Competing In The Sport Of Biotechs, Curis Takes Aim

| About: Curis, Inc. (CRIS)
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Like most professional sports teams, biotech companies must take shots to score. The more you shoot, the more you score. The more you score, the more you win. But, unlike national championships, biotechs seek drug approvals. Drugs in the clinic are like players on a sports team. How does Curis (NASDAQ:CRIS), a biotech company specializing in cancer therapeutics, stack up against the competition?

With Erivedge® (vismodegib), CRIS has a valuable player on its team. Vismodegib is an FDA approved drug to treat advanced basal cell carcinoma (BCC). BCC is a skin cancer that exhibits aberrant hedgehog pathway signaling. Vismodegib is a hedgehog pathway inhibitor. In a phase II clinical trial, adults with locally advanced or metastatic BCC were given oral vismodegib. Overall response in patients with locally advanced BCC was 42.9%; for patients with metastatic BCC, it was 30.3%. Median duration of response (DOR) was 7.6 months and median progression-free survival was 9.5 months. Interestingly, follow-up study of patients treated with vismodegib revealed a longer DOR. Patients with locally advanced BCC had a DOR of 20.3 months (compared to 7.9 months in the trial) and 14.7 months for metastatic BCC (vs. 12.9 months).

According to its most recent quarter report, sales of Erivedge (which is marketed by Genentech/Roche) have grown by 20% quarter over quarter in the US resulting in an additional $390,000 in royalties from the same quarter in 2012. Assuming successful achievement of clinical development and regulatory objectives, CRIS is eligible to receive up to $115 million (of which it has already received $46 million to date) in contingent cash payments. Assuming CRIS can meet these specified objectives, it can greatly expand its drug pipeline.

In the meanwhile, CRIS has a number of drugs in development: CUDC-427, CUDC-907, Debio 0932, CUDC-101. CUDC-427 is an inhibitor of Apoptosis inhibitor whereas CUDC-907 is a Histone Deacetylase (HDAC) and Phosphoinositide 3-Kinase inhibitor. Debio 0932, licensed to Debiopharm, is a Heat Shock Protein 90 inhibitor. Finally, CUDC-101 is an HDAC, Epidermal Growth Factor Receptor, and Human Epidermal growth factor Receptor 2 inhibitor.

Continued development of these drugs is needed before they can compete in the clinic for cancer. However, it is interesting how Curis has positioned its drug pipeline. With CUDC-427, CUDC-907 and CUDC-101, Curis has three drug candidates in house. With Debio 0932, Curis has derisked its cost of development while maximizing its own continued financial viability. Under terms of the agreement, Debiopharm has assumed all future development responsibility; however, Curis is eligible to receive up to $90 million in payments as well as royalties on sales.

With its drug portfolio, CRIS has a number of shots on net. Only time will tell if these shots translate into goals but, at least, CRIS is not scoreless. Vismodegib is a point scorer, approved in the US, Australia, Israel, Mexico, and South Korea. For the more conservative yet speculative investor, CRIS provides stability with its FDA approved vismodegib and long upside with its drug candidates.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.