By Brady Huggett
Curis Inc., still fresh from its July formation, raised $46.8 million in a private placement that it said gives freedom of choice for business decisions.
"It went very quickly," said Doros Platika, president and CEO of Curis. "Initially we were going to place 4 million [shares], but due to demand we increased it to 5.2 million."
Curis, of Cambridge, Mass., sold the newly offered shares at $9 apiece. Prudential Vector Healthcare Group acted as the placement agent.
Curis has 31.3 million shares outstanding following the offering and Platika said it has $87 million in cash, giving it capital for the years ahead.
"We actually priced on Monday," Platika said. "But it took us a little time to get the paperwork done. It is a critical and strategic weapon for us to have at least two years cash on hand, which we do now." Curis' burn rate will go up into the $40 million range per year, he said.
It will use the funds for ongoing research and development, capital expenditures, sales and marketing capability, potential acquisitions, working capital and general corporate purposes.
"This funding gives us strategic consideration to decide which products in our pipeline to partner out and which ones to keep and market ourselves," Platika said. "It allows us to make decisions based on strategic needs and not on capital needs."
Curis is developing products for the area known as regenerative medicine. Its products are designed to recreate the conditions that support the growth of cells and tissue, using the body's inherent ability to repair damage caused by disease, trauma or age.
It was formed by the merger of three Massachusetts biotech companies - Creative BioMolecules Inc., Ontogeny Inc. and Reprogenesis Inc. - in July. Its lead product, OP-1, is partnered with Stryker Corp., of Kalamazoo, Mich., and was brought into the merger by Creative BioMolecules. It is being reviewed for regulatory approval in the United States, Europe and Australia for nonhealing fractures. (See BioWorld Today, Feb. 16, 2000.)
It also has Chondrogel in Phase III trials for vesicoureteral reflux, and a product called Neo Bladder that should begin Phase I/II trials in 2001. Also, it has Vascugel for the inhibition of coronary restenosis, a small-molecule product for basal cell carcinoma, and other products in research.
For a young company, Platika said Curis is progressing nicely.
"We've done extremely well integrating the three companies," he said. "We've built the premier regeneration company with a full pipeline of products. OP-1 is a near-term product that provides the investor with a secure base. We have already filed an [investigational new drug application] for Vascugel, and we are filing another IND next year."
Curis had estimated that OP-1 would be bringing in money for the company by 2001. Platika said that still is a possibility.
"We are hoping to get revenue from OP-1 by 2001, but Stryker controls that," Platika said.
The company has about 150 employees, Platika said, but it is hiring. Being so young, Curis and Platika have a lot of plans.
"The next step is to get the story out and make sure the company is covered by key analysts and make sure investors understand what the company is about," Platika said. "The story that we have the ability to take products from discovery all the way through market needs to get out.
"My goal, in the next three to five years, is to have between 300 and 500 individuals in the company," he said, "and to get two to three products into partnerships. Our goal for the next three to five years is to file at least one IND each year. And I don't mean a new indication, but a new product. We realize this is very ambitious, and we can't be sure we can do it, but the number of products we have in out pipeline gives us a decent shot at that goal."
Curis' stock (NASDAQ:CRIS) dropped 75 cents to close at $12.25 Thursday.