugs that employ this approach.So what sets Curis' candidates aside? All the big names in both of these approaches are intravenous administration. Both CUDC-907 and CA-170 are oral administration, which has obvious benefits. Self administration, less invasive, cheaper, quicker all these things. If Curis can get an FDA green light for its candidates, they would be the first oral administration options in their respective classes for the target indications. That's a huge market potential.Data so far has been good. In a phase I for CUDC-907 in DLBCL, 9 of 21 evaluable patients showed an objective response, and the company is currently running a phase II based on the maximum tolerable dose data pulled from the phase I.This is the next major catalyst.The company recently held a conference call, and management noted that the company is hoping to serve up some interim from the phase II at the ASH Annual Meeting in December. Abstract for this meeting are due for submission in August, so we should get some insight into what's happening on submission day. If the abstract points to efficacy, there's some immediate upside potential.The CA-170 trial should serve up some data at the ASCO annual meeting next year, so at some point between June 2-6. Again, there's some immediate upside potential on an efficacy readout.As is standard at this end of the biotech market, the primary risk going forward is financial. Curis generates revenues from a Genentech agreement rooted in the former's prop tech, which amounts to around $1.7 million quarterly. This doesn’t cover its R&D expenses though, and Curis has recorded a net loss of $9 million and $13 million in the two previously reported quarters (Q1, 2016 and Q4, 2015) respectively. The shortfall necessitates capital raises, and these are likely to be dilutive going forward. The company has a universal shelf registration statement, which basically means it can issue as and when it wants, without a separate registration. Again, this isn’t unusual for biotech juniors, but it means dilution could come thick and fast if Curis' management feels it's necessary. Cash on hand at March 31 came in at $14 million, so this mitigates the near term dilutive risk a little bit.So what's the takeaway?Well, Curis is trying to bring oral administration cancer treatments to market, and if it succeeds, both of its current indications have the potential to be blockbuster markets. It's early days, but the data collected so far hints at efficacy, and we've got a couple of near term data drops that could prove the catalysts behind a reversal in sentiment. Capital is a risk, and dilution is pretty much guaranteed, but cash is strong as things stand, and big pharma collaboration is (and will continue) bringing money in each quarter.One to watch.We will be updating Insider Financial as soon as we know more. For the latest updates on CRIS, sign up for our free newsletter today!Disclosure: We have no position in CRIS and have not been compensated for this article.

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