Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2014 |
Accounting Policies [Abstract] | |
Use of Estimates | | (a) | USE OF ESTIMATES | | | | | | | | | | | | | | |
The preparation of the Company’s consolidated financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts and disclosure of revenue, expenses and certain assets and liabilities at the balance sheet date. Such estimates include revenue recognition, including estimates of the performance obligations under the Company’s collaboration agreements; the estimated repayment term of the Company’s debt and related short- and long-term classification; the collectibility of receivables; the carrying value of property and equipment and intangible assets; the assumptions used in the Company’s valuation of stock-based compensation and the value of certain investments and liabilities, including our warrant liability. Actual results may differ from such estimates. |
Consolidation | | (b) | CONSOLIDATION | | | | | | | | | | | | | | |
The accompanying consolidated financial statements include the Company and its wholly owned subsidiaries, Curis Royalty (see Note 7), Curis Securities Corporation, Inc. and Curis Pharmaceuticals (Shanghai) Co., Ltd., or Curis Shanghai. The Company has eliminated all intercompany transactions in each of the years ended December 31, 2014, 2013 and 2012. |
Revenue Recognition | | (c) | REVENUE RECOGNITION | | | | | | | | | | | | | | |
The Company’s business strategy includes entering into collaborative license and development agreements with biotechnology and pharmaceutical companies for the development and commercialization of the Company’s drug candidates. The terms of the agreements typically include non-refundable license fees, funding of research and development, payments based upon achievement of clinical development and regulatory objectives, and royalties on product sales. The Company follows the provisions of the Financial Accounting Standards Board, or FASB, Codification Topic 605, Revenue Recognition. |
License Fees and Multiple Element Arrangements |
In January 2011, the Company adopted a new U.S. generally accepted accounting principles, or GAAP, accounting standard on a prospective basis which amends existing revenue recognition accounting guidance to provide accounting principles and application guidance on whether multiple deliverables exist, how the arrangement should be separated, and the consideration allocated. This new guidance eliminates the requirement to establish objective evidence of fair value of undelivered products and services and instead provides for separate revenue recognition based upon management’s best estimate of the selling price for an undelivered item when there is no vendor-specific objective evidence or third-party evidence to determine the fair value of the undelivered item. |
Non-refundable license fees are recognized as revenue when the Company has a contractual right to receive such payment, the contract price is fixed or determinable, the collection of the resulting receivable is reasonably assured and the Company has no further performance obligations under the license agreement. Multiple element arrangements, such as license and development arrangements are analyzed to determine whether the deliverables, which often include a license and performance obligations such as research and steering committee services, can be separated or whether they must be accounted for as a single unit of accounting in accordance with GAAP. The Company recognizes up-front license payments as revenue upon delivery of the license only if the license has stand-alone value. If the license is considered to not have stand-alone value, the arrangement would then be accounted for as a single unit of accounting and the license payments and payments for performance obligations are recognized as revenue over the estimated period of when the performance obligations are performed. |
If the Company is involved in a steering committee as part of a multiple element arrangement, the Company assesses whether its involvement constitutes a performance obligation or a right to participate. Steering committee services that are determined to be performance obligations are combined with other research services or performance obligations required under an arrangement, if any, in determining the level of effort required in an arrangement and the period over which the Company expects to complete its aggregate performance obligations. |
Whenever the Company determines that an arrangement should be accounted for as a single unit of accounting, it must determine the period over which the performance obligations will be performed and revenue will be recognized. Revenue will be recognized using either a relative performance or straight-line method. The Company recognizes revenue using the relative performance method provided that the Company can reasonably estimate the level of effort required to complete its performance obligations under an arrangement and such performance obligations are provided on a best-efforts basis. Direct labor hours or full-time equivalents are typically used as the measure of performance. Revenue recognized under the relative performance method would be determined by multiplying the total payments under the contract, excluding royalties and payments contingent upon achievement of substantive milestones, by the ratio of level of effort incurred to date to estimated total level of effort required to complete the Company’s performance obligations under the arrangement. Revenue is limited to the lesser of the cumulative amount of payments received or the cumulative amount of revenue earned, as determined using the relative performance method, as of each reporting period. |
If the Company cannot reasonably estimate the level of effort required to complete its performance obligations under an arrangement, the performance obligations are provided on a best-efforts basis and the Company can reasonably estimate when the performance obligation ceases or the remaining obligations become inconsequential and perfunctory, then the total payments under the arrangement, excluding royalties and payments contingent upon achievement of substantive milestones, would be recognized as revenue on a straight-line basis over the period the Company expects to complete its performance obligations. Revenue is limited to the lesser of the cumulative amount of payments received or the cumulative amount of revenue earned, as determined using the straight-line basis, as of the period ending date. |
If the Company cannot reasonably estimate when its performance obligation either ceases or becomes inconsequential and perfunctory, then revenue is deferred until the Company can reasonably estimate when the performance obligation ceases or becomes inconsequential. Revenue is then recognized over the remaining estimated period of performance. |
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Significant management judgment is required in determining the level of effort required under an arrangement and the period over which the Company is expected to complete its performance obligations under an arrangement. |
Substantive Milestone Payments |
In April 2010, the FASB issued guidance on the milestone method for revenue recognition purposes. Previously, definitive guidance on when the use of the milestone method was appropriate did not exist. This guidance provides a framework of the criteria that should be met for determining whether the milestone method of revenue recognition is appropriate. |
Collaboration agreements that contain substantive milestone payments are recognized upon achievement of the milestone only if: |
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| • | | such milestone is commensurate with either of the following: | | | | | | | | | | | | | |
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| a) | the Company’s performance to achieve the milestone (for example, the achievement of the milestone involves a degree of risk and was not reasonably assured at the inception of the arrangement); or | | | | | | | | | | | | | | |
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| b) | the enhancement of the value of the deliverable as a result of a specific outcome resulting from the Company’s performance to achieve the milestone (or substantive Company effort is involved in achieving the milestone); | | | | | | | | | | | | | | |
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| • | | such milestone relates solely to past performance; and | | | | | | | | | | | | | |
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| • | | the amount of the milestone payment is reasonable relative to all deliverables and payment terms in the arrangement. | | | | | | | | | | | | | |
Determination as to whether a payment meets the aforementioned conditions involves management’s judgment. If any of these conditions are not met, the resulting payment would not be considered a substantive milestone, and the resulting payment would be recognized as revenue as performance obligations are performed under either the relative performance or straight-line methods, as applicable, and in accordance with these policies as described above. In addition, the determination that one such payment was not a substantive milestone could prevent the Company from concluding that subsequent milestone payments were substantive milestones and, as a result, any additional milestone payments could also be considered part of the consideration for the single unit of accounting and would be recognized as revenue as such performance obligations are performed under either the relative performance or straight-line methods, as applicable. Milestones that are tied to regulatory approval are not considered probable of being achieved until such approval is received. Milestones tied to counter-party performance are not included in the Company’s revenue model until the performance conditions are met. |
Reimbursement of Costs |
Reimbursement of research and development costs by third party collaborators is recognized as revenue provided the Company has determined that it is acting primarily as a principal in the transaction according to the provisions outlined in the FASB Codification Topic 605-45, Revenue Recognition, Principal Agent Considerations, the amounts are determinable and collection of the related receivable is reasonably assured. |
Royalty Revenue |
Since the first quarter of 2012, the Company has recognized royalty revenues related to Genentech’s and Roche’s sales of Erivedge. Royalty revenue is recognized upon the sale of the related products based on contractual terms, provided that the royalty amounts are fixed or determinable, collection of the related receivable is reasonably assured and we have no remaining performance obligations under the arrangement. If royalties are received when the Company was remaining performance obligations, it expects to attribute the royalty payments to the services being provided under the arrangement and therefore to recognize such royalty payments as such performance obligations are performed under either the relative performance or straight line methods, as applicable, and in accordance with these policies as described above. The Company expects to recognize royalty revenue in future quarters from Genentech’s sales of Erivedge in the U.S. and in other markets where Genentech and Roche successfully obtain marketing approval, if any (see Notes 3(a) and 7). However, Erivedge royalties will service Curis Royalty’s debt to BioPharma-II, and only amounts in excess of certain quarterly repayment caps, if any, will be available to the Company for use in operations. |
Deferred Revenue |
Amounts received prior to satisfying the above revenue recognition criteria are recorded as short term deferred revenue in the accompanying consolidated balance sheets. Amounts not expected to be recognized during the year ending December 31, 2015 would be classified as long-term deferred revenue. As of December 31, 2014 and 2013, the Company had no amounts classified as short-term or long-term deferred revenue. |
Summary |
During the years ended December 31, 2014, 2013 and 2012, total gross revenues from the Company’s collaborators as a percent of total gross revenues of the Company were as follows: |
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| | Year Ended December 31, | | | | | |
| | 2014 | | | 2013 | | | 2012 | | | | | |
Genentech | | | 100 | % | | | 95 | % | | | 94 | % | | | | |
LLS | | | — | % | | | 4 | % | | | 6 | % | | | | |
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Research and Development | | (d) | RESEARCH AND DEVELOPMENT | | | | | | | | | | | | | | |
Research and development expense consists of costs incurred to discover, research and develop drug candidates. These expenses consist primarily of: (1) salaries and related expenses for personnel including stock-based compensation expense; (2) outside service costs, including clinical research organizations and medicinal chemistry; (3) sublicense payments; and (4) the costs of supplies and reagents, consulting, and occupancy and depreciation charges. In addition, the Company incurred in-process research and development expenses of $9,500,000 during the year ended December 31, 2012, representing the one-time license and technology transfer fee related to the license of CUDC-427 from Genentech (see Note 3(b)). The Company expenses research and development costs as incurred. |
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The Company recognizes cost of royalties on Erivedge royalty revenue earned under the June 2003 collaboration with Genentech related to obligations to third-party university licensors. The Company is also incurring research and development expenses under this collaboration related to the maintenance of these third-party licenses to certain background technologies. In addition, the Company records research and development expense for obligations to certain third-party university licensors upon earning payments from Genentech related to the achievement of clinical development and regulatory objectives under this collaboration. |
Cash Equivalents and Investments | |
| (e) | CASH EQUIVALENTS AND INVESTMENTS | | | | | | | | | | | | | | |
Cash equivalents consist of short-term, highly liquid investments purchased with original maturities of three months or less. All other liquid investments are classified as marketable securities. The Company’s short-term investments are marketable securities with original maturities of greater than three months from the date of purchase, but less than twelve months from the balance sheet date, and long-term investments are marketable securities with original maturities of greater than twelve months from the balance sheet. Marketable securities consist of commercial paper, corporate bonds and notes, and government obligations. All of the Company’s investments have been designated as available-for-sale and are stated at fair value with any unrealized holding gains or losses included as a component of stockholders’ equity and any realized gains and losses recorded in the statement of operations in the period the securities are sold. |
Unrealized gains and temporary losses on investments are included in accumulated other comprehensive income (loss) as a separate component of stockholders’ equity. Realized gains and losses, dividends and interest income are included in other income (expense). Any premium or discount arising at purchase is amortized and/or accreted to interest income. |
The amortized cost, unrealized gains and losses and fair value of investments available-for-sale as of December 31, 2014 are as follows: |
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| | Amortized | | | Unrealized | | | Unrealized | | | Fair Value | |
Cost | Gain | Loss |
Corporate bonds and notes—short-term | | $ | 42,011,286 | | | $ | 4,883 | | | $ | (13,387 | ) | | $ | 42,002,782 | |
Corporate bonds and notes—long-term | | | 791,261 | | | | — | | | | (2,493 | ) | | | 788,768 | |
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Total investments | | $ | 42,802,547 | | | $ | 4,883 | | | $ | (15,880 | ) | | $ | 42,791,550 | |
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Short-term investments have maturities ranging from one and twelve months with a weighted average maturity of 4.1 months. Long-term investments have maturities ranging from January 2016 to May 2016 with a weighted average maturity of 13.8 months. |
The amortized cost, unrealized losses and fair value of short-term investments available-for-sale as of December 31, 2013 with maturity dates ranging between one and twelve months and with a weighted average maturity of 4.7 months are as follows: |
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| | Amortized | | | Unrealized | | | Unrealized | | | Fair Value | |
Cost | Gain | Loss |
Corporate bonds and notes | | $ | 47,091,593 | | | $ | 9,036 | | | $ | (15,476 | ) | | $ | 47,085,153 | |
US government and municipal obligations | | | 501,170 | | | | 10 | | | | — | | | $ | 501,180 | |
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Total investments | | $ | 47,592,763 | | | $ | 9,046 | | | $ | (15,476 | ) | | $ | 47,586,333 | |
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In addition, a certificate of deposit in the amount of $1,001,802 that the Company held as of December 31, 2013 was included within short-term investments in the consolidated balance sheet but is excluded from the table above as it was not deemed to be a security. |
As of December 31, 2013, the Company also recorded long-term investments of $10,726,685 on its Consolidated Balance Sheet. This amount is comprised of corporate and government-secured debt securities with maturities ranging from January 2015 to May 2015 with a weighted average maturity of 14.3 months and with amortized cost totaling $10,727,958, less unrealized net losses of $1,273. |
Fair Value of Financial Instruments | (f) | FAIR VALUE OF FINANCIAL INSTRUMENTS | | | | | | | | | | | | | | | |
The Company discloses fair value measurements based on a framework outlined by GAAP which requires expanded disclosures regarding fair value measurements. GAAP also defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Market participants are buyers and sellers in the principal market that are (i) independent, (ii) knowledgeable, (iii) able to transact, and (iv) willing to transact. |
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The FASB Codification Topic 820, Fair Value Measurements and Disclosures, requires the use of valuation techniques that are consistent with the market approach, the income approach and/or the cost approach. The market approach uses prices and other relevant information generated by market transactions involving identical or comparable assets and liabilities. The income approach uses valuation techniques to convert future amounts, such as cash flows or earnings, to a single present amount on a discounted basis. The cost approach is based on the amount that currently would be required to replace the service capacity of an asset (replacement cost). Valuation techniques should be consistently applied. GAAP also establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs, where available, and minimize the use of unobservable inputs when measuring fair value. The standard describes three levels of inputs that may be used to measure fair value: |
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Level 1 | | Quoted prices in active markets for identical assets or liabilities. | | | | | | | | | | | | | | |
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Level 2 | | Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. | | | | | | | | | | | | | | |
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Level 3 | | Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. The Company’s warrant liability was valued using a probability-weighted Black-Scholes model, discussed further in Note 9, and is therefore classified as Level 3. | | | | | | | | | | | | | | |
In accordance with the fair value hierarchy, the following table shows the fair value as of December 31, 2014 and 2013 of those financial assets and liabilities that are measured at fair value on a recurring basis, according to the valuation techniques the Company used to determine their fair value. No financial assets or liabilities are measured at fair value on a nonrecurring basis at December 31, 2014 and 2013. |
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| | Quoted Prices in | | | Other | | | Unobservable | | | Fair Value | |
Active Markets | Observable | Inputs |
(Level 1) | Inputs | (Level 3) |
| (Level 2) | |
As of December 31, 2014: | | | | | | | | | | | | | | | | |
Cash equivalents | | | | | | | | | | | | | | | | |
Money market funds | | $ | 4,419,894 | | | $ | — | | | $ | — | | | $ | 4,419,894 | |
Municipal bonds | | | — | | | | 1,090,000 | | | | — | | | | 1,090,000 | |
Short- and long-term investments | | | | | | | | | | | | | | | | |
Corporate commercial paper, stock, bonds and notes | | | 40,091,800 | | | | 2,699,750 | | | | — | | | | 42,791,550 | |
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Total assets at fair value | | $ | 44,511,694 | | | $ | 3,789,750 | | | $ | — | | | $ | 48,301,444 | |
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| | Quoted Prices in | | | Other | | | Unobservable | | | Fair Value | |
Active Markets | Observable | Inputs |
(Level 1) | Inputs | (Level 3) |
| (Level 2) | |
As of December 31, 2013: | | | | | | | | | | | | | | | | |
Cash equivalents | | | | | | | | | | | | | | | | |
Money market funds | | $ | 5,535,716 | | | $ | — | | | $ | — | | | $ | 5,535,716 | |
Corporate commercial paper, bonds and notes | | | — | | | | 1,749,983 | | | | — | | | | 1,749,983 | |
Municipal bonds | | | — | | | | 1,110,000 | | | | — | | | | 1,110,000 | |
Short- and long-term investments | | | | | | | | | | | | | | | | |
US government obligations | | | — | | | | 1,151,932 | | | | — | | | | 1,151,932 | |
Corporate commercial paper, stock, bonds and notes | | | 20,176,154 | | | | 36,984,932 | | | | — | | | | 57,161,086 | |
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Total assets at fair value | | $ | 25,711,870 | | | $ | 40,996,847 | | | $ | — | | | $ | 66,708,717 | |
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Warrant liability | | | — | | | | — | | | | 716,786 | | | | 716,786 | |
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Total liabilities at fair value | | $ | — | | | $ | — | | | $ | 716,786 | | | $ | 716,786 | |
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The above table excludes a certificate of deposit in the amount of $1,001,802 that the Company held as of December 31, 2013. |
The following table rolls forward the fair value of the Company’s warrant liability, the fair value of which is determined by Level 3 inputs for the years ended December 31, 2014 and 2013: |
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Balance at December 31, 2012 | | $ | 1,488,179 | | | | | | | | | | | | | |
Change in fair value | | | (771,393 | ) | | | | | | | | | | | | |
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Balance at December 31, 2013 | | $ | 716,786 | | | | | | | | | | | | | |
Change in fair value | | | (716,786 | ) | | | | | | | | | | | | |
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Balance at December 31, 2014 | | $ | — | | | | | | | | | | | | | |
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The remaining 1,373,517 warrants outstanding as of December 31, 2014 expired unexercised in January 2015. |
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Long-Lived Assets Other than Goodwill | | (g) | LONG-LIVED ASSETS OTHER THAN GOODWILL | | | | | | | | | | | | | | |
Long-lived assets other than goodwill consist of property and equipment. The aggregate net balances for these long-lived assets were $407,738 and $445,655 as of December 31, 2014 and 2013, respectively. The Company applies the guidance in FASB Codification Topic 360-10-05, Impairment or Disposal of Long-Lived Assets. If it were determined that the carrying value of the Company’s other long-lived assets might not be recoverable based upon the existence of one or more indicators of impairment, the Company would measure an impairment based on the difference between the carrying value and fair value of the asset. The Company did not recognize any impairment charges for the years ended December 31, 2014, 2013 or 2012. |
Purchased equipment is recorded at cost. The Company does not currently hold any leased equipment. Depreciation and amortization are provided on the straight-line method over the estimated useful lives of the related assets or the remaining terms of the leases, whichever is shorter, as follows: |
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Asset Classification | | Estimated Useful Life | | | | | | | | | | | | | | |
Laboratory equipment, computers and software | | 3-5 years | | | | | | | | | | | | | | |
Leasehold improvements | | Lesser of life of the lease or the life of the asset | | | | | | | | | | | | | | |
Office furniture and equipment | | 5 years | | | | | | | | | | | | | | |
The Company incurred debt issuance costs totaling $421,715 in connection with the Curis Royalty loan transaction, of which $215,000 related to expenses that the Company paid to third parties on behalf of BioPharma-II and the remaining $206,715 were incurred directly by the Company. The debt issuance costs incurred directly by the Company were capitalized as assets and will be amortized over the estimated term of the debt using the straight-line. Assumptions used in determining the expected repayment term of the debt and amortization period of the issuance costs requires management to make estimates that could impact the Company’s short- and long-term classification of the debt issuance costs, as well as the period over which these costs will be amortized (see Note 7). As of December 31, 2014 and 2013, the Company had recorded short-term debt issuance costs of $43,616 and $51,441, respectively, and long-term debt issuance costs of $64,564 and $101,055, respectively. These costs are reported within the prepaid expenses and other current assets and other assets line items, respectively, in the Company’s Consolidated Balance Sheet at December 31, 2014 and 2013. |
Goodwill | | (h) | GOODWILL | | | | | | | | | | | | | | |
As of December 31, 2014 and 2013, the Company had recorded goodwill of $8,982,000. The Company applies the guidance in the FASB Codification Topic 350, Intangibles – Goodwill and Other. During each of December 2014, 2013 and 2012, the Company completed its annual goodwill impairment tests and determined that the Company represented a single reporting unit and as of those dates the fair value of the Company exceeded the carrying value of its net assets. Accordingly, no goodwill impairment was recognized for the years ended December 31, 2014, 2013 and 2012. |
Treasury Stock | (i) | TREASURY STOCK | | | | | | | | | | | | | | | |
On May 31, 2002, the Company announced that its Board of Directors had approved the repurchase of up to $3,000,000 of the Company’s common stock. The Company accounted for its common stock repurchases as treasury stock under the cost method. In 2002, the Company repurchased 1,047,707 shares of its common stock at a cost of $891,274 pursuant to this repurchase program. |
The Company’s 2000 Stock Incentive Plan and the Amended and Restated 2010 Plan generally allow participants to purchase common stock upon the exercise of a stock option by delivery of shares of Company common stock held directly by the participant, with such shares of common stock valued at the closing price on the Nasdaq Global Market, or NASDAQ, on the date of exercise. During the year ended December 31, 2013, certain executive officers and a director exercised stock options by remitting shares of Curis common stock then held by the respective person. The Company accounted for the value of the common stock remitted to the Company in satisfaction of the exercise price as treasury stock under the cost method. These option holders remitted an aggregate of 175,139 shares during the year ended December 31, 2013 with an aggregate value equal to $632,755. As of December 31, 2014, the Company had repurchased an aggregate of 1,222,846 shares of its common stock at a total cost of $1,524,029. |
Basic and Diluted Loss Per Common Share | | (j) | BASIC AND DILUTED LOSS PER COMMON SHARE | | | | | | | | | | | | | | |
Basic and diluted net losses per share were determined by dividing net loss by the weighted average number of common shares outstanding during the period. Diluted net loss per common share is the same as basic net loss per common share for all periods presented, as the effect of the potential common stock equivalents is antidilutive due to the Company’s net loss position for all periods presented. Antidilutive securities consist of stock options and warrants outstanding as of the respective reporting period. Antidilutive securities as of December 31, 2014, 2013 and 2012 consisted of the following: |
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| | For the Years Ended December 31, | | | | | |
| | 2014 | | | 2013 | | | 2012 | | | | | |
Stock options outstanding | | | 11,319,619 | | | | 10,077,805 | | | | 10,437,761 | | | | | |
Warrants outstanding | | | 1,373,517 | | | | 1,373,517 | | | | 1,373,517 | | | | | |
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Total antidilutive securities | | | 12,693,136 | | | | 11,451,322 | | | | 11,811,278 | | | | | |
Stock-Based Compensation | | (k) | STOCK-BASED COMPENSATION | | | | | | | | | | | | | | |
The Company adopted Statement of Financial Accounting Standards, or SFAS, No. 123 (revised 2004), Share-Based Payment (SFAS 123(R)), which established standards for the accounting of transactions in which an entity exchanges its equity instruments for goods or services, and is now referred to as the FASB Codification Topic 718, Compensation—Stock Compensation. Topic 718 focuses primarily on accounting for transactions in which an entity obtains employee services in share-based payment transactions. Topic 718 requires that the fair value of such equity instruments be recognized as an expense in the financial statements as services are performed |
Operating Leases | | (l) | OPERATING LEASES | | | | | | | | | | | | | | |
The Company currently has one facility located at 4 Maguire Road in Lexington, Massachusetts under a noncancellable operating lease agreement for office and laboratory space. The rent payments for this facility escalate over the lease term and the Company expenses its obligations under this lease agreement on a straight-line basis over the term of the lease (see Note 8(a)). |
Concentration of Risk | | (m) | CONCENTRATION OF RISK | | | | | | | | | | | | | | |
Financial instruments, which potentially subject the Company to concentrations of credit risk, consist principally of cash and cash equivalents, short- and long-term investments. The Company invests directly in commercial paper of financial institutions and corporations with A-/Aa3 or better long-term ratings and A-1/P-1 short term debt ratings and U.S. Treasury securities. The Company maintains deposits in federally insured financial institutions in excess of federally insured limits. Management believes that the Company is not exposed to significant credit risk due to the financial position of the depository institutions in which those deposits are held. The Company’s credit risk related to investments is reduced as a result of the Company’s policy to limit the amount invested in any one issue. |
The Company’s accounts receivable at December 31, 2014, represents amounts due from collaborators, primarily for royalties earned on sales of Erivedge by Genentech and Roche. |
The Company relies on third parties to supply certain raw materials necessary to produce its drug candidates, including CUDC-907 and CUDC-427, for preclinical studies and clinical trials. There are a small number of suppliers for certain raw materials that the Company uses to manufacture its drug candidates. |
Comprehensive Loss | | (n) | COMPREHENSIVE LOSS | | | | | | | | | | | | | | |
Comprehensive loss is comprised of net loss and other comprehensive income (loss). Other comprehensive income (loss) includes unrealized holding gains and losses arising during the period on available-for-sale securities that are not other-than-temporarily impaired. |
New Accounting Pronouncements | | (o) | NEW ACCOUNTING PRONOUNCEMENTS | | | | | | | | | | | | | | |
In May 2014, the FASB issued guidance codified in ASC 606, Revenue Recognition—Revenue from Contracts with Customers , which amends the guidance in former ASC 605, Revenue Recognition, and is effective for public companies for fiscal years beginning after December 15, 2016. The Company is currently evaluating the impact of the provisions of ASC 606. |
In August 2014, the FASB issued an accounting standards update, Disclosures of Uncertainties about an Entity’s Ability to Continue as a Going Concern, which is included in ASC 205, Presentation of Financial Statements. This update provides an explicit requirement for management to assess an entity’s ability to continue as a going concern, and to provide related footnote disclosure in certain circumstances. The guidance will be effective for fiscal years beginning after December 15, 2016, and applied prospectively; early adoption is also permitted. The Company does not expect adoption of this guidance to have a material impact on its financial condition or results of operations. |
Segment Reporting | | (p) | SEGMENT REPORTING | | | | | | | | | | | | | | |
The Company is engaged solely in the discovery and development of innovative drug candidates for the treatment of human cancers. Accordingly, the Company has determined that it operates in one operating segment. |