Curis Reports Fourth Quarter and Fiscal 2000 Results.Business/Science Editors BIOWIRE2K CAMBRIDGE, Mass.--(BW HealthWire)--Feb. 23, 2001 Curis, Inc. (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on :CRIS) today reported the results of its operations for the three- and twelve-month periods ended December 31, 2000. These results include combined results of the three companies merged into Curis as described below. Due to the completion of merger in the middle of 2000 and the associated non-cash charges Non-Cash Charge A charge off, made by a company against earnings, that does not require an initial outlay of cash. Notes: Non-cash charges are typically against the depreciation, amortization, and depletion accounts on a company's balance sheet. , the historical financial information and the comparison to prior years is provided but does not accurately reflect the change in Curis' business operations Business operations are those activities involved in the running of a business for the purpose of producing value for the stakeholders. Compare business processes. The outcome of business operations is the harvesting of value from assets . Excluding one-time costs and expenses, amortization of intangibles and stock-based compensation, total net loss for the three months ended December 31, 2000 was $9,233,000, or $0.34 per share. Financial results for the three-month period ended December 31, 2000 included two significant, non-cash expenses associated with the formation of Curis and the merger occurring on July 31, 2000 which are as follows: stock-based compensation of $4,133,000 and amortization of intangible assets Intangible Asset An asset that is not physical in nature. Notes: Examples are things like copyrights, patents, intellectual property, and goodwill. These are the opposite of tangible assets. of $5,803,000. Curis' cash and investment balance on December 31, 2000 was $75,799,000. Curis had 31,383,585 shares outstanding on December 31, 2000. "Curis has successfully completed its first fiscal year. It was a year that saw the successful consummation of a merger among three companies and the creation of a robust portfolio of technologies and products. Recently Curis increased its cash reserve and expanded its stem cell stem cell In living organisms, an undifferentiated cell that can produce other cells that eventually make up specialized tissues and organs. There are two major types of stem cells, embryonic and adult. portfolio. Curis is poised to become the premier regenerative re·gen·er·a·tive adj. 1. Of, relating to, or marked by regeneration. 2. Tending to regenerate. re·gen medicine company," said Doros Platika, M.D., president and chief executive officer of Curis. "During the final quarter of the year, we expanded our core management team with the addition of Dr. Andrew Uprichard as chief operating officer Chief Operating Officer (COO) The officer of a firm responsible for day-to-day management, usually the president or an executive vice-president. and Daniel Passeri as senior vice president, corporate development and strategic planning Strategic planning is an organization's process of defining its strategy, or direction, and making decisions on allocating its resources to pursue this strategy, including its capital and people. ," said Dr. Platika. "These individuals, who bring extensive experience in clinical development and negotiating corporate alliances, respectively, reflect dual priorities at Curis for 2001. "Early in 2001, regulatory activities related to the Company's lead product, OP-1 for non-union bone fractures, included a unanimous recommendation for approval by European authorities and a recommendation for approval by the Australian authorities," said Dr. Platika. "In addition, our OP-1 marketing partner, Stryker Corporation, received a Not-Approvable letter from the U.S. FDA FDA abbr. Food and Drug Administration FDA, n.pr See Food and Drug Administration. FDA, n.pr the abbreviation for the Food and Drug Administration. . We will report on developments in all three jurisdictions as they unfold in the coming months. In the meantime Adv. 1. in the meantime - during the intervening time; "meanwhile I will not think about the problem"; "meantime he was attentive to his other interests"; "in the meantime the police were notified" meantime, meanwhile , Stryker is continuing its clinical trials with OP-1 in fresh fractures and spinal fusion spinal fusion n. A surgical procedure in which vertebrae are joined. Also called spondylosyndesis. Spinal fusion . "On the licensing front, Curis entered into an agreement with Aegera Therapeutics Inc. granting Curis an exclusive worldwide license of Aegera's skin-derived, adult stem cell Adult stem cells are undifferentiated cells found throughout the body that divide to replenish dying cells and regenerate damaged tissues. Also known as somatic (from Greek Σωματικóς, of the body technologies and establishing a broad collaboration to investigate the therapeutic potential of these technologies in neurological, pancreatic and cardiovascular disorders," said Dr. Platika. "Aegera's work in stem cell biology suggests that stem cells stem cells, unspecialized human or animal cells that can produce mature specialized body cells and at the same time replicate themselves. Embryonic stem cells are derived from a blastocyst (the blastula typical of placental mammals; see embryo), which is very young present in adult skin, an easily accessible source of pluripotent stem cells pluripotent stem cell Hematology The 'mother of all cells'–the progenitor of all hematopoietic cells–eg, platelets, RBCs, neutrophils, macrophages, lymphocytes. See Stem celll. , may give rise to a variety of cell types that go beyond their tissue of origin. Curis' expertise with stem cells, growth factors and small molecules, combined with Aegera's technology, represents a dynamic paradigm for developing innovative regenerative medicine therapeutics. "Finally, research published in Nature Immunology (February 2001), demonstrated for the first time the role of two protein families in the expansion of human blood stem cells that retain the capacity to differentiate into any one of the body's different blood cells blood cells, n.pl the formed elements of the blood, including red cells (erythrocytes), white cells (leukocytes), and platelets (thrombocytes). blood cells See erythrocyte and leukocyte. Platelets are classed separately. ," said Dr. Platika. "The two protein families identified in this study interact to control one of the critical functions of the human body known as hematopoiesis Hematopoiesis The process by which the cellular elements of the blood are formed. The three main types of cells are the red cells (erythrocytes), which serve to carry oxygen, the white cells (leukocytes), which function in the prevention of and recovery from , or the formation of the blood and immune system immune system Cells, cell products, organs, and structures of the body involved in the detection and destruction of foreign invaders, such as bacteria, viruses, and cancer cells. Immunity is based on the system's ability to launch a defense against such invaders. . Both families are central elements in the Curis intellectual property and technology portfolio. Curis is uniquely positioned, therefore, to develop and commercialize products based on discoveries related to these proteins." Primarily as a result of non-cash charges totaling $325,879,000 associated with the merger, Curis reported a net loss of $350,351,000 or $19.80 per share, for the year ended December 31, 2000, compared with Creative BioMolecules This page aims to list articles on Wikipedia that describe particular biomolecules or types of biomolecules. This list is not necessarily complete or up to date - if you see an article that should be here but isn't (or one that shouldn't be here but is), please update the page , Inc., the predecessor company of Curis, which had a net loss of $14,505,000, or $1.36 per share, for the year ended December 31, 1999. Financial results for the year ended December 31, 2000 included a number of significant, non-cash charges and other merger-related cash expenses associated with the merger. These include costs and expenses as follows: a one-time non-cash charge of $294,800,000 resulting from the allocated portion of the purchase price of Ontogeny ontogeny: see biogenetic law. Ontogeny The developmental history of an organism from its origin to maturity. It starts with fertilization and ends with the attainment of an adult state, usually expressed in terms of both maximal body and Reprogenesis identified under the accounting rules as in-process research and development; stock-based compensation of $16,628,000; amortization of intangible assets of $14,451,000; severance paid to former executive officers and former employees of $1,955,000; and a loss on the disposition of assets of $204,000. Total revenues for the year ended December 31, 2000 were $1,024,000 as compared to $3,212,000 for the same period in 1999. The decrease in revenues was primarily the result of the termination of a research agreement with Biogen, Inc. in 1999, which was partially offset by revenues earned under a National Institute of Standards and Technology National Institute of Standards and Technology, governmental agency within the U.S. Dept. of Commerce with the mission of "working with industry to develop and apply technology, measurements, and standards" in the national interest. (NIST (National Institute of Standards & Technology, Washington, DC, www.nist.gov) The standards-defining agency of the U.S. government, formerly the National Bureau of Standards. It is one of three agencies that fall under the Technology Administration (www.technology. ) grant received in November 1999. Total operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. , when excluding one-time costs and expenses, amortization of intangibles and stock-based compensation, for the year ended December 31, 2000 were $26,754,000, as compared to $15,959,000 for the same period in 1999. For the year ended December 31, 2000, total other income was $1,425,000, as compared to $1,765,000 for the same period in 1999. The decrease was due to a lower average available investment balance as compared to the prior year and a higher average balance of lease obligations from the consolidation of the merger. "In December, Curis closed a private placement offering that raised $46.8 million in gross proceeds from the sale of newly issued shares placed with a group of institutional investors Institutional Investor A non-bank person or organization that trades securities in large enough share quantities or dollar amounts that they qualify for preferential treatment and lower commissions. ," said George A. Eldridge, vice president, finance, and chief financial officer. "This transaction, completed on a timely basis during a period of volatility in the financial markets, significantly increased the financial resources of the company. "It is important to note that the loss for Fiscal 2000 of $350,351,000 was primarily the result of non-cash items due to accounting requirements associated with the merger and even included a one-time non-cash charge of over $294,800,000 related to in-process research and development acquired during the merger," said Mr. Eldridge. "Going forward, we are projecting our gross operating expenditures to approximate $10 million per quarter which, with our capital resources totaling $75,799,000 as of December 31, 2000, gives us sufficient resources to operate for almost two years." On July 31, 2000, Creative BioMolecules, Inc. (formerly NASDAQ: CBMI CBMI Christian Blind Mission International (Australia) CBMI Content Based Multimedia Indexing CBMI Commercial Building Mold Inspector ), Ontogeny, Inc., and Reprogenesis, Inc., merged with and into Curis, Inc. On that date, Curis, as the surviving company surviving company The company that emerges in control following a business combination. The surviving company is generally one of the firms entering the combination but may be a new company formed by the combination. of the merger, assumed the rights and obligations of Creative, Ontogeny and Reprogenesis. Immediately after the merger, Curis was owned approximately 43 percent by the former stockholders of Creative, 38 percent by the former stockholders of Ontogeny and 19 percent by the former stockholders of Reprogenesis. Consequently, for accounting purposes, Curis is deemed to be the successor to Creative, and the historical financial statements of Creative have become the historical financial statements of Curis. Curis, Inc. is developing products based on technologies in the emerging field of regenerative medicine. The Company is combining insights gained through the study of developmental biology Developmental biology A large field of investigation that includes the study of all changes associated with an organism as it progresses through the life cycle. The life cycles of all multicellular organisms exhibit many similarities. with high-throughput screening High-throughput screening (HTS), is a method for scientific experimentation especially used in drug discovery and relevant to the fields of biology and chemistry. Purpose and method capabilities, proteins, cells and biocompatible materials to facilitate the development of new regenerative medicine therapies. For more information, please visit the Curis web site at http://www.curis.com. The statements in this news release that are not historical facts are forward-looking statements that involve risks and uncertainties including, without limitation, risks associated with the inherent uncertainty of pharmaceutical research, product development, regulatory approval and commercialization, the impact of competitive products, patents, patent litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. , product liability, third party reimbursement, and other risks and uncertainties associated with the biotechnology industry. For additional factors that could cause actual results to differ materially, please refer to the risk factors section of the Curis Registration Statement filed on Form S-1 with the Securities and Exchange Commission on December 19, 2000 and Quarterly Report on Form 10-Q/A filed with the Securities and Exchange Commission on December 6, 2000.
CURIS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
Three months ended Year ended
December 31, December 31,
2000 1999 2000 1999
Revenues $279,756 $806,100 $1,023,569 $3,211,860
Operating expenses:
Research and
development 7,351,433 2,362,218 17,423,895 10,434,560
General and
administrative 2,687,443 1,445,890 9,330,256 5,524,077
Stock-based
compensation 4,132,628 -- 16,628,216 64,000
Amortization of
intangible
assets 5,803,422 482,312 14,450,896 808,017
Gain (loss) on
disposition of
fixed assets (44,612) -- 203,904 --
In-process research
& development -- -- 294,800,000 --
1999 reorganization
and 1998 sale of
manufacturing
operations -- 255,701 (38,391) 255,701
Total operating
expenses 19,930,314 4,546,121 352,798,776 17,086,355
Net loss from
operations (19,650,558) (3,740,021) (351,775,207) (13,874,495)
Interest and
other income 741,641 308,513 1,905,893 1,926,090
Interest expense (215,948) (46,605) (481,310) (161,385)
Total other
income 525,693 261,908 1,424,583 1,764,705
Net loss $(19,124,865) $(3,478,113) $(350,350,624) $(12,109,790)
Accretion and
repurchase costs
on Series 1998/A
Preferred Stock -- -- -- (2,395,559)
Net loss
applicable
to common
stockholders $(19,124,865) $(3,478,113) $(350,350,624) $(14,505,349)
Basic and
diluted
net loss per
common share $(0.71) $(0.32) $(19.80) $(1.36)
Weighted average
common shares
for basic and
diluted net loss
computation 26,786,175 10,868,052 17,693,996 10,681,547
CURIS, INC.
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
December 31, December 31,
2000 1999
ASSETS
Cash, cash equivalents and
marketable securities $ 75,798,610 $ 21,370,585
Property and equipment, net 7,866,591 2,130,158
Intangible assets 97,145,664 5,075,914
Other assets 1,871,125 315,634
Total assets $182,681,990 $ 28,892,291
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable and accrued expenses $ 7,741,465 $ 4,113,994
Debt and capital lease obligations 6,126,759 1,356,711
Total liabilities 13,868,224 5,470,705
Total stockholders' equity 168,813,766 23,421,586
Total liabilities and
stockholders' equity $182,681,990 $ 28,892,291
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