Curis Inc. (CRIS, Financial) filed Quarterly Report for the period ended 2010-06-30.
Curis Inc. has a market cap of $133.8 million; its shares were traded at around $1.77 with and P/S ratio of 15.6. CRIS is in the portfolios of Jean-Marie Eveillard of First Eagle Investment Management, LLC, Jim Simons of Renaissance Technologies LLC.
Offsetting these decreases, personnel costs increased $88,000 during the three months ended June 30, 2010 as compared to the same period in the prior year as the result of adjustment to our executive officers compensation in the first quarter of 2010 to eliminate the pay reductions implemented in October 2008. In addition, we accrued for non-officer bonuses and a 401(k) matching contribution in the 2010 period that we did not accrue in the 2009 period. Consulting and professional services increased $80,000 over the prior year period due to 2010 proxy-related matters, specifically related to our 2010 Stock Incentive Plan and our 2010 Employee Stock Purchase Plan, each approved by our shareholders in June 2010.
Change in fair value of warrant liability. In connection with our January 2010 registered direct offering, we issued warrants to purchase an aggregate of 1,612,322 shares of common stock, which became exercisable as of the closing of the transaction. The warrants have an initial exercise price of $3.55 per share and have a five year term. The fair value of the warrants was estimated at $2,181,000 on the January 2010 issuance date and $3,087,000 as of March 31, 2010, using a Black-Scholes option pricing model under various probability-weighted outcomes which take into consideration the protective feature of the warrants that includes a possible cash-settlement option available to the warrantholder in the event of a change of control until the later to occur of (i) two years from the date of original issuance of the warrant and (ii) the date upon which Genentech or Roche submits a new drug application (NDA) for GDC-0449. We applied the following assumptions assigned to the various outcomes: expected volatilities ranging from 69.8% to 80%, risk free interest rates ranging from 1.42% to 2.38%, expected lives of three to five years and no dividends. Expected volatility was based on our historical volatility commensurate with the term of the warrants. The fair value of the warrants was recorded as a long-term liability. The warrants will be revalued each reporting period with updated assumptions, and the resulting change in fair value of the warrant liability will be recognized in the income statement. We estimated that the fair value of these warrants as of June 30, 2010 was $1,290,000 and we recorded a gain of approximately $1,797,000 for the three months ended June 30, 2010 as a result of the decrease in the fair value of the warrant liability from March 31, 2010.
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Curis Inc. has a market cap of $133.8 million; its shares were traded at around $1.77 with and P/S ratio of 15.6. CRIS is in the portfolios of Jean-Marie Eveillard of First Eagle Investment Management, LLC, Jim Simons of Renaissance Technologies LLC.
Highlight of Business Operations:
In July 2008, we selected CUDC-305, an Hsp90 inhibitor, as a development candidate from our targeted cancer programs. In August 2009, we granted a worldwide, exclusive royalty-bearing license to our Hsp90 inhibitor technology, including CUDC-305 to Debiopharm S.A., a Swiss pharmaceutical development company, or Debiopharm. CUDC-305 has since been renamed Debio 0932 by Debiopharm. Debiopharm has assumed all future development responsibility for Debio 0932 and Debiopharm or a Debiopharm licensee will incur all future costs related to the development, registration and commercialization of products under the agreement. During the first quarter of 2010, we received $8,000,000 from Debiopharm upon approval from French regulatory authorities of its clinical trial application, or CTA, to begin phase I clinical trials for evaluating the safety of Debio 0932 in patients suffering from advanced solid tumors or lymphoma. In April 2010, Debiopharm treated the first patient in the phase I clinical trial of this molecule, and we expect to receive an additional $3,000,000 payment from Debiopharm in the third quarter of 2010 that we earned upon Debiopharms treatment of the fifth patient in this phase I clinical trial.Offsetting these decreases, personnel costs increased $88,000 during the three months ended June 30, 2010 as compared to the same period in the prior year as the result of adjustment to our executive officers compensation in the first quarter of 2010 to eliminate the pay reductions implemented in October 2008. In addition, we accrued for non-officer bonuses and a 401(k) matching contribution in the 2010 period that we did not accrue in the 2009 period. Consulting and professional services increased $80,000 over the prior year period due to 2010 proxy-related matters, specifically related to our 2010 Stock Incentive Plan and our 2010 Employee Stock Purchase Plan, each approved by our shareholders in June 2010.
Change in fair value of warrant liability. In connection with our January 2010 registered direct offering, we issued warrants to purchase an aggregate of 1,612,322 shares of common stock, which became exercisable as of the closing of the transaction. The warrants have an initial exercise price of $3.55 per share and have a five year term. The fair value of the warrants was estimated at $2,181,000 on the January 2010 issuance date and $3,087,000 as of March 31, 2010, using a Black-Scholes option pricing model under various probability-weighted outcomes which take into consideration the protective feature of the warrants that includes a possible cash-settlement option available to the warrantholder in the event of a change of control until the later to occur of (i) two years from the date of original issuance of the warrant and (ii) the date upon which Genentech or Roche submits a new drug application (NDA) for GDC-0449. We applied the following assumptions assigned to the various outcomes: expected volatilities ranging from 69.8% to 80%, risk free interest rates ranging from 1.42% to 2.38%, expected lives of three to five years and no dividends. Expected volatility was based on our historical volatility commensurate with the term of the warrants. The fair value of the warrants was recorded as a long-term liability. The warrants will be revalued each reporting period with updated assumptions, and the resulting change in fair value of the warrant liability will be recognized in the income statement. We estimated that the fair value of these warrants as of June 30, 2010 was $1,290,000 and we recorded a gain of approximately $1,797,000 for the three months ended June 30, 2010 as a result of the decrease in the fair value of the warrant liability from March 31, 2010.
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