Curis' 'Hedgehog' Inhibitor to Offer Hope for Basal Cell Carcinoma Sufferers

Feb.28.11 | About: Curis, Inc. (CRIS)

Basal cell carcinoma, or BCC, is the most common type of skin cancer, affecting approximately thirty percent of the Caucasian population and comprising ninety percent of all skin cancers. In the United States alone, about 2.8 million people are diagnosed annually with the disease. Although not often fatal, BCC causes damage by growing and invading surrounding tissue and can be very disfiguring.

A picture is worth a thousand words, and a simple image search on the Internet for basal cell carcinoma fully illustrates the damage, embarrassment and costs associated with this form of cancer. At the time of this article, only the topical solutions for superficial BCC (sBCC) have been FDA-approved: Fluorouracil and imiquimod. As implied, these are typically recommended for superficial cancers only, but a higher degree of success can be found in surgical removal of the cancer along with 4-6 mm additional healthy tissue surrounding it to ensure eradication.

There are additional treatments as described here; however, each has its limitations and drawbacks. The most notable concern in terms of treatment comes into play for those in whom the cancer metastasizes, and for them treatment options are slim. If all goes well, help may very well be on the way.

Curis Incorporated (NASDAQ: CRIS) is a drug development company that is developing signaling pathway drug technologies to seek to create new, targeted small molecule drug candidates for cancer. Its most advanced product is GDC-0449, which is in a phase II collaborative effort with Genentech for advanced basal cell carcinoma (BCC that has spread or metastasized).

Genentech is developing GDC-0449 under a collaboration agreement with Curis, Inc. GDC-0449 was discovered by Genentech and jointly validated by Genentech and Curis through a series of preclinical studies. Through this collaboration, Genentech (U.S.), Roche (ex-U.S. except Japan) and Chugai Pharmaceuticals (Japan) are responsible for the clinical development and commercialization of GDC-0449.

Curis is eligible to receive cash payments upon the successful achievement of specified clinical development and regulatory approval milestones, as well as royalties upon commercialization of it. GDC-0449 is a first-in-class Hedgehog pathway inhibitor. The Hedgehog (Hh) signaling pathway plays a crucial role in human embryogenesis but is largely inactive in adult tissues under normal conditions. However, mounting evidence implicates overactive Hh signaling in certain cancers.

The phase II data for advanced BCC is likely to be released by Genentech in 1Q 2011, so time is short for this expected news and stock catalyst. Results from this trial could give confirmation or denial to GDC-0449’s future as a Hedgehog pathway inhibitor in BCC and would act as a huge catalyst depending on the results and how convincing they are. Preliminary phase II data from a similar trial underway for BCC with patients having Gorlin’s syndrome with data presented by Dr. Tang at the American Academy of Dermatology were positive and suggested that:

Of the 41 patients with basal cell nevus syndrome recruited thus far for the phase II trial -- and randomized to 18 months of treatment with GDC-0449 or placebo -- 23 patients (with 953 BCC tumors) have more than one month of data. Although the study is still blinded, 15 patients in group A have developed a median of one new BCC during that month, compared with a median of 10 new BCCs in each of the 8 patients in group B, a significant difference that suggests group A may have received the drug and it may be working, Dr. Tang suggested. In group A, patients started with a median of 252 BCCs and had 127 at the most recent follow-up, a 50% decline. In group B, patients started with 217 BCCs and had 267 at follow-up, a 23% increase in BCCs. The difference between groups is significant, she said. The existing BCCs in group A also seem to have decreased in size. "In the patients who have responded, it has changed their lives," she said.

In October of 2010, Curis announced that Genentech also began a phase II trial with GDC-0449 for treatment of operable BCC, which is BCC that has not metastasized and accounts for a much larger percentage of the BCC cases. Certainly, the anticipation for that trial data will be great but especially if the advanced BCC trial proves to be favorable.

Confirmation of efficacy in the advanced BCC will likely confirm in investors’ minds the likely efficacy for operable BCC, which dramatically increases the marketability of the drug and thus revenues. Curis does have other products in its pipeline, but the GDC-0449 collaborations and potential revenue will certainly set the stage for the company’s growth, stability and investor sentiment as the year progresses.

Also to be considered is another group’s interest in Curis, big pharma. With a market cap of only $227 million at close on Friday, February 25th, this would be a profitable and cheap acquisition for a company with a first-in-class drug for the most common form of skin cancer in its pipeline.

Of particular note would be the obvious Roche Holding Ltd. (Pink: RHHBY.PK), which purchased Genentech, Curis’ co-collaborator for GDC-0449, back in 2009. With the milestone payments Curis would receive from Genentech, a purchase of Curis by Roche would help offset the cost of the company by owning the company they would have to make those payments to.

Keep Curis on your biotech watch list and see how 2011 plays out for the company. Certainly, the next few weeks will be interesting as anticipation for the phase II results builds. Additional catalysts are enrollment completion in the GDC-0449 for the operable BCC as well as updates from another collaborator, Debiopharm, in its phase I trial for Debio 0932 as a single agent given orally to patients suffering from advanced solid tumors or lymphoma.

Curis also plans to announce data from its ongoing phase Ib clinical trial of CUDC-101 and initiate a phase I dose escalation study of CUDC-101 combination with cisplatin and radiation in head and neck cancer patients in 2011. Assuming the successful completion of IND-enabling preclinical studies, it expects to file IND applications for an oral formulation of CUDC-101 and also for CUDC-907, its novel HDAC and P13K inhibitor.

In closing, please consider the financial position for Curis. As of December 31 2010, Curis had $40.2 million in cash. It expects to complete 2011 with $18 to $22 million in cash excluding any payments from existing or new collaborators that they could potentially receive in 2011. The latter statement was an interesting insertion, and perhaps was even a hint that it made in its guidance update on February 10th. It certainly appears the concerns and fears associated with an additional stock offering to pay for studies, in my opinion, have been mitigated for 2011.

Disclosure: I am long CRIS.