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Curis, Inc. (NASDAQ:CRIS)

Stifel Nicolaus Weisel Healthcare Conference Call

September 12, 2013 15:15 ET

Executives

Dan Passeri - Chief Executive Officer

Ali Fattaey - Chief Medical Officer

Analysts

Brian Klein - Stifel Nicolaus

Brian Klein - Stifel Nicolaus

We’ll get started with our next presentation. My name is Brian Klein. I’m one of the biotech analyst here at Stifel. And I want to thank you for joining me for a next presenting company we have Curis. And speaking today will be Dan Passeri, CEO and Ali Fattaey are there Chief Medical Officer. So thank you for joining us.

Dan Passeri

Thanks, Brian.

Brian Klein - Stifel Nicolaus

Great. So let’s get started with what I think is one of the most exciting programs that I have seen recently which is your new IAP Inhibitor and maybe we can just briefly run through the data that was so compelling that was presented at ASCO and then we’ll talk about next steps. Okay. What I would like to do if you are okay with this is any of the technical questions I would like to hand over to Ali. So that’s his primary role and he can give you a lot more depth than I can. So I’ll handle the overall questions with business.

Ali Fattaey

Okay. So thank you Brian and group here for attending the session. Thank you for your kind introduction me as a Chief Medical Officer. Actually I’m not an MD plus not a medical officer for the company although I acted like one for a period of time. We’ve actually just recruited a new Chief Medical Officer into the company Jaye Viner who is on the road right now actually setting up the trough for IAP antagonist that we are in the process of testing in various indications in the organization. So let’s thank you again for the opportunity to talk through this.

The IAP antagonist that we work with have gone into the Phase I clinical setting already this was a trial that was initiated and sponsored by Genentech and Roche prior to us licensing and acquiring the drug from them. What was important with the drug itself was that it was administered in patients as 42 that were enrolled using a daily treatment regimen. It is an oral drug and it was given as monotherapy on a daily basis and to our knowledge this also is a very first time that a monotherapy IAP antagonist has gone into the clinic had demonstrates it fairly impressive clinical benefit in the form of complete responses in two patients and also a partial response, mix response in a patient and multiple stable diseases. What became important for us and have really guided our development plan was this drug is the patients that responded so well to it namely the one of those patients with an ovarian cancer patient. We have just recently in July initiated a clinical study which is enrolling predominantly ovarian cancer patients and also patients with fallopian tube cancer. This is really to address the potential utility of the monotherapy drugs are given on a daily basis in that patients population.

The second patient that had a complete response have where the patient with multiple lymphoma. They had a test complete response in their status. What becomes interesting for us in the case of their multiple lymphoma is of course is that the multiple lymphoma are a form of non-Hodgkin lymphoma and there is high incidence of translocations that are common in the multiple lymphoma setting and one of those translocations involved the target of the gene IAP. It is one of the IAP genes that gets translocated to a different chromosome and forms a fusion protein.

The patients that had a complete response in our study also had a genetic alteration and so in the form of an amplification of the IAP gene in the as part of their disease which really lends itself at this point the two responses that we’ve seen one of them with the potentially clear genetic link to the alteration of the gene and secondly in the ovarian cancer setting where our trough has already started. We do intend to initiative the trial within this year as much as possible in the multiple lymphoma setting as well. So that is really the result we are very impressive unexpected and have really guided the development plan for the drug as well.

Brian Klein - Stifel Nicolaus

Great, great. Along those lines to round out the conversation about ovarian cancer will you able to find any specific chromosome or abnormality in a patient and is there any hint of which type of patient might be most beneficial for IAP?

Ali Fattaey

Right. It’s a very good question. I think the IAPs in general in a sense really continue to look for proof-of-concept in terms of benefit or more importantly what types of cancer patients as you said whether there is a genetic tie or other parameters that we can identify to help us identify those patients that may benefit. The ovarian cancer patients, that was in our study that had a complete response associated with their disease went public with their own status. She has indicated that she have a germline mutation in the BRCA1 gene locus that she had a very dramatic response in the study. We obviously are very keen to study this in the ovarian cancer study that we currently conducting to see whether there is a link between the BRCA1 status of patient and the response to this. At the moment there is nothing scientifically that we can rationally peace together to say yes this pathway can potentially interact with the DNA damage repair and or BRCA1 function or BRCA gene function in a setting how there if we feel that is best to go ahead and tested in the clinics even though we are conducting some preclinical study or we should get firm data from this current clinical study that’s ongoing at the moment.

Brian Klein - Stifel Nicolaus

So the Phase II that you started isn’t an unselected relapsed/refractory patient population that’s already been treated with frontline chemotherapy. Will you be doing those chromosome analysis on patients?

Ali Fattaey

Yes. The patients will be genetically typed for a number of various factors that we’re quite interested in of course any patient is very important for us to identify a number of parameters and in this case including the BRCA gene test.

Brian Klein - Stifel Nicolaus

Great. Okay. And in the past you’ve indicated that perhaps the greatest benefit that we might see with in IAP inhibitor is going to be in combination therapy. As you continue to drop the drug are there particular types of combinations that are more feeling than others are there certain types of agents that are able to induce apoptosis and or metastasis type therapy?

Ali Fattaey

And again excellent point and yes this is very much inline with our thinking. The development of IAP antagonist certainly within the context of what Genentech was developing for a number of years having worked on this and was really are the beneficiary of many years of where research and preclinical and clinical package so we enlightened. Points to the highest potential for the use of IAP antagonist in combination to set up the cell for receiving signal for apoptosis and IAP antagonist synergizing with that and removing the barriers to apoptosis induction. One of the settings that lends itself very well to that is in the breast cancer setting. And in particular in breast cancer in combination with the drug for primitive drug Capecitabine or Xeloda, the things that we’ve seen preclinically Genentech have seen that and we have also received this in the preclinical setting so because the drug hasn’t been tested with Capecitabine in the clinic yet. Is that Capecitabine is very protein chemotherapy drug at inducing the one of the IAP proteins expression in cells in cancer cells and in particular in some subsets of breast cancer.

Brian Klein - Stifel Nicolaus

I just want to judge putting this is an triple negative question so this in receptor positive?

Ali Fattaey

It’s a good point I mean we tend to think about breast cancer in the context of the hormone or HER2 gene status. I don’t think it is necessarily tides with the way that we currently sub divide or classify breast cancer in terms of the HER2, HR.

Brian Klein - Stifel Nicolaus

Well said.

Ali Fattaey

Yes what their prolactin receptor or other receptors it is clearly not necessarily linked to their hormone or HER2 gene status. It is something beyond that at this point which starts takes some amount of more work for us to do but we do see fairly petulantly that Capecitabine or Xeloda is able to induce the IAP genes in these and what’s important and I think this is really the driver for why we look at breast cancer in the context of Xeloda combination with our IAP antagonist that induced all that Capecitabine is able to induce IAP those are the same cells that synergize extremely well in the combination with our drug and this really set us up as to for the first time to take in this case our drug in combination with Capecitabine into the breast cancer settings. Now we have selected to do this in the HER2 negative population that’s the population that more commonly Capecitabine has used them. And we will include – our plan is to include or if not exclude I should say necessarily whether the patients has a HER2-positive – the positive heterogeneous hetero positive or whether they’re triple-negative. I don’t – we don’t see it falling in those categories therefore not trying to exclude or include patients based on their estrogen-receptor status at this point.

One other point I want to make and actually as an important part of our drug is that Genentech had sent quite an amounts of resource to optimize and develop this compound as a molecule that we able to be given on a once daily regimen. That’s a unique feature amongst IAP antagonist to be able to give that drug in an oral form effect. And secondly, certainly in the context that we look at developing the drug that daily administration of the drug certainly in the context of Xeloda is important for inhibition of the IAP’s protein within that. Therefore, it’s not only the drug itself what it is but the regimen that we administer the drug and in our case on a daily basis is an important aspect of how the drug is going to be developed. And I think that’s one of the distinguishing features about this drug versus their rest of the field of discipline.

Brian Klein – Stifel Nicolaus

Great. And just to complete the picture of the breast cancer program. Will you also be looking at your case status?

Ali Fattaey

That’s a very good point. The study that’s ongoing currently that was started in July, that looks predominantly ovarian and fallopian tube cancers is also allowed to enroll breast breast cancer patients and we will look at that in that setting. And certainly in our current plans are in the breast cancer study as well look at the bulk aesthetic. As you know every patients is very important to us from both our treatment perspective but also our learning perspective for a new drug. So, we were very much appreciate patients that allow us to examine not only the effect of our drug but their own the status of the patient and their cancer to make these correlations and we do appreciate that and we will continue to do this.

Brian Klein – Stifel Nicolaus

Perfect. Great. Dan, anything to add on the program?

Dan Passeri

Yeah, I think what I’d like to underscore is from the attractiveness of the model and where our IAP antagonist fits in. This is a program represent a number of opportunities. So, as you just addressed on the translational side it has the potential as a precision medicine so we’ve already had complete responses in our one patient each of ovarian and MALT lymphoma. If we have one more response like that I think it really starts to look very exciting because we could have fast track in one of those indications of the monotherapy. Comparatively, this field is starting to gain some attention. We have a number of companies developing IAP inhibitors. And then we have the combination trial which is how the drug was initially designed to be used with Xeloda and in the setting of breast cancer. So, we have three separate trials that we can survey and investigate the prospects of this drug.

We view it almost as a de-risked asset and the fact that Genentech it’s a vintage Genentech program with a really elegant and really clean dataset. As you know Genentech follows to it very clearly. Phase 1 shows the drugs well tolerated, it can be dose daily, a lot of work went into designing this drug. It appears to be very well tolerated. We’re clearly suppressing IAP both cIAP and XIAP. So, we think this is an important value of proposition for the company and it fits in very well and that are balancing of the business model and their attractiveness cares us an investment prospect.

Brian Klein – Stifel Nicolaus

Great. When we will see the next dataset?

Ali Fattaey

So, the ongoing target initiated in July focused primarily on ovarian cancers. Our estimates are that it probably appropriate for an ASCO presentation in the next year. We do intend to initiate a study in the lymphoma assessing later this year as we indicated, so it’s probably closer to the end of 2014 for that study. The breast cancer study is about to get started fairly shortly. The more difficult to describe that, that that’s based on the design of it because we maintain – that falls in a randomized fashion and not to be able to present that if there are initial data that come out of it again possibility at ASCO next year that’s going to come out of it.

Brian Klein – Stifel Nicolaus

Perfect. We’ll look over to those data presentations. Great.

Ali Fattaey

Thank you. Okay.

Brian Klein – Stifel Nicolaus

I want to move on to your HDAC platform specifically the HDAC PI3K combination, maybe you can give us an update on what’s going on there?

Ali Fattaey

Sure. I can maybe introduce the drug again and tell you where we are with it. It is correct that drug is engineered and designed to contain both a PI3 kinase inhibitory molecule as well as a distinct HDAC inhibitory molecule associated with it. The – on the PI3 kinase side it targets predominantly PI3 kinase Alpha and Delta, very little Beta inhibition and no inhibition of PI3 kinase Gamma. And on the HDAC inhibitory side, it targets both Class I HDACs 1, 2 and 3 as well as Class IIB HDAC 6 and HDAC10 which we believe are important in different functions.

The drug itself is currently in the Phase 1 setting, one other things that we find with it in when we insert the drug into patient is that the dual active drug which contains both Potent PI3 kinase and HDAC is rapidly metabolized to a form of the drug that retains only the PI3 kinase active form, number one. And number two, the PI3 kinase active form has a relatively long half-life in patients and that half-life happen through beyond 24 hours.

One of the key things that we have been wanting to address in terms of how to optimize giving this drug is what balance or what ratio of HDAC inhibition and how long of an HDAC inhibition we would like to see in patient while at the same time how long and how continuous to want to maintain the PI3 kinase inhibitory activity. What we find in this case is based on the metabolic profile of the drug that the HDAC inhibitory activity is relatively short lift but very potent. Whereas the PI3 kinase activity primarily driven by the metabolized that’s produced is accumulative fairly high level and seems to have a very long half-life within the patient.

Based on this, we have – we’ve initiated the current Phase 1 clinical study and escalated the dose using a once daily dosing regimen of the drug. Having recognized the PK parameters that are different between the parent and the metabolite and the metabolic profile of the drug, we opted to actually introduce additional dosing regimens within the same trial where now we are enrolling patients not only in the continuous dosing regimen but also a more intermittent dosing of schedule of every other day as well as one that’s administers the drug twice a week.

And that’s really has given us quite a bit of possibility now to be able to not only enroll larger number of patients but also see which one of these would be the optimal regimen to give us the – again the optimal balance between HDAC inhibitory activity and PI3 kinase, while at the same time alleviating any adverse events that may appear with the administration of it. On the safety side of it, the drug we have a continuous daily regimen of the drug. We have observed and we expect the side effects for HDAC for example thrombocytopenia, we’ve observed that in many of the patients. We’ve also observed diarrhea associated with some of the patients, none of them have been of a significant level but those are the expected side effects that we see with the patients.

We are very much looking forward with these other regimens and the dose escalations ongoing to find the optimal dose as well as regimens that provides us the best efficacy, best bio market response and of course that has – our ideal clinical benefit for the patients. Timeline wise, we do intend to present some of whatever is available from our Phase 1 study including all three regimens that are currently in rolling at ASH we have an abstract submitted for ASH, we’ll find our shortly hopefully whether the abstract has been accepted. Our intent is to present it at ASH this year and also of course learn as much as we can from those regimens and those finding by the time of ASH. If I’d not mentioned this, the study I apologize, the study enrolls only lymphoma patients and multiple myeloma patients at this time.

Brian Klein – Stifel Nicolaus

Okay, okay. So, PI3K isn’t pretty crowded space right now and there is a lot enthusiasm until we have just filed for approval they’re about a – as you look at the compound that you have in the clinic and the dual moiety that it targets. Is, do you find that you have the ideal chemical background or the chemical structure that you’re looking for. Do you think you might have to go back to clinic and retool some of the primers of the product?

Dan Passeri

Yes. So it’s a very good question. First of all we feel very fortunate to work with the drug and the drug has very good absorption properties and had good PK associated with enrollment and actually we can administer the drug which is in a way it’s innovative drug first time that we’re combining two different inhibitory axillaries in one so I think we’ve got a small victory that we like to hitch off at this point.

Secondly with regard to the activity of the drug and specific indications and as we indicated the PI3 kinase fields itself. Some of the clinical benefits (inaudible) good clinical benefit that we see right now is seen with the PI3 kinase delta inhibitors as you mentioned with the an illicit drug that’s been developed by Gilead and very good benefit in ambulance, non-Hodgkin lymphomas and that of cancers. Based on the inhibitor (inaudible) that our drug brings in mainly both PI3 kinase alpha and delta but more importantly the HDAC activity that come. We think it lends us of very greatly to other indications beyond ambulance and non-Hodgkin’s lymphoma and in particular one of the indications that we’ve had some good experience with pre-clinically and of course, we enrolled those patients in our clinical studies for example with multiple myelomas.

Multiple myelomas as you know don’t necessarily express so these are receptor or BCC or PI3 kinase self dependency however HDAC inhibitors have good benefit and they are clinically not approved and the multiple myelomas do respond fairly well to PI3 kinase alpha in addition. But one of the indications, where we see mechanistically the dual activity of our drug and the specific PI3 kinase as well as the specific HDAC that we have those activities may converts very well in indications, indications in multiple myeloma as oppose to where some of the PI3 kinase delta inhibitors (inaudible) system.

Brian Klein - Stifel Nicolaus

So, you are involving at your own niche.

Dan Passeri

Since we like to see that yes that and that’s correct it’s not we like to say that we only go after indications for all those irons but the philology of the drug is leading us there. Some of the anecdotal benefits in patients at the moment that we’re seeing some of the early arm patient also the multiple myeloma patient benefiting also leads us in that direction. We also have done quite bit of work pre-clinically in the lymphoma setting, diffuse large B-cell lymphomas for example. And we seem to have a good effect in there as have had are the HDAC inhibitor in that setting. So, you are correct that the dual activity and the mechanism of the drug may take itself into indications that are not simply addressed by PI3 kinase delta inhibitors.

Brian Klein - Stifel Nicolaus

What about solid tumors?

Dan Passeri

Very, very good question again. Again we allow the biology and the mechanism of the drug take us to that direction. One solid tumor indication that we have very keen interest in initiating a study and doing an amount of preclinical working now for example is in estrogen receptor positive breast cancer setting. If we look in general at the breast cancer setting, PI3 kinase alpha mutations are very prevalent in the ER positive and not present in the ER negative population of the patient. So, there is an accumulation of the mutations that drive potentially that tumor. Separately in the ER positive setting, HDAC have been tested a number of different HDAC have been tested and (inaudible) to affect estrogen-receptor signaling itself and potentially maintaining that estrogen-receptor positive event phenotype. Once again the two activities of our drug CUDC-907 are targeting HDAC as well as PI3 kinase inhibitor, PI3 kinase alpha inhibition may lend itself very directly into that population.

So, as you can see, we really are trying to be very mechanism based allow some of our preclinical work to lead us and select indications that may uniquely take advantage of the dual activity of this drug. So, we do intend to initiate a solid tumor study as well. We would like to learn as much as we can from the currently running study in the hematologic setting regarding the dose and regimen and optimizing that first before proceeding to the solid tumor stuff.

Brian Klein - Stifel Nicolaus

Dan anything to add there?

Dan Passeri

Yes. Thanks, Brian. Just a slight overview, no need to repeat what’s been said, 907 is relevant from investors’ perspective of that. As you stated PI3 is a pretty hard space right now but also a very crowded and competitive space, a lot of companies going after similar indications. 907 has some really nice competitive attributes. It’s a distinct molecular entity having most components built into it. We think also this is a de-risk asset from the standpoint of two validated targeted molecules going after PI3 alpha, delta as well as HDAC. We have a number of indications. We are focusing on. We are very encouraged by what we have seen to-date. At the lowest starting dose and typically you got to ramp up as fast as possible. What we were surprised by and very pleased with was the fact that the early starting doses we saw the buildup of a metabolite that we saw in mirroring models but not in (darks) pre-clinically. So, we didn’t know how this will play out clinically and it’s a very important attribute.

We are clearly hitting HDAC with this lower dose, that are very potent and robust level, we’re seeing ease indicative of HDAC inhibition and we’re seeing a buildup of this metabolite that’s much as more stable. So even at the lowest doses, we may be at efficacious ranges with PI3. We don’t know quite yet how much it’s building up because we just amended the protocol to do blood testing later on in the cycle. We have two patients still on drug from the earliest dose one has been on for almost nine months now up to 10 cycle with multiple myeloma and another patient with diffuse large B cell lymphoma going into the – they are in the six cycle now its about five months.

And what’s important about that is those are two tumor types we predicted from preclinical models. So, I think we have competition position engulf from the molecule itself. We have strong IP, costs benefit obviously. And I think the amendment allowing dosing flexibility in terms of the scheduling gives physicians the ability to look at different dosing schedules. So, we think we’re very well positioned and right now we’re looking forward to data that’s very exciting between 907 and 427 we have two very promising assets that are add back sort of key inflection point. We are very well positioned right now.

And we have positive assets going to protecting investors from potential downside that kind of defined to floor going forward. So, we are just in a very good position. Curis is a very different company today than it was a year ago and how this underscore on the clinical side we built a very impressive team with the hiring of the new Chief Medical Officer Jaye Viner. She has a wealth of experience in targeted therapies, clinical design and experience (inaudible). So she shifted the center of gravity into clinical trial and capacity and expands that out quite significantly over the coming 6 to 12 months okay.

Brian Klein - Stifel Nicolaus

We’ll look for that data at ASH. Thanks. So, in the last two minutes just want to briefly turn to Erivedge, which is your currently commercialized product partnered with Roche and Genentech. Can you give us an update on when we might see the second and third cohorts for nodular basal cell cancer?

Dan Passeri

Yes. So, this is obviously important to gain insight on mechanism, survey. This is really viewed as a follow-up study by Roche to really understand how the drug is working. We are going to use it as a teaching tool for dermatologists. The data has been completed and analyzed. We are hoping the data would be released this October. Genentech notified us that they are going to hold off until Q1 because they want to present it at a more significant form as oppose to a small form so we agree with that. So, that will be in Q1 so that was the rationale for holding off until that point. They wanted to have a better form to present the data.

Brian Klein - Stifel Nicolaus

Great. And as the approvals in various countries that needs to pileup can you give us a sense of the launch and the trajectory for sale?

Dan Passeri

Yes. So, we have been in discussions with Genentech on an ongoing basis. We are very impressed with their commitment to the program. They just stated Roche is launching this globally. There are approximately 100 reps dedicated in the U.S. alone and that continuing to expand with global launches. The sales have increased approximately little greater than 20% per quarter. I think it should be viewed as the launch was 2013 as opposed to 2012 because in 2012 that was based on pivotal Phase II. Dermatologists are very conservative as a group so it’s been an education process. I think, we are really bolstered by what we are seeing this year and we’re on track with what our own internal expectations are for this year.

Genentech and Roche haven’t provided sales forecast guidance so I can’t provide that right now, but we’re very encouraged by what we’re seeing. And I think what I would like to underscore is Erivedge is no longer the asset we are focusing on because we’re involving as a company and it’s no longer deciding the upside potential. We view it now really is providing investors is protection and defining the floor, which is increasing over time. So, as we continue to mature and involve as a company this should be a more and more attractive investment opportunity.

Brian Klein - Stifel Nicolaus

Thank you. With that, we are out of time.

Dan Passeri

Thanks, Brian.

Brian Klein - Stifel Nicolaus

Maybe I appreciate you attending. Thanks so much.

Dan Passeri

Thank you, Brian.

Question-and-Answer Session

[No Q&A session for this event]

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