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Curis, Inc. (NASDAQ:CRIS)

Oppenheimer Healthcare Conference Call

December 11, 2013 14:45 ET

Executives

Dan Passeri - Chief Executive Officer

Unidentified Analyst

So the next company to present is Curis. And it’s my pleasure to introduce the CEO of Curis, Dan Passeri.

Dan Passeri - Chief Executive Officer

Thanks for us. Welcome everyone. First, I want to thank Oppenheimer for giving us the opportunity to present. And just to remind that, Curis is a NASDAQ listed symbol, CRIS. I also want to welcome everyone listening in in the web. The presentation may contain some forward-looking statements and I want to start off just as an overview of the pipeline and context. In this presentation, I think the most important thing that I cover today is to give context and an overview of our take on the ASH data. There has been quite a response to the data that was presented and I believe that there is not really an appreciation of the context of what we are trying to communicate here. So I want to make sure I elaborate on that in quite a bit of detail and go over the fact pattern and to provide again context of why we are encouraged by what we are seeing.

I am going to be focusing principally on 907 and 427. This presentation will be up on our web. So I have a whole presentation anyhow, but for purposes of today, I am going to be focusing mostly on the top two assets and then give a brief overview of Erivedge. So I am going to start off with CUDC-907, which is our inhibitor, small molecule inhibitor of PI3 kinase and HDAC. This was a topic of an ASH poster. I think there has been quite a recoil in the stock price. I think by and large there was an expectation that there would be more substantive data and I want to give context on that data and the facts that support our position and I apologize if I was not clear through prior presentations, but I thought I actually had been providing context leading into ASH.

So just to summarize, CUDC-907 is a first-in-class, actually only in class, potent dual inhibitor of both PI3 kinase signaling enzymes kinases as well as HDAC. And that’s very important in terms of its mechanism and how it’s differentiatable over PI3 kinase inhibitors that are currently being developed for hematological indications. So on the preclinical highlights, why this drug has attributes that we believe will have promising benefit clinically is that it’s not only a potent inhibitor of alpha and delta, two principal drivers and demonstrated in both hematological cancer that alpha has also been implicated in number of solid tumors.

But through the HDAC moiety, so we are blocking primary signal transduction and that’s with an ATP molecule donating the phosphate, the PI3. So our compound binds in that pocket effectively and prevents that donation of phosphate from occurring. So we are blocking signal transduction. And then with HDAC, we have demonstrated in a number of models that we are also blocking compensatory bypass mechanisms. And that’s where we believe the real synergy is achieved. And we have demonstrated that our molecule not only blocks PI3 kinase and downstream phosphorylation of AKT, but through that blockage, you then don’t see emergence of MEK, which is what you will use if you use just a PI3 kinase inhibitor and that’s an importance escape mechanism. So fundamentally, that is the logic of why we are developing this drug.

Now, I am going to get into the characteristics of the drug and what we have seen today and why we are bolstered by the clinical data that we are observing in these early surveys. The drug is also demonstrated to be active in a number of hematological malignancy models and we are involved in by the fact that we are seeing signal clinically. The clinical highlights, is the Phase 1 trial is ongoing. We started with a daily dosing. And just to remind everyone, we amended the protocol in the summer to then allow for intermittent dosing and that was based on what we were observing with the drugs PK, it’s PD and what we know about those two targets. So I want to really elaborate upon that brief context to the data that was just presented at ASH. So this intermittent schedule where we have twice weekly and three times weekly is meant to be able to achieve higher dosing levels to increase the Cmax and the AUC than we are able to achieve with the daily schedule. The daily schedule we saw adverse events indicative of target suppression for HDAC, namely GI effect. And just to remind everyone, there are no HDAC inhibitors on the market that you give daily because of side effects. So and it has a prolonged PD effect, so I am going to elaborate on that in a moment.

So again, the side effects that we have observed are consistent with target inhibition. So we haven’t seen anything unanticipated and we have preliminary evidence of anti-tumor activity at these suboptimum dosing levels and schedules that we have had. So we have one partial response of a 70% reduction in a diffuse large cell B-cell lymphoma. And again, that’s very encouraging, because that is one of the tumor types that we identified a year ago that we wanted to hone in on based on preclinical studies. And seven stable diseases, that’s 8 out of 11 evaluable patients, we saw clinical benefit, to remind everyone, again at suboptimal dosing. So we are very encouraged by this. Now, the stable disease, the majority of them are showing tumor shrinkage.

The dose escalation we are anticipating on these intermittent dosing schedules to be completed in the first half of 2014 and then we will anticipate a dose expansion and focusing on diffuse large B-cell lymphoma and multiple myeloma. Again, these are the two indications we have stated from the beginning that we wanted to focus on, because we felt that, that is where our drug would have differentiatable and demonstrable benefit over existing PI3 kinase inhibitors, which everyone is aware have shown very promising results in certain lymphoma types. We are not competing where they have already demonstrated significant efficacy. We are going after indications that are presently not well-served. And to remind everyone, none of these PI3 kinase inhibitors have shown impressive efficacy data in diffuse large B-cell lymphoma or multiple myeloma. So that’s why we are focusing on those two.

And again, we then look at the Phase 2 testing for those two indications projected for the second half and late in 2014. So I just want to give you again some context just to remind everyone of this drug’s characterization, characteristics and PK profile. So the parent compound, which is 907, has both a PI3 moiety and again that moiety binds to the ATP binding pocket of the kinase near the cell membrane. So that’s a competitive binding, where you need to saturate target. If the drug is not there, ATP is going to bind, donate its phosphate, you get signaling. So the objective there is to dose at the highest levels you can achieve PI3 suppression.

The HDAC side suppresses series of enzymes that deacetylate and that is involved in activation and inactivation of existing proteins in the Class 1 effect transcriptional access. The key on that suppression is you do not want to have constant steady state suppression, because you will have too much toxicity. When you block HDAC activity, you can do it in a short pulsatile manner and you have a prolonged PD effect. And that is what we were trying to ascertain in the early parts of this study and that’s why we are so encouraged by what we have seen. We have demonstrated that this drug, the parent effectively blocks both targets. If you look at the IC50s for HDAC, it’s a very potent HDAC inhibitor. Well, it turns out this is why the daily dosing even at 30 milligrams everyday we are seeing tox effects from the HDAC, but we are also seeing clinical benefit at that suboptimal dose. Now, what’s relevant is when it’s metabolized you have this M2, you see in the lower right hand quadrant, that metabolite retains PI3 activity. And that’s important because that metabolite hangs around. It’s very stable. It has a T half of what we think is between 24 and 48 hours. So that metabolite will continue to bind to and block PI3 signaling. So the key here is to learn the optimum dosing and the optimum scheduling with this drug to take advantage of these two activities, so that we are blocking PI3 signaling and the compensatory bypass.

So another attribute that we have seen and we think it’s an attribute is the fact that the compound, the parent is depositing in tissue. You do not detect high levels of the parent in plasma. You see much higher levels in tissue. And what’s relevant about that, particular in lymphoma and multiple myeloma is you want to see it in bone marrow and in lymph nodes. In fact, we can detect high levels of the parent in the bone marrow and in the lymph nodes. Now, the compound, the parent is metabolized over time, where M2 is released. In M2, you don’t see a differential between tissue and plasma. You can detect the levels of M2 in the plasma, but you don’t see the parent in the plasma the way that you see M2. Now, this is from animal models and we have clinical data that appears to emulate this. Again, this is quite relevant and that’s why we felt the ASH data in the poster is very positive.

So in the Phase 1 dose escalation trial, we are treating refractory relapsed lymphoma or multiple myeloma. The design is obviously a dose escalation of this oral administration and it’s to treat until we see disease progression or unacceptable toxicities. And we have again, this was in the summer time we amended the protocol, we have three different dosing schedules under investigation, because of the nuances and distinct behavior of this compound is basically an active parent and then an active pro-drug. We don’t want HDAC activity prolonged. You want to pulsatile for prolonged PD. So we are pleased with the fact that the parent has a shorter T half, but we did see with the everyday dosing, we are seeing HDAC side effects, but it’s encouraging that even after suboptimal dose of 30 milligrams, our starting dose, we see clinical benefit and we had a 70% PR in diffuse large B-cell lymphoma. So the once daily we started at 30 milligrams and escalated to 60 milligrams. At the 60 milligrams, we had a patient that had a DLT after couple of weeks of daily exposure. So escalations completed with the daily, I remind everyone we continue to treat patients on that daily schedule. We have a multiple myeloma patient that is now in the 11th month of stable disease. And this was a refractory advanced multiple myeloma patient that has achieved stable disease through this 30 milligrams per day.

Now, the patient does require an occasional drug holiday from thrombocytopenia, whereas when you take the patient off drug, it resolves quite quickly. As a precursor, cells have been allowed to mature. We have launched a 2 times a week, which is Monday and Thursday schedule at 60 milligrams and have just now gone to the next cohort at 90 milligrams and have enrolled the first three patients in the three times per week, Monday, Wednesday, Friday and that’s at 60 milligrams. That was relevant in those two dosing schedules. We are encouraged that we have not seen any AEs to-date emerge at 60 milligrams and now we haven’t seen anything at 90 milligrams yet. And yet at the 2 times a week, we saw a MCL patient have a reduction in tumor size with no AEs. So it’s very encouraging, albeit it’s early going.

Now the study objectives are clearly to establish the maximum tolerated dose, safety and tolerability, to determine the maximum optimum dosing and schedule. So we are looking at the PK, PD of these different dosing regimens and I will remind everyone we continue to treat with the daily and now we are looking at the intermittent schedule. And it’s the evaluation of preliminary clinical activity. Study sites, we have three centers enrolling patients, Dr. Anas Younes at Memorial Sloan Kettering, who is a diffuse large B-cell lymphoma expert. And he presented the poster. He is very encouraged by our preclinical data and obviously it’s still early going with the clinical data and it’s too early to tell, but we are encouraged by what we have seen to-date, which I will go over in a moment and then Sarah Cannon and MD Anderson Cancer Center.

This is PK data from patients that we have evaluated clinically. And we are seeing apparent increase in exposure with higher doses. And again, we are seeing this metabolite of M2 accumulation on daily dosing. We believe the metabolite has half life of between 24 hours and 48 hours and this supports intermittent dosing. So the objective now is to ameliorate the AEs we are seeing with the daily dosing. And we believe most of that is driven by the HDAC activity and to maximize the benefits of increasing the Cmax, AUC.

Right now again too early to forecast, but we are encouraged by what we have seen so far and that there appears to be clinical benefit and we haven’t seen any AEs emerge because we are giving that intermittent break from the HDAC suppression. And then we see higher plasma metabolite levels compared to the parent compound which is what we saw in animal models. So again we have learned a tremendous amount about the drug’s activity. We are learning now, that’s the whole point of having three dosing schedules in parallel, which is try to ascertain optimum dosing and schedule, so that we can manage the AEs while maximizing the clinical benefit.

So the interim Phase 1 clinical safety as we saw that continuous daily dosing was associated with drug accumulation and in terms of the metabolite and treatment related AEs and we have had to have dosing interruptions due principally to thrombocytopenia, again a known side effect of these targets as well as diarrhea and fatigue. And this is consistent we are not seeing any AEs that we are surprised at. The DLT was a grade three diarrhea and a grade four hyperglycemia in one subject at the 60 milligram dose level, that patient also happened to go into the trial that was a diabetic patient which may have exacerbated the hyperglycemia AE.

So enrollment is ongoing in the intermittent treatment schedules with the twice weekly we are now at the 90 milligram dose cohorts. Now again I want to remind everyone we saw clinical benefit and a PI at 30 milligrams. And the three times a week is now starting at 60 milligram. We haven’t seen any AEs yet with the intermittent. And we do believe this is with the break on the HDAC side. And we are encouraged by the fact that M2 continues to build up and appears to be stable. So we are hopeful that even with this intermittent dosing particularly the three times a week will continue to get an increase in the PI3 side which is important because you remember that’s a competitive blockade of the ATP binding target.

And this is the data we presented in the poster at ASH. Again I can now appreciate and understand I think there was a greater expectation from investors that we are going to have more patients. We forecasted and guided that we would have between 15 and 20 patients. We in fact had 16 patients enrolled receiving drug. Out of that 13 had received drug for a long enough to be considered relevant for reporting. And out of that we had 11 evaluable. So out of the 11 evaluable patients nine were lymphoma, two with multiple myeloma. And we have had clinical benefit in eight out of 11 patients at suboptimal dosing. And I want to reiterate this, because I think the expectation was that we were achieving optimum dosing and we had more patients and we were going to have data that was more indicative of a more mature Phase 1.

We have been learning how to exploit the attributes of this drug by carefully studying the PK in these patients and that’s why we have put the intermittent dosing in play. So now to go through this data, again we have – if you see there we have three out of three diffuse large B-cell lymphoma patients having clinical benefit again at suboptimum dosing. One patient at 30 milligrams daily had a 70% reduction in the tumor burden. And we have two that have stable disease and they were on 60 milligram. What’s relevant about this again I want to reiterate, while other PI3 kinase inhibitors have clearly demonstrated quite profound responses and clinical benefit in the lymphoma space, it’s not entered diffuse large B-cell lymphoma space nor multiple myeloma that’s why we are focusing there and we have stated that upfront from the beginning.

So we are encouraged by this data not because its complete data package and we think it stands on its merits to go forward in the Phase 2, but that its early going and we are seeing activity already and we are now surveying higher doses with intermittent scheduling. So again in the seven subjects with stable disease, a significant number of them have reduction in tumor size. I will bring to your attention the mass cell lymphoma, where you have 60 milligrams twice a week, certainly not an optimum dosing schedule and we see a reduction in tumor size. So again, it’s encouraging data albeit still anecdotal and early. And the one subject with multiple myeloma that was our very first patient. That patient continues to receive drug on the daily dosing at 30 milligrams per day with intermittent breaks based on thrombocytopenia, but that patient is now well into the 11th month of therapy.

So in summary, we believe this drug has differentiatable and competitive attributes to a growingly or increasingly competitive landscape and that it’s distinct from just PI3 kinase inhibition. And that’s why we are focusing on diffuse large B-cell lymphoma and multiple myeloma. Our drug hits alpha and delta very potently as well as some beta activity and then Class 1 and Class 2 HDACs, which we believe are relevant to compensatory bypass mechanisms. This is a program that we control 100% of worldwide rights. We have demonstrated synergistic inhibition of signaling cascade from PI3 and blocking again the compensatory bypass. We have demonstrated potent activity in both lymphoma and multiple myeloma models. And again, based on preclinical evidence, we were hoping to see activity in diffuse large B-cell lymphoma and multiple myeloma. That’s why we are encouraged by what we are seeing today.

We see that biomarker activity that was suppressing both targets demonstrated in vivo. We are looking forward to demonstrating that clinically, so gathering skin samples principally on a going forward basis. The Phase 1 dose escalation completion is projected for the first half of 2014. The clinical PK as predicted from model studies is the same as what we are seeing in the humans and we are actually very pleased with that, the fact that we are seeing an active M2 building up over time. We believe we will have improved tolerability with the intermittent schedule. That’s why this is relevant and important. Again, we amended that in mid-year based on our observations. Now, certainly, we wish we had enrolled more patients by end of year, but I will remind everyone that in the midst of that, we also had a change in our Chief Medical Officer and we have really been building out and professionalizing our clinical group. So we expect enrollment to the rate to be increasing and sustainable over time, where we will meet these objectives going forward. We are expected that this intermittent schedule will permit higher doses than we achieved with the daily schedule and the early data seems to evidence and support that.

We have preliminary evidence of clinical activity. And again in out of 11 valuable patients, we saw one PR in diffuse large B-cell lymphoma, a 70% reduction in 7 stable diseases, the majority of which demonstrated a reduction in tumor lesions, tumor size. One had a 44% reduction, so that’s close to a PR. So again, the expansion cohorts are expected in 2014 in the two indications we forecasted when we entered the Phase 1 and the data appears to support the premise that we put forward in the early going of this program. Again, the Phase 2 testing is projected for late 2014. So I hope this has provided a better context and insight in terms of the fact pattern behind this program. I realized there is a significant amount of frustration, because they were appeared to have been in expectation of more patients being reported on in the ASH poster, but we believe that the data that’s been presented supports what we have been forecasting. And we are very encouraged by what we are seeing to-date and look forward to providing you with further details as we enroll more patients in increased dosing on these intermittent schedules.

So I am now going to move to CUDC-427. This is an antagonist of IAPs. I think for purposes of brevities of use, they have significant amount of time on 907. I am going to run through this very quickly. I think everyone is aware we in-licensed this from Genentech. This drug is meant to take a protective buffer away from tumor cells that is when tumor necrosis factor or intrinsic apoptotic signals from mitochondrial signals are induced. Tumors are accessing these IAPs to protect them from apoptosis. So the objective as evidenced by the Phase 1 design that Genentech put into play is to use this drug in combination with TNF inducing chemotherapies thereby taking this protective mechanism away and hopefully enhancing the therapeutic effect of TNF induction. And that’s the objective.

Genentech designed their Phase 1 where they treated 42 patients, the drug showed to be well-tolerated using a 14-day on, 7-day off schedule. That schedule was designed to correspond with the dosing schedule of Xeloda, which was the intended purpose which we are going forward with in breast cancer. The reason we ran a separate Phase 1, I am going to get to that at this point in the monotherapy was to buttress the data they presented to see if we could take the 7-day holiday away and increase the exposure where we would find patients that have genetical durations, where we may have effective monotherapy and this was because Genentech demonstrated two complete responders in the monotherapy schedule. So our objective was to determine the MTD, where there was no drug holiday. And remind everyone, we have two CRs in the Genentech portion, where they had a MALT lymphoma patient, CR by PET scan in Cycle 5. MALT lymphoma is known to have an IAP translocation or amplification. So there is the genetic underpinning as well as an ovarian cancer patient. And if you look at the dosings here, it’s 300 milligrams and 450 milligrams respectively.

Now, our intention going forward is to survey in HER-2 negative breast cancer, the Phase 1b/2 in combination with Xeloda and this is to be initiated once we have the partial clinical hold lifted by the FDA and then to launch a monotherapy Phase 1 and an expansion in selected cancers. And again, when we get the clinical hold by the FDA lifted, I give everyone context of that hold, that was predicated on no dosing break. We were dosing patients at 600 milligrams. It was 300 milligrams twice daily and we went up to 800 milligrams, 400 milligrams twice daily. We had one patient who is a metastatic breast cancer patient who had elevated liver enzymes. They were taken off of 427. The enzyme level started coming back down. And then to our surprise, this was 2 or 3 days after coming off drug, enzyme started going back up as well as bilirubin and continued and unfortunately, the patient died from liver failure.

Now, we are looking at the case study very carefully. We believe it’s likely to be attributed to other factors, not just 427. Patient was on concurrent or concomitant therapies. So we are known to have liver hepatotoxicity. So we are looking at the case very carefully and we want to report that to the FDA by the end of the year and we are expecting within 30 days there we will have this lifted. So we look forward to launching these studies. We continue to work on refining and defining the protocols that were ready to go when that and hopefully when that lift is – we are notified of it being lifted.

I am unfortunately almost out of time. And I think everyone knows the Erivedge story very well. I will just give you a very brief overview in that. We are very encouraged by continued increase each quarter albeit from the initial launch, it took more time to get the legs where we are now seeing, but we had approximately a 30% increase quarter-by-quarter. We are expecting this year to be greater than 75 million annual sales. So that bodes well for next year or the year after. So we continue to be encouraged by the effort in the resources committed to this program by Genentech and Roche.

I just want to also remind everyone that Genentech and Roche has initiated a trial in AML as well as MDS. So we are now looking at other indications beyond BCC. And we look forward to the Phase 2 readout and we are expecting that to be a dermatology conference in March. And that will potentially expand the market potential significantly if we have the possibility of less severe forms of BCC where it’s used as a neo-adjuvant. I would like to give the audience some time for couple of questions. So I will end just by saying we are in very good shape right now. Financially, we have run the year with little over 2 years worth of capital. That’s with no other additional infusion and which stay in the course here with 907. Again, we are encouraged by the data we have seen. We just think to generate more of it and stick to the protocol. We look forward to giving you the update to become available. I’d like to open up for any questions right now.

Question-and-Answer Session

Unidentified Analyst

On 467.

Dan Passeri

Yes.

Unidentified Analyst

(Question Inaudible) subject, in other words consisting IAP protein pro inhibitor, can you at least focusing on the patients who already have elevated IAP?

Dan Passeri

Yes. So it’s a good question. What we see those patients that have elevated TNF, one of the reactions as you usually see elevated IAP levels when you induce TNF and it’s the tumor trying to adapt. So relevant to that, as we have also seen a biomarker data that was suppressing CIP at relatively low levels before any of these toxicities are emerging. So we have a very good therapeutic window, but it’s an important question. So it’s we typically see IAPs go up in response to TNF. And that’s why that this combination is such an attractive one.

Unidentified Analyst

Any additional questions? Thank you very much.

Dan Passeri - Chief Executive Officer

Okay, thank you very much for your attention.

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