Curis Reports Fourth Quarter and Fiscal 2003 Results.Business Editors CAMBRIDGE Cambridge, city, Canada Cambridge (kām`brĭj), city (1991 pop. 92,772), S Ont., Canada, on the Grand River, NW of Hamilton. It was formed in 1973 with the amalgamation of Galt, Hespeler, and Preston, all founded in the early 19th cent. , Mass.--(BUSINESS WIRE)--Feb. 5, 2004 Curis, Inc. (Nasdaq:CRIS), a therapeutic drug development company, today reported its financial results for the fourth quarter and fiscal year ended December December: see month. 31, 2003. For the fourth quarter of 2003, the Company reported a net loss applicable to common stockholders of $6,936,000, or ($0.17) per share as compared to net income of $12,070,000, or $0.35 per share for the prior year period. Revenues for the fourth quarter of 2003 were $755,000 as compared to $17,820,000 for the fourth quarter of 2002. The decrease in revenues for the fourth quarter of 2003 was primarily due to the fact that revenues for the fourth quarter of 2002 included $14,000,000 earned through the monetization Monetization The securitization of the gross revenues of a contract. of future royalties owed to Curis from Stryker Corporation for sales of the OP-1 bone regeneration Regeneration (biology) The process by which an animal restores a lost part of its body. Broadly defined, the term can include wound healing, tissue repair, and many kinds of restorative activities. product and the Company's receipt of a $3,500,000 up-front up-front or up·front Informal adj. 1. Straightforward; frank. 2. Paid or due in advance: up-front cash. adv. license payment pursuant to its strategic collaboration Working together on a project. See collaborative software. with Ortho Biotech bi·o·tech n. Informal Biotechnology. biotech Noun short for biotechnology Noun 1. , a subsidiary of Johnson & Johnson. Revenues for the fourth quarter of 2003 were derived from the Company's collaboration with Genentech Genentech Inc. (NYSE: DNA), a composite of Genetic Engineering Technology, Inc., is a leading biotechnology corporation, which was founded in 1976 by venture capitalist Robert A. Swanson and biochemist Dr. Herbert W. Boyer. and from its licensing agreement with ES Cell International. 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. for the fourth quarter of 2003 were $5,687,000 as compared to $4,709,000 for the fourth quarter of 2002. Operating expenses for the fourth quarter of 2003 included research and development expenses of $3,858,000 and general and administrative expenses of $1,390,000 as compared to research and development expenses of $2,436,000 and general and administrative expenses of $1,499,000 for the fourth quarter of 2002, respectively. The increase in research and development expenses during the fourth quarter of 2003 was principally attributable to the fact that in the fourth quarter of 2002 Curis received $1,299,000 in expense reimbursement Reimbursement Payment made to someone for out-of-pocket expenses has incurred. related to its joint venture with Elan (Emulated LAN) A virtual LAN in the ATM world. See LANE and virtual LAN. Elan - ["Top-down Programming with Elan", C.H.A. Koster, Ellis Horwood 1987]. Corporation, Curis Newco NewCo is a generic name used to refer to corporate spin-offs and startups before they are assigned a final name. Examples
v. ter·mi·nat·ed, ter·mi·nat·ing, ter·mi·nates v.tr. 1. To bring to an end or halt: in May 2003. Further, during the fourth quarter of 2003, research and development expenses also included $1,005,000 in non-cash expense Noun 1. non-cash expense - an expense (such as depreciation) that is not paid for in cash disbursal, disbursement, expense - amounts paid for goods and services that may be currently tax deductible (as opposed to capital expenditures) associated with the issuance of an aggregate of 200,000 shares of Curis common stock pursuant to amendments to two technology license agreements related to Curis' Hedgehog hedgehog, Old World insectivorous mammal of the family Erinaceidae, related to moles and shrews. The spiny hedgehogs are found in Africa and Eurasia, except SE Asia. They have rounded bodies up to 13 in. technology. The amendments reduced Curis' future royalty payment obligations under these license agreements. Because the Company entered into an agreement with Elan Corporation to end its joint venture, Curis Newco, in May 2003, the Company did not record a loss relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc Curis Newco for the fourth quarter of 2003, as compared to a loss of $1,094,000 recorded for the fourth quarter of 2002. The Company recorded other expense, net, of $2,004,000 for the fourth quarter of 2003 as compared to other income, net, of $234,000 for the prior year period. Other expense, net, recorded in the fourth quarter of 2003 was primarily due to a $1,708,000 charge for the write-off Write-Off A reduction in the value of an asset or earnings by the amount of an expense or loss. Companies are able to write off certain expenses that are required to run the business, or have been incurred in the operation of the business and detract from retained revenues. of a euro-denominated note receivable note receivable A debt due from borrowers and evidenced by a written promise of payment. Note receivable, an entry on the asset side of many corporate balance sheets, indicates the dollar amount of loans due to be repaid by borrowers. that is due in June June: see month. 2005 from Micromet AG, a former collaborator of the Company. Prior to the write-off, the Company had recorded this note receivable on its balance sheet as a note receivable asset of $5,115,000, reflecting the note's current carrying value Carrying Value Also know as "book value," it is a company's total assets minus intangible assets and liabilities, such as debt. Notes: This is different than market value, as it can be higher or lower depending on the circumstances. , after giving effect to interest income and foreign currency gains, of $1,708,000. The Company also recorded $3,407,000 as a long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. deferred revenue liability, which primarily reflected the original principal amount of the note. For the fourth quarter of 2003, the write-off of the note receivable resulted in a one-time one-time adj. 1. or one·time a. Occurring or undertaken only once: a one-time winner in 1995. b. other expense charge of $1,708,000 as well as a reduction in the Company's assets and liabilities of $5,115,000 and $3,407,000, respectively. The Company determined that this charge was necessary due to Micromet's recent announcement that it was terminating one-third of its workforce as the result of a contract dispute with a co-development partner. Micromet has stated that this dispute will result in a significant decrease of previously budgeted cash inflows in 2004. Net loss applicable to common stockholders for the year ended December 31, 2003, was $11,895,000 or ($0.33) per share as compared to $83,038,000 or ($2.57) per share for the year ended December 31, 2002. Revenues for fiscal year 2003 were $11,048,000 as compared to $18,391,000 for the prior year. 2003 revenues were primarily derived from payments related to the termination of the Company's collaboration with Micromet AG, the Company's collaboration with Genentech and its license to ES Cell International. In 2002, the Company's revenues resulted primarily from the consummation CONSUMMATION. The completion of a thing; as the consummation of marriage; (q.v.) the consummation of a contract, and the like. 2. A contract is said to be consummated, when everything to be done in relation to it, has been accomplished. of three transactions, including the Stryker royalty stream monetization, its collaboration with Ortho Biotech and its strategic license agreement with Amylin Pharmaceuticals Amylin Pharmaceuticals is a biopharmaceutical company based in San Diego, CA, that was founded in 1987. Currently, Amylin produces two drugs, Symlin (pramlintide acetate) and Byetta (exenatide). Amylin also is working on producing a drug based on Leptin. . Operating expenses for the year ended December 31, 2003 were $20,960,000 as compared to $97,777,000 for the prior year. The decrease of $76,817,000 is primarily attributable to charges of $69,435,000 from impairment Impairment 1. A reduction in a company's stated capital. 2. The total capital that is less than the par value of the company's capital stock. Notes: 1. This is usually reduced because of poorly estimated losses or gains. 2. of goodwill and property and equipment and $3,490,000 for expenses incurred during the realignment re·a·lign tr.v. re·a·ligned, re·a·lign·ing, re·a·ligns 1. To put back into proper order or alignment. 2. To make new groupings of or working arrangements between. of the Company's development programs, both of which were recorded in 2002. In addition, the Company decreased its general and administrative costs administrative costs, n.pl the overhead expenses incurred in the operation of a dental benefits program, excluding costs of dental services provided. by $2,305,000, or 28%, from $8,160,000 for the year ended December 31, 2002, to $5,855,000 for the year ended December 31, 2003. Because the Curis Newco joint venture did not incur To become subject to and liable for; to have liabilities imposed by act or operation of law. Expenses are incurred, for example, when the legal obligation to pay them arises. An individual incurs a liability when a money judgment is rendered against him or her by a court. any expenses in 2003 and was terminated in May 2003, the Company did not record a loss relating to Curis Newco for the year ended December 31, 2003, as compared to a loss of $4,311,000 recorded for the year ended December 31, 2002. As of December 31, 2003, Curis' cash, cash equivalents, marketable securities Marketable Securities Very liquid securities that can be converted into cash quickly at a reasonable price. Notes: Marketable securities are very liquid as they tend to have maturities less than one year, and the rate at which these securities can be bought or sold has and investments, including long-term investments, were $37,538,000. As of December 31, 2003, there were 40,560,991 shares of common stock outstanding. "We have continued our efforts to streamline our operations in order to maximize the resources available for our research and development programs. For example, we are pleased that these efforts have yielded a decrease in our administrative expenditures of $2,305,000, or 28%, from the previous year," Michael Gray For other people named Michael Gray, see . Michael Gray (born August 3, 1974 in Sunderland, United Kingdom), sometimes known as Micky Gray, is an English football player who plays for Wolverhampton Wanderers F.C. as a full-back. He wears the number 33 shirt for the club. , Curis' Chief Financial Officer said. Daniel Daniel, book of the Bible Daniel, book of the Bible. It combines "court" tales, perhaps originating from the 6th cent. B.C., and a series of apocalyptic visions arising from the time of the Maccabean emergency (167–164 B.C. Passeri, Curis' President and Chief Executive Officer, commented, "2003 has been another successful year for Curis. In June, we established a major drug development collaboration with Genentech in the field of cancer based on our Hedgehog pathway pathway /path·way/ (path´wa) 1. a course usually followed. 2. the nerve structures through which an impulse passes between groups of nerve cells or between the central nervous system and an organ or muscle. research. That transaction provided Curis with an $8,500,000 up-front licensing fee and will provide significant development milestones and product royalties if the program is successful. In addition, we raised $10,900,000 from a private placement of our common stock in August. In January January: see month. 2004, we entered into a collaboration agreement with Wyeth Pharmaceuticals in the field of neurological disorders This is a list of major and frequently observed neurological disorders (e.g. Alzheimer's disease), symptoms (e.g.back pain), signs (e.g. aphasia) and syndromes (e.g. Aicardi syndrome). , which we expect will become effective upon compliance with applicable anti-trust anti-trust adj (COMM): anti-trust legislation → legislazione f antitrust inv laws. During 2004, we believe that our drug development candidates, either through our corporate collaborations or as a result of our internal development efforts, will continue to advance towards human clinical testing."
CURIS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
Three months ended
December 31,
2003 2002
----------- ------------
Revenues $ 755,095 $ 17,819,952
----------- ------------
Operating expenses:
Research and development 3,857,621 2,436,058
General and administrative 1,389,966 1,498,900
Stock-based compensation 420,663 480,848
Amortization of intangible assets 18,768 293,593
Impairment of property and equipment --- ---
Impairment of goodwill --- ---
Realignment expenses --- ---
----------- ------------
Total operating expenses 5,687,018 4,709,399
----------- ------------
Income (loss) from operations (4,931,923) 13,110,553
Equity in Loss from CURIS Newco, Ltd. --- (1,093,845)
Total other (expense) income, net (2,003,649) 233,770
----------- ------------
Net income (loss) (6,935,572) 12,250,478
Accretion on Series A Convertible
Exchangeable Preferred Stock --- (180,225)
----------- ------------
Net income (loss) applicable to common
stockholders $(6,935,572) $ 12,070,253
=========== ============
Basic net income (loss) per common share $ (0.17) $ 0.38
=========== ============
Weighted average common shares for basic net
income (loss) computation 40,426,650 31,843,548
=========== ============
Diluted net income (loss) per common
share(1) $ (0.17) $ 0.35
=========== ============
Weighted average common shares
for diluted net income (loss) computation 40,426,650 35,528,208
=========== ============
Year ended
December 31,
2003 2002
------------ ------------
Revenues $ 11,048,233 $ 18,390,538
------------ ------------
Operating expenses:
Research and development 13,399,492 14,057,715
General and administrative 5,854,569 8,160,012
Stock-based compensation 1,631,098 2,159,594
Amortization of intangible assets 75,079 474,509
Impairment of property and equipment --- 5,336,786
Impairment of goodwill --- 64,098,344
Realignment expenses --- 3,490,000
------------ ------------
Total operating expenses 20,960,238 97,776,960
------------ ------------
Income (loss) from operations (9,912,005) (79,386,422)
Equity in Loss from CURIS Newco, Ltd. --- (4,310,912)
Total other (expense) income, net (1,711,247) 1,381,899
------------ ------------
Net income (loss) (11,623,252) (82,315,435)
Accretion on Series A Convertible
Exchangeable Preferred Stock (271,306) (722,903)
------------ ------------
Net income (loss) applicable to common
stockholders $(11,894,558) $(83,038,338)
============ ============
Basic net income (loss) per common share $ (0.33) $ (2.57)
============ ============
Weighted average common shares for basic net
income (loss) computation 36,015,610 32,267,106
============ ============
Diluted net income (loss) per common
share(1) $ (0.33) $ (2.57)
============ ============
Weighted average common shares for
diluted net income (loss) computation 36,015,610 32,267,106
============ ============
CURIS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
December 31, December 31,
2003 2002
-------------- --------------
ASSETS
Cash, cash equivalents, marketable
securities and long-term investments $37,537,993 $36,573,276
Cash, cash equivalents and marketable
securities - restricted 190,661 4,403,188
Accounts and notes receivable 4,184,973 ---
Property and equipment, net 2,500,703 3,775,269
Intangible assets, net 9,159,193 9,234,273
Other assets 2,162,967 8,455,687
----------- -----------
Total assets $55,736,490 $62,441,693
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable and accrued expenses $ 2,884,643 $ 5,072,405
Debt and capital lease obligations,
excluding convertible debt 322,884 5,529,471
Convertible debt 5,333,733 6,885,486
Deferred revenue 8,330,017 12,154,006
----------- -----------
Total liabilities 16,871,277 29,641,368
Series A Convertible Exchangeable
Preferred Stock --- 13,064,283
Total stockholders' equity 38,865,213 19,736,042
----------- -----------
Total liabilities and stockholders'
equity $55,736,490 $62,441,693
=========== ===========
CURIS, INC.
COMPUTATION OF DILUTED EARNINGS PER SHARE
(UNAUDITED)(2)
Three months
ended
December 31,
2002
------------
Net income applicable to common stockholders, GAAP Basis $12,070,253
Adjustments to reconcile to GAAP net income applicable to
common stockholders to net income for use in diluted net
income per common share calculation:
Interest expense on convertible notes 128,382
Accretion on Series A Convertible
Exchangeable Preferred Stock 180,225
-----------
Net income applicable to common stockholders after
assumed conversion of convertible notes and Series A
Convertible Exchangeable Preferred Stock $12,378,860
===========
Net income per common share - diluted $ 0.35
===========
Weighted average common shares for diluted net income
computation 35,528,208
===========
(1) See "Computation of Diluted Earnings Per Share" table attached
herewith.
(2) This table only covers the Company's operating results for the
three months ended December 31, 2002 because the Company has
incurred net losses applicable to common stockholders for all
other periods presented.
About Curis, Inc. Curis, Inc. is a therapeutic drug development company. The Company's technology focus is on regulatory pathways that control repair and regeneration. Curis' product development program involves using proteins or small molecules to modulate To insert a data signal into a carrier wave or direct current. See modulation. these pathways. Curis has successfully used this technology and product development strategy to produce several promising drug product candidates in the fields of kidney disease Kidney Disease Definition Kidney disease is a general term for any damage that reduces the functioning of the kidney. Kidney disease is also called renal disease. , neurological disorders, cancer, and hair growth regulation. Curis is based in Cambridge, Massachusetts This article is about the city of Cambridge in Massachusetts. For the English university town, see Cambridge, England. For other places, see Cambridge (disambiguation). Cambridge, Massachusetts is a city in the Greater Boston area of Massachusetts, United States. . For more information, please visit the Curis web site at www.curis.com. This press release contains forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. within the meaning of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995, including statements about Curis' future operating results and expected advances in its drug discovery and development programs. Such statements may contain the words "believes", "expects", "anticipates", "plans", "seeks", "estimates" or similar expressions. These forward looking statements are not guarantees of future performance and involve risks, uncertainties, assumptions and other factors that may cause Curis' actual results to be materially different from those indicated by such forward-looking statements. Actual results can be affected by a number of important factors including, among other things: adverse results in Curis' and its strategic partners' product development programs; difficulties or delays in obtaining or maintaining required regulatory approvals; Curis' ability to obtain or maintain the patent and other proprietary intellectual property protection necessary for the development and commercialization of products based on its technologies; changes in or Curis' inability to execute its realigned business strategy; the risk that Curis does not obtain the additional funding required to conduct research and development of its product candidates and execute on its business plan; unplanned cash requirements and expenditures; risks relating to Curis' ability to enter into and maintain important strategic partnerships, including its ability to maintain its current collaboration agreements with Genentech, Ortho and Wyeth; the risk that competitors will discover and develop signaling pathway-based therapeutics therapeutics Treatment and care to combat disease or alleviate pain or injury. Its tools include drugs, surgery, radiation therapy, mechanical devices, diet, and psychiatry. faster and more successfully than Curis and its collaborators are able to; and other risk factors identified in Curis' most recent Annual Report on Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. , Quarterly Report on 10-Q and any subsequent reports filed with the Securities and Exchange Commission. In addition, any forward-looking statements represent the Company's views only as of today and should not be relied upon as representing its views as of any subsequent date. Curis disclaims any intention or obligation to update any of the forward-looking statements after the date of this press release whether as a result of new information, future events or otherwise. |
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