[CURIS LOGO]
FOR IMMEDIATE RELEASE
Contacts
Christopher U. Missling Henry W. McCusker
Senior Vice President, Finance and Vice President of Strategic Planning
Chief Financial Officer and Communications
(617) 503-6587 (617) 503-6641
CURIS REPORTS THIRD QUARTER 2002 RESULTS
SIGNIFICANT OPERATING PROGRESS ACHIEVED DURING QUARTER; BALANCE
SHEET MATERIALLY STRENGTHENED AT QUARTER'S END
CAMBRIDGE, MASS, November 12, 2002 - Curis, Inc. (NASDAQ:CRIS) today reported
financial results for the three and nine months ended September 30, 2002.
For the third quarter of 2002, the company reported a net loss of $5,933,000 or
($0.18) per share compared to $71,173,000 or ($2.20) per share for the second
quarter of 2002 and $28,672,000 or ($0.89) per share for the third quarter of
2001. Before non-cash charges, the net loss was $5,319,000 for the third quarter
of 2002 compared to $6,422,000 for the second quarter of 2002 and $21,118,000
for the third quarter of 2001.
Revenues for the third quarter of 2002 were $222,000 compared to $288,000 for
the third quarter of 2001.
Operating expenses for the third quarter of 2002 were $4,944,000 compared to
$16,912,000 for the third quarter of 2001. $6,940,000, or 58%, of the decrease
is attributed to a decrease in non-cash expenses of the Company. The remaining
decrease in operating expenses primarily reflects lower personnel-related costs
and reduced contract research expense resulting from the realignment of the
company's development programs which took place in February 2002.
Daniel R. Passeri, Curis President and Chief Executive Officer said: "I am quite
pleased by the progress that our organization has made towards achieving the
goals of reducing our cash burn rate and improving the productivity of our
research and development efforts which we announced this past February. We have
reduced our cash
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operating expenses by $5,028,000, or 54%, year-over-year, down to $4,330,000 in
the recent quarter from $9,358,000 in the third quarter of 2001, fully achieving
our goal. Furthermore, we successfully enhanced our cash position by negotiating
the sale of our future royalty rights to our BMP-7 (OP-1) technology for
orthopedic and dental applications to our former licensee, Stryker Corporation
and at the same time significantly increasing the royalties on kidney and other
non-bone products currently in development. This transaction, which was
finalized on October 1st, increased our cash position from the $29,358,000 that
was reported on our balance sheet at September 30th to a pro forma level at
October 1st of $43,358,000. The $14,000,000 in cash received on October 1st has
provided Curis with additional funding to enable the advancement of our most
promising product development programs. I greatly appreciate the dedication and
efforts of our entire staff as well as the loyalty of our shareholder group."
The Company realized other relevant milestones during the third quarter. In
September, the Company demonstrated the therapeutic potential of its Sonic
Hedgehog program (SHh) in treating Parkinson's disease, an illness that affects
about one million people in this country. Relating to this, the Company
announced at the 32nd Annual Society of Neurosciences meeting the potential of
its small molecule Hedgehog agonists in treating neurological disorders
including Parkinson's disease, Huntington's disease and stroke damage. In
addition, Curis announced the successful preclinical demonstration of BMP-7's
ability in treating vascular calcification associated with kidney disease, which
is the leading cause of death in dialysis patients. The Company also received
issuance of four U.S. patents during the quarter.
For the nine-month period ended September 30, 2002, the Company reported revenue
of $571,000 and a net loss of $95,109,000, equal to ($2.92) per share versus
revenue of $740,000 and a net loss of $65,756,000, equal to ($2.08) per share
for the nine-month period ended September 30, 2001. For the nine-month period
ended September 30, 2002, the Company recorded a net loss, excluding non-cash
charges of $71,295,000, of $23,814,000, versus a net loss, excluding non-cash
charges of $26,700,000,of $39,055,000 for the nine-month period ended September
30, 2001.
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About Curis
Curis, Inc. is engaged in the discovery of drug targets and the development of
therapeutics based upon the pathways used by the body which control
proliferation and differentiation and, therefore, tissue formation, maintenance
and repair. Curis has identified key regulators responsible for turning on the
mechanisms for tissue repair in response to trauma, injury or disease.
Independently and in strategic alliances, Curis is focusing its research efforts
on identifying and elucidating key regulators of tissue repair having
application for diseases such as kidney disease, cancer and neurological
disorders, which Curis believes represent large market opportunities that are
underserved by current therapeutic alternatives. For more information, please
visit the Curis web site at www.curis.com.
This press release contains forward-looking statements for purposes of the safe
harbor provisions of the Private Securities Litigation Reform Act of 1995. These
statements address a variety of subjects, including, for example, operating
improvement and efficiencies, strategic collaboration efforts and product
development efforts. Statements in this press release that state Curis' or
management's intentions, plans, expectations or predictions of future events are
forward-looking statements. The matters discussed in this press release also
involve risks and uncertainties that may cause Curis' actual results, levels of
activity, performance or achievements to be materially different from any future
results, levels of activity, performance or achievements expressed or implied by
such forward-looking statements. The following important factors and
uncertainties, among others, could cause actual results to differ materially
from those described in these forward-looking statements: Curis' need for
partnerships to move forward its programs, the early stage of product
development of Curis' retained programs, uncertainties related to clinical
trials run by our corporate partners, uncertainties related to Curis' ability to
raise additional capital, Curis' ability to drawdown on its credit facility with
Elan, changes in or an inability to execute Curis' realigned business strategy
and other risk factors described from time to time in Curis' periodic reports
and registration statements filed with the Securities and Exchange Commission,
including, without limitation, Curis' Annual Report on Form 10-K for the year
ended December 31, 2001 filed on March 29, 2002 and the Company's Post Effective
Amendment No. 1 on Form S-3 to the Registration Statement on Form S-1 filed with
the Securities and Exchange Commission on August 10, 2001. Curis cannot
guarantee any future results, levels of activity, performance, or achievements.
Moreover, neither Curis nor anyone else assumes responsibility for the accuracy
and completeness of any forward-looking statements. Curis undertakes no
obligation to update any of the forward-looking statements after the date of
this press release.
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CURIS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
------------------------------------- ------------------------------------------
Three months ended Nine months ended
September 30, September 30,
2002 2001 2002 2001
------------------ ------------------ --------------------- --------------------
Revenues $ 222,351 $ 287,915 $ 570,676 $ 739,718
------------------ ------------------ --------------------- --------------------
Operating expenses:
Research and development 2,884,341 6,901,611 11,621,658 22,903,482
General and administrative 1,445,712 2,456,488 5,986,803 7,711,170
Stock-based compensation 553,851 1,726,532 1,679,246 9,225,641
Amortization of intangible assets 60,105 5,827,392 180,916 17,474,712
Impairment of property and equipment - - 5,336,785 -
Impairment of goodwill - - 64,098,345 -
Realignment expenses - - 3,490,000 -
---------------- ---------------- ----------------- -----------------
Total operating expenses 4,944,009 16,912,023 92,393,753 57,315,005
---------------- ---------------- ----------------- -----------------
Net loss from operations (4,721,658) (16,624,108) (91,823,077) (56,575,287)
---------------- ---------------- ----------------- -----------------
Equity in loss from joint venture (977,160) (12,697,406) (3,217,066) (12,697,406)
Other income (expense), net (53,867) 796,067 473,820 3,663,009
---------------- ---------------- ----------------- -----------------
Net loss (5,752,685) (28,525,447) (94,566,323) (65,609,684)
Accretion on Series A convertible
exchangeable preferred stock (180,225) (146,155) (542,678) (146,155)
---------------- ---------------- ----------------- -----------------
Net loss applicable to stockholders $ (5,932,910) $ (28,671,602) $ (95,109,001) $ (65,755,839)
================ ================ ================= =================
Basic and diluted net loss per common share $ (0.18) $ (0.89) $ (2.92) $ (2.08)
================ ================ ================= =================
Basic and diluted weighted average common
shares outstanding 32,578,225 32,136,744 32,523,852 31,543,300
================ ================ ================= =================
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CURIS, INC.
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
September 30, December 31,
2002 2001
---------------------- -------------------------
ASSETS
Cash, cash equivalents and marketable securities $ 29,358,481 $ 52,107,328
Property and equipment, net 4,184,226 11,060,711
Intangible assets 9,527,865 73,807,125
Other assets 7,961,432 7,781,053
---------------------- -------------------------
Total assets $ 51,032,004 $ 144,756,217
====================== =========================
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable and accrued expenses $ 8,078,609 $ 8,681,868
Debt and capital lease obligations 6,106,365 8,060,937
Convertible notes payable 5,778,985 2,506,852
Deferred revenue 11,962,224 12,145,533
---------------------- -------------------------
Total liabilities 31,926,183 31,395,190
---------------------- -------------------------
Series A convertible exchangeable preferred stock 12,884,058 12,341,381
---------------------- -------------------------
Total stockholders' equity 6,221,763 101,019,646
---------------------- -------------------------
Total liabilities and stockholders' equity $ 51,032,004 $ 144,756,217
====================== =========================
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CURIS, INC.
CONSOLIDATED PRO FORMA BALANCE SHEETS
(UNAUDITED)
Effect of October 1,
September 30, 2002 October 1,
2002 Stryker Transaction 2002
----------------------- ----------------------- ----------------------
ASSETS
Cash, cash equivalents and
marketable securities $ 29,358,481 $ 14,000,000 $ 43,358,481
Property and equipment, net 4,184,226 - 4,184,226
Intangible assets 9,527,865 - 9,527,865
Other assets 7,961,432 - 8,163,779
----------------------- ----------------------- ----------------------
Total assets $ 51,032,004 $ 14,000,000 $ 65,234,351
======================= ======================= ======================
LIABILITIES AND
STOCKHOLDERS' EQUITY
Accounts payable and accrued
expenses $ 8,078,609 $ $ 8,078,609
Debt and capital lease obligations 6,106,365 - 6,106,365
Convertible notes payable 5,778,985 - 5,778,985
Deferred revenue 11,962,224 - 11,962,224
----------------------- ----------------------- ----------------------
Total liabilities 31,926,183 - 31,926,183
----------------------- ----------------------- ----------------------
Series A convertible exchangeable
preferred stock 12,884,058 - 12,884,058
----------------------- ----------------------- ----------------------
Total stockholders' equity 6,221,763 14,000,000 20,424,110
----------------------- ----------------------- ----------------------
Total liabilities and
stockholders' equity $ 51,032,004 $ 14,000,000 $ 65,234,351
======================= ======================= ======================
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