10-Q: Curis Faces Going Concern Doubt, Sells Erivedge Royalties

Curis, Inc. reported a net loss of $26.9 million for the nine months ended September 30, 2025, and disclosed substantial doubt about its ability to continue as a going concern, leading to the sale of its Erivedge royalty interest post-period end.

Summary

• Curis, Inc. reported a net loss of $26.9 million for the nine months ended September 30, 2025, a 20% improvement from the $33.8 million loss in the same period of 2024.
• Revenues, net, increased by 10% to $8.3 million for the nine months ended September 30, 2025, compared to $7.6 million in the prior year.
• Research and development expenses decreased by 24% to $22.4 million, and general and administrative expenses decreased by 17% to $11.2 million for the nine months ended September 30, 2025.
• The company's cash and cash equivalents stood at $9.1 million as of September 30, 2025, down from $20.0 million at December 31, 2024.
• Management has concluded there is substantial doubt about the company's ability to continue as a going concern within one year from the filing date, as existing cash is only expected to fund operations into Q1 2026.
• Post-period, on November 6, 2025, Curis sold its interest in Curis Royalty LLC, including Erivedge intellectual property and the Genentech collaboration, for $2.5 million upfront and a release of its $28.6 million liability related to the sale of future royalties.
• The company is not in compliance with Nasdaq's Minimum Market Value of Listed Securities Requirement and has been granted an exemption until November 14, 2025, to regain compliance.
• Emavusertib, the company's lead drug candidate, is in Phase 1/2 studies for PCNSL (TakeAim Lymphoma), AML/hrMDS (TakeAim Leukemia), and a Phase 1 AML Triplet study, with a new frontline CLL study expected to initiate dosing late 2025/early 2026.

Sentiment

Score: 2

Explanation: The company faces severe financial distress, evidenced by the going concern warning, critical liquidity position, and Nasdaq non-compliance. While clinical programs show some progress and the royalty sale reduces a liability, these are overshadowed by the immediate and substantial need for capital and the elimination of a revenue stream. The overall outlook is highly negative due to fundamental financial instability.

Positives

• Net loss decreased by 20% to $26.9 million for the nine months ended September 30, 2025, compared to $33.8 million in the prior year period.
• Revenues, net, increased by 10% to $8.3 million for the nine months ended September 30, 2025.
• Research and development expenses decreased by 24% and general and administrative expenses decreased by 17% for the nine months ended September 30, 2025, indicating reduced operational burn.
• Emavusertib received Orphan Drug Designation from the European Commission (July 2024) and the FDA (December 2024) for the treatment of PCNSL.
• Productive meetings were held with the European CHMP and the FDA regarding a potential accelerated regulatory path for emavusertib in PCNSL (March 2025).
• The subsequent sale of Curis Royalty LLC on November 6, 2025, for $2.5 million and the release of a $28.6 million liability related to future royalties, improves the balance sheet by extinguishing a significant obligation.

Negatives

• The company has an accumulated deficit of $1.3 billion as of September 30, 2025, and expects to continue generating operating losses.
• Existing cash and cash equivalents of $9.1 million as of September 30, 2025, are only expected to fund operations into the first quarter of 2026, raising substantial doubt about the company's ability to continue as a going concern.
• The company is not in compliance with Nasdaq's Minimum Market Value of Listed Securities Requirement and faces potential delisting if compliance is not regained by November 14, 2025.
• The sale of Curis Royalty LLC means the company will no longer be entitled to Erivedge revenues under the collaboration agreement with Genentech, eliminating a current revenue stream.
• The company will require substantial additional capital in the immediate term and expects to face substantial difficulty in raising it.
• Other income (expense) decreased significantly by 190% for the nine months ended September 30, 2025, primarily due to an increase in expense related to the sale of future royalties.

Risks

• Substantial doubt exists about the company's ability to continue as a going concern.
• The company has incurred substantial losses and expects to continue to incur substantial losses for the foreseeable future, potentially never achieving profitability.
• Substantial additional capital is required immediately; inability to raise capital could force delays, reductions, or elimination of drug development programs or commercialization efforts.
• Heavy dependence on the success of emavusertib, which is still in early clinical development and may not be successful.
• The company has never obtained marketing approval for a drug candidate and may be unable or delayed in obtaining approval for emavusertib or future candidates.
• Inability to establish additional strategic collaborations could adversely affect the ability to develop and commercialize emavusertib.
• Reliance on third parties to conduct clinical trials; inadequate performance or failure to meet deadlines by these third parties could harm development.
• The marketing approval process is expensive, time-consuming, and uncertain.
• Substantial competition from other companies developing drugs.
• Inability to obtain and maintain patent protection for technologies and drugs, or insufficient protection to stop competitors.
• Allegation of an event of default under the Oberland Purchase Agreement could have a material adverse effect (though mitigated by subsequent sale).
• Inability to attract and retain key management and scientific personnel and advisors.
• Non-compliance with Nasdaq Capital Market listing requirements, with a risk of delisting, decreased liquidity, and difficulty raising capital.
• Changes in U.S. trade policy and international trade policies, particularly with respect to China, could impact contract manufacturing organizations (CMOs) and supply chains, leading to disruptions and increased costs.
• Disruptions at the FDA and other government agencies (e.g., funding cuts, personnel losses, government shutdowns, regulatory reform) could hinder timely guidance, review, and approval of product candidates.

Future Outlook

The company expects to continue generating operating losses for the foreseeable future and will require substantial additional funding in the immediate term to finance its operations and advance emavusertib through regulatory approval and commercialization. Existing cash is only projected to fund operations into the first quarter of 2026. The company plans to seek additional funding through equity financings, collaborations, or other strategic transactions, but anticipates substantial difficulty in raising capital. The future success is highly dependent on the successful execution of emavusertib clinical trials and the ability to secure additional financing.

Management Comments

• "We have identified conditions and events that raise substantial doubt about our ability to continue as a going concern."
• "We will require substantial additional capital, and if we are unable to raise capital when needed, we could be forced to delay, reduce or eliminate our drug development program or commercialization efforts, and our ability to continue operations could be adversely affected."
• "Our current cash and cash equivalents are not expected to fund our operations beyond 12 months from the date of filing this Quarterly Report on Form 10-Q."
• "We have faced and expect to continue to face substantial difficulty in raising capital."
• "If necessary funds are not available, the Company will have to delay, reduce the scope of, or eliminate its development of emavusertib, potentially delaying the time to market for or preventing the marketing of emavusertib."
• "If the Company is unable to obtain sufficient capital, the Company would be unable to fund its operations and may be required to evaluate alternatives, which could include dissolving and liquidating its assets or seeking protection under the bankruptcy laws."
• "We expect additional data from [TakeAim Lymphoma] study in the fourth quarter of 2025."
• "We expect to begin activating sites later this year and will initiate dosing later this year or early next year, with data expected in the fourth quarter of 2026 [for the CLL study]."
• "We presented initial data from [the AML Triplet] study in the fourth quarter of 2025."

Industry Context

The biotechnology industry is characterized by high research and development costs, long development timelines, and significant regulatory hurdles. Curis's focus on oncology, particularly with emavusertib for hematologic malignancies, places it in a competitive but high-potential market. The challenges faced by Curis, such as the need for substantial capital and the inherent uncertainties of clinical trials, are common in this sector. The mentioned risks related to U.S. trade policy and FDA disruptions highlight broader macroeconomic and regulatory pressures impacting the entire pharmaceutical and biotech industry, particularly those with global supply chains or reliance on federal agency oversight.

Comparison to Industry Standards

• NA

Corporate Governance

Stakeholder Impact

• **Shareholders**: Face significant risk of dilution from future capital raises, potential delisting from Nasdaq, and the ultimate risk of loss of investment if the company cannot continue as a going concern or is forced into bankruptcy.
• **Employees**: Potential impact on job security and stock-based compensation value due to financial instability and potential operational reductions.
• **Customers (future drug recipients)**: Potential delays or cessation of emavusertib development, impacting access to potential treatments.
• **Creditors**: Uncertainty regarding the company's ability to meet its obligations, particularly given the going concern warning.
• **Collaboration Partners (Aurigene)**: The company's financial instability could impact its ability to meet development obligations and milestone payments under collaboration agreements.

Next Steps

• Obtain additional funding through private or public equity financings, collaborations, or other strategic transactions.
• Regain and maintain compliance with Nasdaq's Minimum Market Value of Listed Securities Requirement by November 14, 2025.
• Generate additional data from the TakeAim Lymphoma Phase 1/2 study in the fourth quarter of 2025.
• Activate sites for the new clinical study of emavusertib in frontline CLL later in 2025.
• Initiate dosing for the new clinical study of emavusertib in frontline CLL later in 2025 or early 2026, with data expected in Q4 2026.
• Continue to evaluate different dosing regimens of emavusertib, venetoclax, and azacitidine in the AML Triplet study.
• Evaluate alternatives, including dissolving and liquidating assets or seeking bankruptcy protection, if sufficient capital cannot be obtained.

Key Dates

Recommendation

The company's disclosure of substantial doubt about its ability to continue as a going concern, coupled with a critical cash position expected to last only into Q1 2026, signals severe financial distress. The Nasdaq delisting threat further exacerbates capital raising difficulties. While the sale of Erivedge royalties reduces a liability, it also eliminates a revenue stream, highlighting the urgent need for cash. Despite some clinical progress, the fundamental financial instability and high risk of bankruptcy make this a strong sell for investors.

Keywords

biotechnology, oncology, emavusertib, IRAK4 inhibitor, FLT3 inhibitor, clinical trials, AML, MDS, PCNSL, CLL, Orphan Drug Designation, SEC filing, 10-Q, going concern, Nasdaq delisting, capital raise, Erivedge, royalties, drug development