Curis Reports Second Quarter 2003 Results
Wednesday July 30, 8:44 am ET
CAMBRIDGE, Mass.--(BUSINESS WIRE)--July 30, 2003--Curis, Inc. (NASDAQ:CRIS - News), a therapeutic drug development company, today reported its financial results for the quarter ended June 30, 2003.
For the second quarter of 2003, the Company reported a net loss applicable to common stockholders under accounting principles generally accepted in the United States (GAAP) of $5,039,000 or ($0.15) per share, as compared to a net loss of $71,173,000 or ($2.20) per share for the prior year period. Excluding stock-based compensation, amortization of intangible assets, the accretion of a mandatory preferred stock dividend, impairment of goodwill (2002 only), and impairment of property and equipment (2002 only), the non-GAAP net loss applicable to common stockholders for the three-month period ended June 30, 2003 was $4,274,000 or ($0.13) per share, as compared to a net loss of $6,242,000 or ($0.19) per share for the prior year period.
Revenues for the second quarter of 2003 were $549,000, as compared to $190,000 for the second quarter of 2002. The increase in revenues for the second quarter of 2003 was primarily due to revenue recognized by the Company under its collaboration with ES Cell International. In addition, the Company began to recognize revenue related to its collaboration with Genentech.
Operating expenses for the second quarter of 2003 were $5,759,000, as compared to $70,483,000 for the second quarter of 2002, a decrease of $64,724,000, or 92%. A majority of this reduction is attributed to a non-cash charge for the impairment of goodwill of $64,098,000 recorded during the second quarter of 2002.
The Company did not record a loss relating to Curis Newco, a joint venture formed in July 2001 between the Company and affiliates of Elan Corporation ("Elan"), for the second quarter of 2003, as compared to $1,078,000 for the second quarter of 2002. On May 16, 2003, the Company announced that it had reached an agreement with Elan to conclude this joint venture.
As of June 30, 2003, Curis' cash and investments were $34,762,000. As of June 30, 2003, there were 36,312,349 shares of common stock outstanding.
Dr. Christopher Missling, Curis' Chief Financial Officer commented, "We have continued to exercise fiscal restraint in all of our operations, enabling us to stabilize the burn rate. In addition to the $34,762,000 in cash and investments held by Curis at June 30th, we received a $5,000,000 cash payment from Genentech in July 2003 related to our collaboration. Our strong cash position allowed us to make considerable progress in our programs during the second quarter."
Daniel Passeri, Curis' President and Chief Executive Officer said, "In the second quarter, we have made great progress -- we had several important patents issued, we had several significant scientific publications, and we resolved the Elan partnership. Most importantly, we added Genentech to our list of top-tier drug development partners. We believe that all of this has contributed to a substantial rise in shareholder value, providing further validation to the business plan that we put into place during 2002. Going forward, we expect to advance our drug development technologies and enter into additional partnerships with co-development opportunities in order to build additional value for our shareholders."
For the six-month period ended June 30, 2003, the Company reported revenue of $984,000 and a net loss applicable to common stockholders on a GAAP basis of $9,509,000, or ($0.29) per share, versus revenue of $348,000 and a net loss of $89,176,000, or ($2.76) per share, for the six-month period ended June 30, 2002. For the six-month period ended June 30, 2003, the Company recorded a non-GAAP net loss, excluding non-cash charges of $1,228,000, of $8,281,000, versus a non-GAAP net loss, excluding non-cash charges of $71,043,000, of $18,132,000, for the six-month period ended June 30, 2002.
Pro Forma Results
Curis reports pro forma Non-GAAP net loss applicable to common stockholders, which excludes certain non-operational, non-cash and specified other charges that management generally does not consider in evaluating the Company's ongoing operations. These results are provided as a complement to reported results determined in accordance with GAAP. Management believes this pro forma measure helps indicate underlying trends in the Company's business and uses this pro forma measure to establish budgets and operational goals, to manage the Company's business, and to evaluate its performance. A reconciliation of pro forma to GAAP results is included as an exhibit to this press release.
CURIS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
Three months ended Six months ended
June 30, June 30,
2003 2002 2003 2002
------------ ------------- ------------ -------------
Revenues $548,942 $189,603 $984,300 $348,235
------------ ------------- ------------ -------------
Operating
expenses:
Research and
development 3,592,678 3,902,554 6,598,159 8,737,317
General and
adminis-
trative 1,492,221 1,829,752 2,934,813 4,541,091
Stock-based
compensation 655,328 427,433 919,194 1,124,895
Amortization
of
intangible
assets 18,771 60,405 37,542 120,810
Impairment of
property and
equipment - 164,842 - 5,336,785
Impairment of
goodwill - 64,098,345 - 64,098,345
Realignment
expenses - - - 3,490,000
------------ ------------- ------------ -------------
Total
operating
expenses $5,758,998 $70,483,331 $10,489,708 $87,449,243
------------ ------------- ------------ -------------
Net loss from
operations $(5,210,056) $(70,293,728) $(9,505,408) $(87,101,008)
------------ ------------- ------------ -------------
Equity in loss
from joint
venture - (1,078,223) - (2,239,906)
Other income,
net 262,264 378,764 267,812 527,688
------------ ------------- ------------ -------------
Net loss (4,947,792) (70,993,187) (9,237,596) (88,813,226)
Accretion on
Series A
convertible
exchangeable
preferred stock (91,081) (180,225) (271,306) (362,453)
------------ ------------- ------------ -------------
Net loss
applicable to
stockholders $(5,038,873) $(71,173,412) $(9,508,902) $(89,175,679)
============ ============= ============ =============
Basic and
diluted net
loss per common
share $(0.15) $(2.20) $(0.29) $(2.76)
============ ============= ============ =============
Basic and
diluted
weighted
average common
shares
outstanding 33,501,511 32,334,965 32,621,151 32,332,113
============ ============= ============ =============
CURIS, INC.
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
June 30, December 31,
2003 2002
-------------- --------------
ASSETS
Cash, cash equivalents and marketable
securities $30,569,767 $36,573,276
Cash and cash equivalents - restricted 4,191,951 4,403,188
Accounts receivable and long-term
receivables 10,177,806 5,109,406
Property and equipment, net 3,022,418 3,775,269
Intangible assets, net 9,196,731 9,234,273
Other assets 2,120,920 3,346,281
-------------- --------------
Total assets $ 59,279,593 $ 62,441,693
============== ==============
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable and accrued expenses $4,680,876 $6,266,068
Debt and capital lease obligations,
excluding convertible debt 4,755,915 5,529,471
Convertible debt 5,145,096 6,885,486
Deferred revenue 17,041,814 12,154,006
-------------- --------------
Total liabilities 31,623,701 30,835,031
-------------- --------------
Series A convertible exchangeable
preferred stock - 13,064,283
-------------- --------------
Total stockholders' equity 27,655,892 18,542,379
-------------- --------------
Total liabilities and stockholders'
equity $59,279,593 $62,441,693
============== ==============
CURIS, INC.
RECONCILIATION OF PRO FORMA RESULTS AND GAAP RESULTS
(UNAUDITED)
Three months ended
June 30,
2003 2002
-------------- ---------------
Net loss applicable
to common
stockholders,
excluding stock-
based
compensation,
amortization of
intangible assets,
accretion of a
mandatory
preferred stock
dividend, and
other non-cash
items $ (4,273,693) $ (6,242,162)
Adjustments to
reconcile to GAAP
net loss
applicable to
common
stockholders:
Stock-based
compensation (655,328) (427,433)
Amortization of
intangible
assets (18,771) (60,405)
Accretion on
Series A
Convertible
Exchangeable
Preferred
Stock (91,081) (180,225)
Impairment of
goodwill - (64,098,345)
Impairment of
property and
equipment - (164,842)
-------------- ---------------
Net loss applicable
to common
stockholders, GAAP
Basis $ (5,038,873) $ (71,173,412)
============== ===============
Net loss per common
share, excluding
stock-based
compensation,
amortization of
intangible assets,
accretion of a
mandatory
preferred stock
dividend, and
other non-cash
items $ (0.13) $ (0.19)
Adjustments to
reconcile to GAAP
net loss
applicable to
common
stockholders:
Stock-based
compensation (0.02) (0.01)
Amortization of
intangible
assets - -
Accretion on
Series A
Convertible
Exchangeable
Preferred
Stock - (0.01)
Impairment of
goodwill - (1.98)
Impairment
of
property
and
equipment - (0.01)
-------------- ---------------
Basic and diluted
net loss per
common share $ (0.15) $ (2.20)
============== ===============
Six months ended
June 30,
2003 2002
-------------- ---------------
Net loss applicable
to common
stockholders,
excluding stock-
based
compensation,
amortization of
intangible assets,
accretion of a
mandatory
preferred stock
dividend, and
other non-cash
items $ (8,280,860) $ (18,132,391)
Adjustments to
reconcile to GAAP
net loss
applicable to
common
stockholders:
Stock-based
compensation (919,194) (1,124,895)
Amortization of
intangible
assets (37,542) (120,810)
Accretion on
Series A
Convertible
Exchangeable
Preferred
Stock (271,306) (362,453)
Impairment of
goodwill - (64,098,345)
Impairment of
property and
equipment - (5,336,785)
-------------- ---------------
Net loss applicable
to common
stockholders, GAAP
Basis $(9,508,902) $ (89,175,679)
============== ===============
Net loss per common
share, excluding
stock-based
compensation,
amortization of
intangible assets,
accretion of a
mandatory
preferred stock
dividend, and
other non-cash
items $ (0.25) $ (0.56)
Adjustments to
reconcile to GAAP
net loss
applicable to
common
stockholders:
Stock-based
compensation (0.03) (0.04)
Amortization of
intangible
assets - -
Accretion on
Series A
Convertible
Exchangeable
Preferred
Stock (0.01) (0.01)
Impairment of
goodwill - (1.98)
Impairment
of
property
and
equipment - (0.17)
-------------- ---------------
Basic and diluted
net loss per
common share $ (0.29) $ (2.76)
============== ===============
About Curis, Inc.
Curis, Inc. is a therapeutic drug development company. The Company's technology focus is on regulatory pathways that control repair and regeneration. Curis' product development involves using proteins or small molecules to modulate these pathways. Curis has successfully used this technology and product development strategy to produce several promising drug product candidates in the fields of kidney disease, neurological disorders, cancer, and alopecia (hair loss). For more information, please visit the Curis web site at www.CURIS.com.
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements about Curis' future operating results and the advancement of its current corporate partnerships, other potential future partnerships and its drug discovery and development programs. Such statements may contain the words "believes", "expects", "anticipates", "plans", "seeks", "estimates" or similar expressions. These forward looking statements are not guarantees of future performance and involve risks, uncertainties, assumptions and other factors that may cause Curis' actual results to be materially different from those indicated by such forward-looking statements. Actual results can be affected by a number of important factors including, among other things, adverse results in Curis' and its strategic partners' product development programs, difficulties or delays in obtaining or maintaining required regulatory approvals, Curis' ability to obtain or maintain patent or other proprietary intellectual property protection, changes in or an inability to execute Curis' realigned business strategy, Curis' need for additional funding to conduct research and development of its product candidates, Curis' ability to enter into and maintain important strategic partnerships and other risk factors identified in Curis' most recent Annual Report on Form 10-K, Quarterly Report on 10-Q and any subsequent reports filed with the Securities and Exchange Commission. In addition, any forward-looking statements represent the Company's views only as of today and should not be relied upon as representing its views as of any subsequent date. Curis disclaims any intention or obligation to update any of the forward-looking statements after the date of this press release whether as a result of new information, future events or otherwise. This press release also contains financial measures which are not prepared in accordance with GAAP and which should not be construed as superior to GAAP financial measures.
Contact:
For Curis, Inc.
Christopher U. Missling, Ph.D.
Chief Financial Officer
617-503-6587
or
Marc F. Charette, Ph.D.
Vice President, Corporate Communications
617-503-6629
Source: Curis, Inc |
