Curis Inc (CRIS) 2011 Q2 法說會逐字稿

Good day, ladies and gentlemen, and thank you for standing by. Welcome to the Q2 2011 Curis earnings conference call. Rachel and I will be your operator today. During the presentation, all participants will be in a listen-only mode. After the speakers' remarks, you will be invited to participate in a question-and-answer session.

I would now like to hand the call over to the host for today's call, Mike Gray, Chief Financial Officer. Please go ahead.

Thank you and thanks, everyone, again for joining us this quarter. During today's call we will provide you with an update on our corporate developments and also discuss our second-quarter 2011 financial results.

Before we begin, as always, I would like to advise you that this conference call contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 including, without limitation, statements relating to our plans and expectations for advancing ongoing and planned clinical trials CUDC-101 and CUDC-907. Our and our collaborators expectations concerning the further development, clinical stage programs under collaboration such as vismodegib, which is also referred to as GDC-0449 and RG-3616 and Debio 0932, including the expected timeline for Genentech and Roche's regulatory submissions for vismodegib in advanced basal cell carcinoma. As well as the potential therapeutic benefits of our development candidates including vismodegib, Debio 0932, CUDC-101 and CUDC-907.

Actual results may differ materially from those indicated by the forward-looking statements in this conference call as a result of various important factors including the following. Genentech and Roche may be delayed in making planned regulatory submissions to seek marketing approval of vismodegib for advanced BCC. Genentech and Roche may not demonstrate to the satisfaction of the FDA or any comparable foreign regulatory agency the safety and efficacy of vismodegib in the treatment of advanced BCC or other indications.

Genentech and Roche may not conduct necessary registration trials for vismodegib in indications other than advanced BCC. We may not successfully advance the research and development of our proprietary network-targeted cancer programs including CUDC-101, CUDC-907, Debio Pharma may not successfully progress Debio 0932 beyond baseline clinical testing and into later stages of clinical trials. How we face competitive risks and pressures relating to our ability to maintain and enforce our intellectual property, we may be unable to successfully continue our collaborations with Genentech and Debiopharm, or enter into new collaborations on favorable terms, if at all. We may encounter unplanned operating expenses in the estimates of the period in which our current cash and working capital will be available to fund our operations may prove inaccurate.

We also face other risk factors which are described in our Quarterly Report on Form 10-Q for the quarter ended March 31, 2011, and in other filings that we periodically make with the SEC.

We caution you that we are making these forward-looking statements as of today and that we may not update any of the statements even if events develop subsequent to the date of this call to cause these estimates and expectations to change.

I would now like to introduce Dan Passeri, Curis's President and CEO who will discuss our corporate highlights and will provide an update on our pipeline. Following Dan's remarks, I will return to review our financial results for the second-quarter 2011 and then we will open the call for questions. Dan?

Thanks, Mike. Good morning, everyone, and thanks for joining us on today's call.

We had a very productive second quarter which was highlighted by our collaborator Genentech's presentation in June, results from its pivotal study of vismodegib in advanced basal cell carcinoma patients at the 7th European Association of Dermatol Oncology Congress. I will elaborate upon this program in more detail in a moment, but just at this point I want to highlight that we are highly encouraged by the strength of the data generated in this clinical study, including the overall response rates observed. And we are looking forward to Genentech and Roche's plan upcoming regulatory submission for vismodegib in this patient population.

Also I just want to underscore that we are extremely pleased with the high quality of the trials conducted by Genentech and Roche and again I will elaborate upon these results momentarily.

We also continue to make good progress with our internal programs for our network target inhibition and in particular our first class EGFR, Her2, and HDAC inhibitor, which is designated CUDC-101.

In our Phase I expansion study, we've fully enrolled four cohorts out of 5 and continue to enroll in the fifth which is for non-small cell lung cancer, which we added more recently. And in addition, we recently initiated a Phase I trial of CUDC-101 in advanced head and neck cancer patients. We are currently recruiting patients in this study and expect that we will dose the first patient in the study in the very near term.

I will elaborate again more on these data and other developments with CUDC-101 later in the call.

I am also going to briefly touch upon our progress with CUDC-907 which is our drug candidate, a first in class Pi3 kinase and HDAC inhibitor, as well as our Hsp90 inhibitor that is partnered with Debiopharm. And that is designated Debio 0932.

First, I would like to begin with an overview of vismodegib, which is our first-in-class hedgehog pathway inhibitor, which is being developed by Roche and Genentech under our 2003 collaboration agreement.

In March, Genentech and Roche notified us of the positive outcome in the pivotal Phase II clinical trial in advanced BCC. The study met its primary endpoint showing that vismodegib substantially shrank tumors or healed visible lesions with observed response rates of 43% of patients in locally advanced BCC cohort and 30% of patients in the metastatic BCC cohort as assessed by an independent review of facility.

Advanced BCC is a severe form of basal cell carcinoma that includes cutaneous BCCs considered inoperable by the treating physician, as well as BCCs that have metastasized to other tissues and organs. Based on the results of this study, Roche has stated it anticipates filing an NDA with the FDA in 2011 to seek approval to commercialize vismodegib in the US. The filing timeline for our European regulatory submission seeking to commercialize the drug in Europe is dependent on ongoing discussions with the European Medicines Agency or EMA.

Importantly, we will be eligible to receive milestone payments for the US and European territories, assuming that's submissions are filed by Roche and accepted by the applicable regulatory agencies. We are also eligible for additional milestone payments upon regulatory approval, along with royalties on any future sales of vismodegib.

In June, Genentech presented detailed results from this study at the European Association of Dermato-Oncology. The primary endpoint of the study's overall response rate as assessed by an independent review of facility with secondary endpoints including investigator-assessed overall response rate, progression-free survival, overall survival, and duration of response in all evaluable patients, including locally advanced BCC or metastatic BCC patients.

As background, Genentech had previously reported Phase I clinical trial results in the New England Journal of Medicine in which an investigator assessed response rate of 55% was observed in 33 patients with advanced BCC, treated with vismodegib, including those with locally advanced or metastatic BCC.

In the pivotal Phase II trial, study investigators assessed the overall response rate to again be 55%, with 60% in the locally advanced BCC cohort and 46% in the metastatic BCC cohort. The overall response rate in the pivotal Phase II as assessed by an independent review facility showed that vismodegib substantially shrank tumors or healed visible lesions with observed response rates of 43% of patients in the locally advanced BCC cohort and 30% of patients in the metastatic BCC cohort.

The clinical benefit rate which is defined as patients who experienced response as well as those who experienced prolonged stable (technical difficulty) more than 24 weeks showed vismodegib shrank tumors or healed visible lesions or prevented them from growing any further in 75% of patients with locally advanced BCC and 76% of patients with metastatic BCC as assessed by the independent review.

The median duration of progression free survival by independent review for both metastatic and locally advanced BCC patients was 9.5 months. The median duration of response by independent review was 7.6 months for both metastatic and locally advanced BCC patients. The median duration of response as assessed by study investigators was 12.9 and 7.6 months for metastatic BCC and locally advanced BCC patients, respectively.

The most common adverse events observed in this study, and that's observed in greater than 20% of patients, includes muscle spasms, hair loss, altered taste sensation, weight loss, fatigue, nausea, decreased appetite, and diarrhea. Serious adverse events or SAEs were observed and 26 patients or 25%. Four of these patients or 4% had SAEs that were considered to be related to vismodegib including one case of blocked bile flow from the liver, dehydration with loss of consciousness, pneumonia accompanied by an inability of the heart to pump enough blood, and the sudden arterial blockage in the lung, pulmonary embolism.

Fatal events were reported in 7 patients or 7% of which none were considered by the investigators to be related to vismodegib. And all fatalities, pre-existing risk factors and comorbid conditions were present.

The pivotal Phase II clinical trial is an international single arm, multi-centered two cohort, open label base to stick study that enrolled 104 patients with advanced BCC, including 33 metastatic and or 71 locally advanced BCC.

Locally advanced BCC included patients whose lesions were inappropriate for surgery, that is inoperable, or in whom surgery would result in substantial deformity and disfigurement, and for which radiotherapy was unsuccessful or contraindicated. Metastatic BCC was defined as BCC that had spread to other parts of the body, including the lymph nodes, lungs, bones, and or internal organs.

Study participants received 150 mg of vismodegib orally, once daily until disease progression or until intolerable toxicity was observed.

Tumor responses for metastatic BCC were measured by resist criteria and for locally advanced BC, by a novel composite endpoint which included reduction of size of lesions of at least 30% in the longest dimension and/or complete resolution of locally advanced alteration.

Also, I just want to underscore that we anticipate a perspective market potential of vismodegib for the advanced BCC patient population to be quite significant as it is estimated that there are approximately 2 million new cases of BCC annually in the US alone. And it is estimated that advanced BCC accounts for approximately 1.5% of this number.

So therefore, we estimate that the patient potential patient population for this indication could approximate 25,000 to 30,000 patients per year. So we are extremely pleased with the results of this study and look forward to providing updates as Genentech and Roche progress vismodegib in the regulatory process.

In addition to the pivotal study for advanced BCC, Genentech is also conducting a separate Phase II clinical trial of vismodegib in patients with operable nodular basal cell carcinoma, which is a less severe form of the disease and accounts for an estimated 60% of the approximately 2 million BCC diagnosed annually in the US. It is also important to underscore that the underlying causation of operable BCC is basically the same as an advance that is a mutation in the hedgehog pathway, except in the operable population it is a much less severe and more stable form of the disease.

This study was initiated by Genentech in October of 2010 to just vismodegib as a (technical difficulty) therapy in approximately 50 patients with operable nodular BCC in a US-based open label two cohort total trial. All patients will receive 150 mg daily of an oral dose of vismodegib for 12 weeks.

The primary outcome measure for the first cohort is the rate of complete histological clearance of the target nodular BCC lesions at the time of tumor excision, which may occur up to 12 weeks following initiation of treatment, while the primary outcome measure for the second cohort is the rate of durable complete clearance of target nodular BCC lesions at the time of excision which may occur up to 36 weeks following initiation of treatment.

In addition to the BCC clinical trials being conducted directly by Genentech and Roche, vismodegib is also being explored in a significant number of other cancers and trials under a collaborative agreement between Genentech and either third-party investigators or the US National Cancer Institute or NCI, including an investigator-sponsored study in treating BCC in patients with basal cell nevus syndrome or gorlin syndrome.

These are patients that are born with one copy of the two mutated at birth and therefore highly susceptible to multiple BCCs throughout life. As well as studies in medulloblastoma, sarcoma, and anglioblastoma, [multiforma] and in pancreatic small cell lung, gastroesophageal junction, gastric, breast, and prostate cancers among others.

I would now like to turn to provide an update on CUDC-101, which is our lead's proprietary drug candidate from our network-targeted cancer disruption program. As many of you are aware, we believe that CUDC-101 is exemplary of our overall approach to designing all our drug candidates in which we aim to enhance the therapeutic effect and durability of clinical response by designing molecules that attack cancer cells at multiple complementary and potentially synergistic points of intervention. And we refer to this approach as cancer network disruption.

Before I discuss our Phase I expansion study with CUDC-101, it is important to note that during the second quarter, we initiated a Phase I dose escalation of -- trial of CUDC-101 in HPV negative advanced head and neck cancer in combination with radiation and cisplatin. We are currently recruiting patients at our first two active clinical centers and we look forward to enrolling the first patients in the study upon which we plan to provide a further update in the near term.

In addition, we are also currently conducting a Phase I expansion study with CUDC-101 which we began treating patients in the study in August 2010 to test the CUDC-101 in approximately 50 patients with specific tumor types, including head and neck, non-small cell lung, breast, gastric, and liver cancers. Currently we've treated 44 patients to date in this study and as a reminder, this is designed as an open label study and patients are treated with CUDC-101 at the maximum tolerated dose of 275 mg per meter squared. And the average sized adult, that's approximately 500 to 600 mg.

The primary objectives are to compare the safety and tolerability of CUDC-101 in subjects with specific advanced solid tumors when the drug is administered either on a five days per week schedule, with a schedule including a one week on, one week off schedule, which was the dosing schedule used in our Phase I dose escalation clinical trials, or on a three times per week schedule with three weeks on and one week off.

Just to remind everyone, this is an IV formulation and that is the reason we are providing the week off on study to provide some convenience for the patient.

The secondary study objectives include evaluation of a pharmacokinetics and pharmacodynamic biomarkers following CUDC-101 administration and to assess the activity of CUDC-101 in the indications being surveyed. I think it is an important point just to underscore is that we are really performing more of a systematic survey of tumor types looking for clinical activity and also aiming to decipher and delineate molecular mechanisms so that we can do, hopefully, patient stratification selection on a going-forward basis.

We fully enrolled all patients in each 10 patient cohort except for the non-small cell lung patient cohort. We added [this cohort] in the study during the fourth quarter of 2010 to focus on a subset of non-small cell lung cancer patients that have responded to, but then subsequently became refractory or resistant, and therefore progressed on erlotinib.

We are exploring this patient subset to gain information on whether CUDC-101 may be able to improve the clinical outcome of these patients who typically experience very rapid disease progression on subsequent therapies following progression on erlotinib. And again, we look at this as an ideal study to delineate and decipher mechanism of action in patient selection and we think this would ideally position 101 competitively against EGFR inhibitors such as erlotinib if we can show response in this refractory patient cohort.

We are also encouraged by the data that we generated to date in the Phase I expansion study. As an example, we have observed stable disease in this study in five patients with advanced liver cancer. These patients have all received prior therapies and became refractory and resistant. So these are advanced, aggressive cancers. Two patients in this study with CUDC-101 was on study for over six months into the seventh month, with the patient -- that patient showing a shrinkage of greater than 20% with another patient still remaining on study that's been on drug for approximately 11 months, while two additional patients achieved stable disease for approximately four months prior to disease progression.

And just to give some clarity, these patients coming into the study have an average progression-free survival of approximately two months. So we are really encouraged by the insights that we are observing here.

Importantly, some of these patients have also previously failed sorafenib, which is the only currently approved targeted therapy for advanced unresectable liver cancer. And just to give a qualifier, sorafenib as the only approved targeted therapy also has some pretty significant adverse events and we think that is one of the other real attributes we have observed with 101. It appears to be very well-tolerated by these patients.

So based on these promising albeit early observations, we are evaluating various options for the testing of CUDC-101 in the liver cancer setting, while recognizing the challenges of properly positioning the IV formulation of the drug, particularly if we are looking at long-term chronic use such as in this liver setting.

So we are looking at a number of alternatives to exploit these observations, including the prospects of doing some studies in the Asia population where liver cancer is a very significant indication.

In addition, we've observed stable disease for greater than four months in a refractory gastric cancer patient. So a subset of gastric cancer patients are known to be EGFR and Her2 positive; so one of the things we need to do going forward is very systematic access to biopsy tissue to be able to stratify patients, hopefully proactively, but ideally, also retrospectively, so we can identify patients that are responding and make sense out of it at a molecular level.

We have also achieved stable disease for approximately nine months in a patient with advanced breast cancer. And I again want to underscore these patients have all been heavily pretreated in previous trials and have become refractory.

As an additional update, we have been collecting circulating tumor cells from all patients involved in this study in an effort to demonstrate that CUDC-101 is heating its intended targets. Based on a preliminary analysis of these circulating tumor cells, isolated from 14 patients enrolled in the Phase I expansion study, we showed that in approximately 65% of patients, we had at least two or more of the protein targets, that is EGFR, Her2, and HDAC were modulated following CUDC-101 therapy in a way consistent with the drugs' proposed mechanism of action. So this is encouraging, albeit still anecdotal.

More samples are being collected from patients being enrolled in the study and data will be presented in future updates.

As I mentioned earlier, we also recently initiated a Phase I trial of CUDC-101 in advanced head and neck cancer patients whose cancer is human papilloma virus or HPV negative. And just to provide context, HPV as a virus infection, is known to be a driver in some head and neck cancers which is approximately a third of the total number. It's estimated that approximately 45,000 new cases of head and neck occur annually of which about a third are HPV positive.

These patients typically respond well to radiation and cisplatin therapy, The radiation basically breaking up the viral genome, which is the driver -- primary driver of the cancer. So what we're doing is focusing on the HPV negative, which comprises approximately two thirds of the head and neck cancer patient population. And these patients typically respond less favorably to radiation and cisplatin, but are known to be in the majority of cases, EGFR positive having a component of driving proliferation and approximately 20% to 40% also have a Her2 involvement.

So the primary objective of this study is to evaluate the safety and tolerability of CUDC-101 when administered in combination with the current standard of care. And in this case, radiation therapy daily for a seven-week regimen along with intermittent cisplatin, which is a chemotherapeutic drug.

So we will be conducting this trial where we will be giving CUDC-101 for the first week as a stand-alone agent; and these are going to be naive patients, so we are quite excited about the prospects of treating naive patients. Will be doing a pre- and post-one-week treatment biopsy. So we will be taking samples from the tumors and characterizing them at a molecular level pretreatment and post treatment.

We are currently recruiting patients in our two active studies that are now open and anticipate that we will enroll and treat the first patient in the study in the near term. We expect that we will add two additional centers to this study in the coming months.

We believe that the head and neck cancer indication represents a promising and ideal indication for the current formulation of CUDC-101 and is based on a number of attributes. First and foremost, it is the molecular characteristics of head and neck cancer, HPV negative head and neck cancer, whereby, as I stated, the vast majority have an EGFR signaling component driving cancer proliferation as well as a Her2 signaling component.

HDAC inhibitors have been reported by various studies to synergize with radiation therapy. The strength of our preclinical data in head and neck cancer cell lines and xenograft models demonstrate therapeutic synergy of 101 when combined with intermittent dosing of cisplatin, the biological activity observed, including regression in two head and neck cancer patients in our Phase I dose escalation is very encouraging, and that's as a single agent. And finally the evidence of the stable disease observed in our ongoing Phase I expansion study.

So we believe that the CUDC-101's current intravenous formulation will be suitable for this patient population. Again because these patients are required to receive daily radiation therapy for a seven-week interval at their respective clinic centers.

Our strategy then is to use this as the proof of concept of the application of the IV form with combination therapy and then look at deploying additional trials to exploit it in a similar manner with the current formulation.

We also are continuing our efforts to advance an oral formulation of CUDC-101 to follow on behind the proof of concept of the IV and the oral form we are expecting to be able to conduct cycle testing late 2011, early 2012. We believe that an oral form of CUDC-101 may provide greater flexibility in dosing scheduling, and thereby have a greater control of exposure, and will make the molecule more competitive in certain cancer types such as non-small cell lung cancer where patients are generally on therapy for several months ongoing and where competing commercially available molecules are orally administered.

So we believe that an oral form will provide us with greater application to various indications, greater ease of use for patients, and make the drug more competitive on a broader scale. Depending on the successful completion of the ongoing formulation and preclinical development work, again we intend to file an IND in late 2011 with the -- or early 2012 with the appropriate regulatory documents to begin Phase I testing.

To further aid development of CUDC-101, Curis also plans to initiate a short windows study in patients with either untreated, pre-operative head and neck cancer, or Her2 positive breast cancer. Now the aim of this study is to determine the maximal amount of suppression of EGFR, Her2, and HDAC after a varied number of doses of CUDC-101.

So in essence it is a survey for us to get detailed data on drug administration, dosing, and its corresponding exposure levels and then looking for evidence of direct and robust suppression of the intended targets. So this is to delineate the molecular mechanism of the drug with robust clinical data. The study is expected to be initiated in the fourth quarter of 2011 and will be conducted at two to three centers in the US.

Now moving onto other drug candidates from our pipeline. I will first turn to CUDC-907 which is an orally available send that in small molecule inhibitor of Pi3 kinase and HDAC. We selected CDC 907 as a development candidate from our network targeted cancer programs earlier this year and we believe that our selection of this compound, along with previously selected candidate CUDC-101 and Debio 0932, which was formally designated CDC 305 -- that is our Hsp90 inhibitor -- continued to provide validation for the quality of our science and our efforts for developing innovative next-generation targeted cancer therapies for a wide range of cancer types.

We expect to initiate IND-enabling studies for CUDC-907 in the near term; and assuming a favorable outcome, we plan to file an IND application for this compound in early 2012. We look forward to providing further updates on CUDC-907 as this molecule advances towards IND filing and Phase I initiation.

I would like to now briefly turn to our Hsp90 program, which is being developed by our partner Debiopharm under our August 2009 license agreement. The lead candidate under this agreement is Debio 0932, which is a Curis-invented and preclinically developed synthetic non [gildalomycin] small molecule HsP90 inhibitor and it's important to underscore non gildalomycin molecule aspect whereby a number of HsP90 inhibitors of that class had to be pulled because of toxicity concerns and we are pleased that in the dose escalation the drug appears to be very well-tolerated at a good therapeutic range.

Debiopharm began treating patients in a Phase I clinical trial of Debio 0932 in April of 2010. The Phase I clinical trial is designed to evaluate the maximum tolerated dose or MTD and safety profile of Debio 0932. The first part of this study, or the Phase Ia is an open label, multicentered dose escalation trial, evaluating the safety and tolerability of escalating multiple doses of levels of Debio 0932 as a single agent given orally in patients suffering from advanced solid tumors.

Dose limiting toxicities or MTD in pharmacokinetic parameters will be determined using both every day and -- I'm sorry, every other day, and daily administration regimens to guide the recommended Phase Ib dose in schedule. A secondary objective will be to assess whether changes in pharmacodynamic biomarkers indicative of the inhibition by Debio 0932 can be reliably measured in patient samples.

Again, this is the sort of ongoing trend in cancer therapy, where this would allow Debiopharm to preselect or retrospectively stratify patients based on the hitting of that biomarker.

The objective of the Phase Ib study and expansion cohort of certain solid tumor patients will be to further assess the safety profile, pharmacokinetic and pharmacodynamics of Debio 0932, and a potential Phase II dose level and to make a preliminary assessment of antitumor activity in patients with advanced solid tumors. Debiopharm has recently established the MTD of Debio 0932 in its Phase I study and is planning to advance the compound into the Phase Ib portion of the study in the near term.

We are pleased with the results that have been communicated to us in terms of the MTD being at a very attractive range that we believe will have an attractive therapeutic window with this compound.

We are eligible for our next milestone under this agreement if and when Debiopharm treats its fifth patients in a Phase II clinical trial assuming that Debiopharm advances 0932 interface 2 clinical into Phase II clinical tests.

I would like to now to the call back over to Mike for a financial discussion and following Mike's remarks, we will open the call up for questions.

Thanks, Dan. For the second quarter of 2011 we reported a net loss of $4.9 million or $0.06 per share as compared to a net loss of $2.1 million or $0.03 per share for the same period in 2010. Revenues for the second quarter of 2011 were $400,000 as compared to $100,000 for the same period in 2010. The increase is related to a $300,000 license plate payment that we received this quarter.

Operating expenses for the second quarter of 2011 were $5 million as compared to $4 million for the second quarter in 2010. R&D spending was $3.1 million in 2011 Q2 as compared to $2.2 million for the same period in 2010, an increase of $900,000. The increase related primarily to increased spending associated with our continued development of CUDC-101, particularly the ongoing Phase Ib expansion study.

G&A spending was $1.9 million for the second quarter of 2011 as compared to $1.8 million in the second quarter in 2010. This modest increase is primarily attributed to increased legal costs, specifically patent costs and fees related to foreign patent filings.

Other expense was $300,000 for the second quarter of 2011 as compared to other income of $1.8 million for the same period in 2010. Other expense and income are primarily caused by the change in the fair value of a warrant liability that we incurred in connection with our January 2010 registered direct offering.

For the six-month period ending June 30, 2011, we reported a net loss of $11.7 million or $0.15 per share as compared to net income of $2.7 million or $0.04 per basic share outstanding and $0.03 per fully diluted share outstanding for the same period in 2010.

Revenues for the six months ended June 30, 2011, were $500,000 as compared to $12.7 million in the second quarter -- or sorry in the first six months of 2010. 2010 revenues were primarily derived from an $8 million milestone payment that we received from Debiopharm for the achievement of the development objective of Hsp90 inhibited Debio 0932. We also received $4 million related to a settlement agreement with a former collaborator during the first half of 2010.

Operating expenses were $10.5 million for the six months ended June 30, 2011, as compared to $10.9 million for the same period in 2010. R&D expenses were $6.2 million for the six months ended June 30, 2011, as compared to $4.7 million for the first six months of 2010. G&A expenses were $4.3 million for the first six months of 2011 as compared to $6.2 million for the same period in 2010.

Other expense was $1.8 million for the six-month period ending June 30, 2011 as compared to other income of $900,000 for the first six months of 2010. As of June 30, 2011, our cash, cash equivalents and marketable securities totaled $32.7 million and there was 76.5 million shares of our common stock outstanding. We continue to believe that our cash, cash equivalents, marketable securities, and working capital at June 30, 2011, should enable us to maintain our current and planned operations into the fourth quarter of 2012.

As Dan previously highlighted, we have the right to receive milestone payments from our collaborator Genentech, assuming that vismodegib regulatory submissions are filed and accepted and we are also eligible for additional milestone payments upon regulatory approval to commercialize vismodegib in advanced BBC in the US and European markets. Any such payments would obviously be expected to extend our runway significantly.

That concludes the prepared remarks and we will now open the call up to questions. Operator?

(Operator Instructions). Joe Pantginis.

Thanks for taking the call and congratulations on the progress. Dan, you touched upon this a little bit, but I was just wondering if you could add a little more color. Obviously with vismodegib being at the forefront right now based on the positive pivotal data, there are questions that are obviously going to come out more and more with regard to the size of the market and the market opportunity in the advanced population. So I know you did touch on it as I said, but could you maybe give a little bit more color with regard to yours and Roche's basis of the projections that you alluded to earlier?

Yes. The only color we can provide this point has to do with the incidence rates of the indication as a subset of the overall number. Historically, we were going on a quite old report of the incidence rate of BCC. More recently, the American Cancer Association has put out numbers that provide a range of greater than 2 million new BCC cases in the US. And based on that number it's estimated that approximately 1.5% of the total number fall in the category of advanced. That is, inoperable and/or metastatic.

So just extrapolating, we are estimating the number to be in the range of 25,000 to 30,000-plus patients annually would be accessible for the drug. In terms of the market size from a dollar value, that is really going to be predicated on the pricing, which we haven't had guidance on tod ate.

Sure. That is very straightforward. Thank you. And if I can just have a quick follow-up maybe from Mike. You obviously alluded to the various milestones you have coming in from Roche on potential filings and approvals, any potential visibility as to the size of these milestones?

I can shed a little, they are confidential under the terms of our agreement, but let me shed a little bit of light. So we have under this molecule vismodegib, of a total of $115 million. That's 115 million dollars in potential milestones under the contract of which we've received $18 million today. So leaving us with $97 million remaining.

Two of those we have stated are tied to additional indications advancing into Phase III and those totaled $12 million. So there are $85 million that are really based on regulatory filings and approvals. We have no sales-based milestones under this agreement.

So, I know it's a little bit roundabout, but the milestones associated with US and European regulatory submissions and then downstream approval to commercialize don't quite make up half of that remaining $85 million, but there are tens of millions of dollars to Curis and just based on our historical burn of somewhere around $20 million, maybe a little north of $20 million as 101 moves forward, clearly, material sorts of capital for Curis going forward.

Great. Thank a lot.

Let me just add one comment also on the incidents, which I'm not sure that Dan touched on it. There is actually BCC unlike most other cancers isn't broken down into a Cancer Registry report under Cancer Registry and there's not -- these subsets are not really easily identifiable, but I would just point you to an E abstract from this year's ASCO which was prepared by Genentech and also a third-party CRO which looked at close to a couple hundred thousand cases of basal cell over a period of time.

And the purpose was really to look at the cost and methods of treating different forms of basal cell, but within that, out of a couple hundred -- less than a couple hundred thousand, but about 189,000 patients, so big sample size. They bucketed the patients into advanced, locally advanced rather metastatic and all other.

And out of that 190,000 patient case reviewed the incidents that fell down to metastatic and local advance was 1.4%. So I think that provides at least some credible basis for this 1.5 percentish as much of what the potential patient pool could be that could be on label.

Great. Thanks a lot. Very helpful.

Jason Kantor.

Thanks for taking the question and thanks for all of the detail. On CUDC-101, I don't know if I got all the detail here, but it sounds like you are seeing at least one stable disease patient in pretty much every one of your cohorts. So how do you think about moving this drug forward question? I mean how do you pick one indication over the other? And are these really signs of single efficacy in your mind?

Yes. It is a very important question. And I think it underscores basically the overall strategy we have been using. So, if you think of a drug's design, we went after a derisk approach to position Curis in a competitive manner in a very crowded landscape by taking advantage of what was known currently from clinical data of existing drugs. And that is, single agents where these mechanisms have been validated are typically not providing robust responses. And that is because cancer cells are very dynamic in response of disregulated systems.

So we wanted to basically take a multi-pronged strategy where we're designing drugs against clinically already validated targets with prototype drugs that we could be then assess how we could modify them to integrate these various pharmaco for us. So it is derisked from that standpoint.

To your question, we then went into the clinic where you recall I stated publicly when we filed the dose escalation trial, we would not take the drug forward unless we saw signs of clinical activity, i.e., if all we saw was a role tolerated drug, we would not progress because we felt we hadn't addressed the competitive positioning of the drug with evidence. And we feel we accomplished that.

We saw in the Phase I, the drug very well tolerated, and just to remind you, that was one of the criticisms we got early on was the drug will probably be more toxic. And in fact it has proven not to be.

And we saw very impressive regression in two head and neck cancer patients. Now these are heavily pretreated, refractory-advanced patients, as a single agent we saw regression. And again, head and neck is known to have an EGFR Her2 component and we had a confirmed PR in a gastric cancer patient.

Now this was on the everyday dosing one week on, one week off with the IV. We then decided rather than to go into a Phase II to conduct a survey of several tumor types for to investigate further the potential application in a number of tumor types where EGFR and/or Her2 have been implicated, and to survey a more convenient dosing schedule for patients. And that is the every other day for three weeks on, one week off.

So what we've seen with that schedule is we have a significant number of patients. So in every indication tested, and again, just to remind you, it is liver, head and neck, breast, gastric and non-small cell lung -- in each indication we have seen evidence of long-term stable disease obviously not in every patient, but in each indication in refractory patients.

So clearly the drug is active. It is effective against patients that have received prior therapies, including target therapies that were refractory and we have also gained some insight on dosing scheduling. The every other day for three weeks on, one week off is giving us long-term stable disease in a number of settings. The everyday schedule one week on, one week off, we saw three partial responses, where we saw a good regression.

What we have deciphered from this is we have an active drug. The circulating tumor cells that we taken, strongly suggest we are hitting the three targets. We are seeing activity in these refractory patients and what we have learned is the IV formulation we have -- potentially we have an exposure issue. It is possible with the every other day three weeks on, one week off, we are not hitting the targets hard enough each day, but we are hitting it hard enough to shut off the proliferation cascades. So we have learned a lot from these studies.

We now want to access now how can we position the IV formulation to maximize its competitive positioning and value? Head and neck is ideal for that study. We will be giving the IV for eight straight weeks, no one in combination with radiation cisplatin whereby two thirds of the head and neck population, the HPV negative do not respond that favorably to the therapy. So we are expecting to see good synergy as evidenced by preclinical data.

We can then use that as a rationale for launching subsequent combination trials, first with other [BCC] cancers and other indications where we can use in combination. So that is the basic strategy right now. We think we have actually learned a really valuable amount of information.

What we now want to do is make sure we are analyzing the molecular characteristics of patients so we have several stable disease, long-term stable disease and breast cancer, for instance. We had a stable disease in the Phase Ia. We have got two that are greater than three, four months in the 1V cohort. One is still on drug at 10. So the question now is what's different about those patients at a molecular level that they are responding favorably to the drug. So now we want to make sure that we are accessing biopsies from patients and doing a detailed molecular analysis so we can do a retrospective patient stratification, so that we can increase the probability of success going forward.

So long-winded answer, but I hope I addressed the question.

Thanks.

Ted Tenthoff.

Thank you very much for the thorough update. I appreciate that.

Just looking into the back half and you went into some of this, Dan, on your prepared remarks. But what should we be focusing on in terms of data presentations in the back half? And I guess kind of following up on the last question, with the data starting to come in here, can you put in perspective either partnering interest around 101 or what your view might be on how to broaden those studies as per Jason's question too?

Yes. So two halves of the question. The first is data presentation and the second half of 2011. I think that obviously the key inflections for us going forward, 2011, if the NDA filing for hedgehog and the advanced BCC and, by the way, I think that represents a substantial derisking of our business model and that. We get now capital access derisking. We have the prospects of the EU filing and then with 101, we would anticipate providing an update on the Ib expansion cohort.

We should have fully enrolled and analyzed the data. And we will present by the end of the year details of these results in terms of responses, molecular characteristics, etc.

The non-small cell lung, by the way, I think is an elegant experiment where we are taking a patient population known to be EGFR positive and put on erlotinib, responded to the drug, became resistant, either through the T790 clonal expansion of a mutant form that the drug no longer acts against, or through up regulation of [met] which is a bypass mechanism.

So anecdotally, we have already seen patients have a greater than four months stable disease. We didn't have disease progression. The patient actually withdrew consent because of clinic fatigue. You know had come -- being involved in multiple clinical trials.

So that's anecdotal, but it is very encouraging because these patients come into this trial with refractory aggressive advanced non-small cell lung carcinoma, very poor prognosis, average PFS of an erlotinib failure is one month. So it is still early. I don't want to overemphasize that, but that in itself is a very interesting observation from the clinic.

So we will provide updates on 101 by the end of the year. We should launch the windows study by the end of the year and we have the oral IND filing by end of year, early 2012 and then 907.

Just add a couple of comments. So, Ted, I think Genentech and Roche are hoping to present advanced basal cell data again probably a slightly modified presentation, but it is (technical difficulty) which is coming up around the corner.

And then for 101, I think, depending on our confidence that we can have that sufficiently wrapped up, we have I think until early September to file or to submit an abstract for EORTC in the fall. And I would expect (multiple speakers) -- we would have something on 907 there as well. So the hope is that we would have presentation on each of the core proprietary molecules at that conference, which I believe is in November.

Great. And (technical difficulties) [setting back half]. And just real quickly on the partnering site then.

Yes. And we will just add on the unknown is if we are going to have any updates coming out of the NCI. So that's potentially over the next six months we could have several of those laid out which we don't have any insight on yet.

Yes, and then partnering prospects and then broadening application. You know, we have had ongoing discussions with several companies regarding 101. And those continue. We have some partnering opportunities that we are assessing. Our objective really is to try to maximize value by adding as much insight into the drug's mechanism, its application, and we are convinced the IV will have a niche and the key is the oral form will dramatically broaden out the potential.

So I think it would be prudent if we can just sustain the ongoing strategy to create greater value and greater leverage in those discussions. So we are talking to a range of companies from large multinational known to be leaders in molecular oncology through smaller pharma to biotechs.

So we are looking at several options and we will play that out, based on the facts as they present.

Makes a lot of sense. Good strategy, so keep up the good work.

Appreciate it. Thanks.

Brian Skorney.

Good morning. Just a couple of questions, starting really on vismodegib. In Doctor [Secola's] presentation at IAIDO, he had the waterfall plots for the metastatic and locally advanced patients. And when I'm looking at them, it seems like there were three patients in the metastatic cohort that appeared to meet the reduction in tumor size to meet resist criteria for PR, but weren't classified as a PR. And similarly, there is about seven patients in the locally advanced cohort that seem to hit the response for as far as a change in the lesion diameter to be a PR that weren't classified as PR. And one of them was actually classified as progressive disease.

I just wonder have you guys talk to Doctor Secola or your peers at Rauch and gotten any color on what the disconnect is between the tumor measurements and the response classification?

So the shorter answer is no, we have not spoken to the clinician directly. We have had some preliminary discussions with Genentech on the discrepancy of the characterizing lesions as a PR or stable. And as you are underscoring them, I think that's what's -- if that characterization that has changed the statistical readout of being investigator response rate versus the independent review, it's how they've classified it. And it's -- some of them are quite puzzling because it looks like we actually have complete clearance on a couple of the lesions that were classified as stable disease.

We don't have insight from the review process of the independent review as to why they characterized it as stable disease. But we do know there is a discrepancy of how they have been classified and characterized and that's the reason there's a difference in the statistical numbers that have reported.

Despite that, I think even the independent review of the numbers are very encouraging.

Great. And then just moving on 2101, I'm just trying to score how the patients are doing here. Heard you mention five liver cancer patients with stable disease, two breast cancer patients, one gastric, one head and neck, and you had also said that you are seeing stable disease in each of the tumor subtypes. Is there a lung cancer patient that's showing stable disease?

Yes, there is. So we are still enrolling on the lung. I mean we have only enrolled four patients to date. Two of them were on schedule B. Out of the scheduled B, one of them so -- by the way out of the four two withdrew consent. Based on clinic fatigue. Not fatigue from the drug, but clinic fatigue. And one patient out of the two on schedule B went to 4.5 months, had a stable scan at two months and four months. We were really encouraged and unfortunately that patient withdrew consent because of clinic fatigue. And that is they just wear out from being in clinical trials and coming into the clinic constantly.

I mean, it's one of the concerns with the IV formulation when you use it constantly. But that's very encouraging and it is anecdotal. So I don't want to overemphasize it, but it is an encouraging metric.

And just as a comment, we do expect to enroll the fifth patient in that cohorts on -- or treat the first -- fifth patient on Monday. They are enrolled and passed screening and everything. So that will leave five if we get that patient successfully started.

So if I just do a quick count here, is there 10 patients and the expansion cohort that you've seen in stable disease? From?

Yes. That's -- hang on, I will add it up for you real quickly. I think we've had 11 to date and then we've had three partial responses in the Phase Ia and II stable disease in the Ia.

Great. Thanks so much.

Ren Benjamin.

Good morning. The majority of my questions have been answered, but just a couple remaining. Has there been any discussion between Genentech and the FDA just regarding the status of the filing? Or any sort of dialogue between the agency and Genentech Roche regarding when this will happen and anything new about the application process?

We are a little bit removed from the application process, so we'll say and I am cautious about saying too much, but I will say that there has been one meeting, at least one meeting with FDA based on the feedback from that meeting. Genentech has continued to feel very comfortable to continue with the public statement. They will be cementing this application second half here in 2011. And that's probably about all I can say.

Okay.

We still feel very confident about this program moving into NDA. NDA being accepted and ultimately becoming a commercial product.

And this will likely be a priority review type application, and does there need to be a discussion with the European Agency as well before filing? Or is that also pretty much a foregone conclusion that that will occur in the first half of 2012?

There have been some discussions with the European health authorities and based on those, yes, we are hoping end of this year which may be a stretch, but early 2012 for filing in Europe as well. And we feel confident about that as well.

Because the discussions -- in summary the discussions with any regulatory agency to date has gone well.

Then just switching gears to 101, so clearly you are seeing a lot of response, clinical responses here, especially in the expansion cohort. Can you talk a little bit about the long-term management of this asset? So you talked, you mentioned in the prepared remarks regarding the IV formulation, you mentioned briefly regarding the oral formulation.

Going forward, obviously you have to choose one indication or two indications to go forward in and then you have to start thinking about how these patients can be treated more chronically going forward. And so, can you give us your sense as to how you envision this drug being used clinically in the future?

Yes. It is a very important question and, unfortunately, it doesn't have a simple straightforward answer. So we went into the Phase I, recognizing there would be limitations with an IV. We took a strategic approach in order to increase the probability of success of this drug in or prior to launching extensive costly Phase II, Phase III testing, to try to gain as much insight as possible.

And to the drug's activity, the PKPD exposure, issues, mechanism of action and finally possible patient selection.

Where we are now after the dose escalation which showed the drug is well tolerated. We have a therapeutic window where we are seeing response. To remind, again, in the dose escalation, we showed a window of 150 mg per meter squared to 275 mg per meter squared where we had a regression in a head and neck cancer patient at 150 mg per meter squared, as well as 275. So we showed that the drug is active.

Where we went in to Phase I showing if -- conveying to the public that if all we showed was the drug was well tolerated, we wouldn't take it forward. We showed we have activity. Now in the Ib we have shown in five tumor types that are known to have some involvement of EGFR Her2, we show activity in refractory patients. So that's very interesting and important from a market potential in position.

And to get to your question specifically, how we are going to position the drug from a practical standpoint, the IV formulation because of the limitations of convenience primarily and exposure, we are looking at head and neck as the primary launch for possible commercialization in its current form, because we are going to be using it in combination for eight straight weeks with the current standard of care, radiation, intermittent cisplatin. We have really good preclinical evidence of synergy with cisplatin and there's clinical evidence of HDAC synergizing with radiation. So we are very eagerly awaiting this data.

We will be taking biopsies of patients to make sure we are doing at least retrospective patient stratification if we can then show patients that are responding more favorably, there is a molecular rationale to it.

We look at launching indications off of the head and neck that have the same squamous cell carcinoma phenotype such as esophageal cancer where we could use the same formulation, same dosing schedule. But we are also looking at a strategy of a number of cancer types where we could use the IV for an effective debulking and regression of cancer in combination.

So liver, for instance, we are talking to liver cancer specialists going through the data and looking at the prospects of a Phase II, possibly in Asia with the IV formulation. But in the US, a Phase I/Phase II using it in combination with radiation therapy. The oral coming in behind it gives us the prospect of other indications that we can expand into and in combinations, but also we may be able to use the IV for a rapid debulking, then the oral for maintenance. So we are looking at a multi-pronged strategy based on a combination of data and insights we are gaining from the clinical surveys we are doing.

I also just want to underscore the approach we take. We are also continuing, iteratively, to conduct preclinical studies to buttress our understanding based on what we are seeing clinically. So on the observation with liver cancer, we have now gone back and we are doing hepatocellular carcinoma models to delineate at a molecular level what the drug is doing so that we can learn how best to position it clinically.

So I apologize for the long answer, but it's a multi-pronged strategy that we are using. We are confident that we will have market application and competitive positioning for that IV form. And then if we are successful with the oral, broadening out the indication access and positioning.

Great. Thank you and good luck.

Okay, thanks.

Roddy Davidson.

Thank you. I've just been looking at the NCI-based studies of vismodegib. And I'm just wondering -- I know, you said you don't have much visibility on those, but you get the sense that the metastatic pancreatic cancer and stomach cancers, are they going to be of sufficient size to generate a significant result? And do you think they would support a move into Phase III and those indications by Roche?

Unfortunately, I don't have enough insight to be able to answer the question because I don't know what the data is going to look like. I think it's really going to be predicated on the quality of the data, how robust the single looks like. So the statistical robustness and size of the trial is based on what the data suggest. If you have a small percentage with a small number, the answer is no. If you have a high percentage with very robust data, it's possible that a smaller cohort is -- justifies going forward. And it depends on whether they are taking biopsies and have a very clear concise explanation of how the drug is working at a molecular level. So there are a number of attributes to the trial that I don't have enough clarity on to answer the question unfortunately.

Would I be right in thinking those are the two that are most likely to report, report the soonest?

Yes.

Thanks.

There are no further questions in queue.

Okay. Thank you very much. Again greatly appreciate your support and attention and as always we look forward to providing you with further updates and data as they become available. Thank you very much.

Thank you, ladies and gentlemen, that concludes your conference call for today. You may now disconnect and thank you for joining and have a very good day.