Curis, Inc. (CRIS) announced that it has entered into an exclusive collaboration agreement with Aurigene Discovery Technologies Limited, an independent, wholly owned subsidiary of Dr. Reddy's Laboratories Ltd. (RDY). The agreement focuses on immuno-oncology and selected precision oncology targets. Curis’ shares were up 2.1% following the announcement.
For the initial two years, the deal will exclusively focus on immuno-oncology. Thereafter, Curis can opt to extend the broad immuno-oncology exclusivity.
Terms of the Deal
Under this multiple program collaboration, Curis can opt to exclusively license compounds once a development candidate is nominated within each respective program. As per the agreement terms, Aurigene will conduct all discovery and preclinical activities, including investigational new drug (IND)-enabling studies and provide phase I clinical trial supply.
On the other hand, Curis will handle all clinical development, regulatory and commercialization efforts across the world, excluding India and Russia, for each program for which it exercises an option to obtain a license.
Under the collaboration, the first two programs will consist of an orally available small molecule antagonist of programmed death ligand-1 (PD-L1) in immuno-oncology and an orally available small molecule inhibitor of Interleukin-1 receptor-associated kinase 4 (IRAK4) in precision oncology. Curis intends to license both programs and file INDs for development candidates from each program this year.
As for the financial terms, Curis has issued about 17.1 million shares (19.9% of its outstanding shares prior to the transaction) of its common stock to Aurigene. The shares issued are subject to a lock-up agreement until Jan 18, 2017, with a portion of the shares to be released from the lock-up in four equal semi-annual installments between now and that date.
In addition to this, Curis will pay Aurigene up to $52.5 million for each of the first two programs, including $42.5 million per program on the achievement of certain approval and commercial milestones, and specific approval milestone payments for any additional indication.
For the third and fourth programs, it will pay up to $50 million per program, including $42.5 million per program subject to certain conditions and for programs thereafter Curis will pay Aurigene up to $140.5 million per program, including $87.5 million per program on the achievement of approval and commercial milestones. Aurigene will also be entitled to receive high-single-digit to 10% royalties on commercial sales of the products.
We are positive on the deal. Curis is also in collaboration with Roche (RHHBY) for Erivedge (first and only FDA-approved medicine for the treatment of advanced basal cell carcinoma).
Curis currently carries a Zacks Rank #3 (Hold). A better-ranked stock in the biotech sector is Amgen Inc. (AMGN) carrying a Zacks Rank #1 (Strong Buy).
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