10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549 

FORM 10-Q 

(Mark one)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2023

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                      to                     .

Commission File Number: 000-30347

CURIS, INC.

(Exact Name of Registrant as Specified in Its Charter)

Delaware	04-3505116
(State or Other Jurisdiction of Incorporation or Organization)	(I.R.S. Employer Identification No.)
128 Spring Street, Building C - Suite 500, Lexington, Massachusetts 02421
(Address of Principal Executive Offices) (Zip Code)

Registrant’s Telephone Number, Including Area Code: (617) 503-6500

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol	Name of each exchange on which registered
Common Stock, Par Value $0.01 per share	CRIS	Nasdaq Capital Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    ☒  Yes    ☐  No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    ☒  Yes    ☐  No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.:

Large accelerated filer ☐	Accelerated filer  ☐	Non-accelerated filer  ☒	Smaller reporting company    ☒
			Emerging growth company   ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    ☐  Yes    ☒  No

As of July 27, 2023, there were 117,704,554 shares of the registrant’s common stock, par value $0.01 per share, outstanding.

CURIS, INC. AND SUBSIDIARIES QUARTERLY REPORT ON FORM 10-Q

Table of Contents

		Page Number
PART I.	FINANCIAL INFORMATION
Item 1.	Unaudited Financial Statements	7
	Condensed Consolidated Balance Sheets as of June 30, 2023 and December 31, 2022	7
	Condensed Consolidated Statements of Operations and Comprehensive Loss for the Three and Six Months Ended June 30, 2023 and 2022	8
	Condensed Consolidated Statements of Stockholders' Equity for the Three and Six Months Ended June 30, 2023 and 2022	9
	Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2023 and 2022	10
	Notes to Condensed Consolidated Financial Statements	11
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	20
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	29
Item 4.	Controls and Procedures	29
PART II.	OTHER INFORMATION
Item 1A.	Risk Factors	29
Item 6.	Exhibits	30
Signatures		31

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Cautionary Note Regarding Forward-Looking Statements and Industry Data

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995, which involve risks and uncertainties. All statements other than statements of historical fact contained in this report are statements that could be deemed forward-looking statements, including without limitation any statements with respect to the plans, strategies and objectives of management for future operations; statements concerning product research, development and commercialization plans, timelines and anticipated results; statements of expectation or belief; statements with respect to clinical trials and studies; statements with respect to royalties and milestones; statements with respect to the therapeutic potential of drug candidates; expectations of revenue, expenses, earnings or losses from operations, or other financial results; and statements of assumptions underlying any of the foregoing. Without limiting the foregoing, the words “anticipate(s)”, “believe(s)”, “focus(es)”, “could”, “estimate(s)”, “expect(s)”, “intend(s)”, “may”, “plan(s)”, “seek(s)”, “will”, “strategy”, “mission”, “potential”, “should”, “would” and other similar language, whether in the negative or affirmative, are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. Forward-looking statements may include, but are not limited to, statements about:

•the initiation, timing, progress and results of future preclinical studies and clinical trials, and our research and development programs, including our lead asset emavusertib;

•our estimates of the period in which we anticipate that existing cash and cash equivalents will enable us to fund our current and planned operations;

•our ability to obtain additional financing;

•our ability to establish and maintain collaborations;

•our plans to develop and commercialize our drug candidates;

•the timing or likelihood of regulatory filings and approvals;

•the implementation of our business model, strategic plans for our business, drug candidates and technology;

•our estimates regarding expenses, future revenue and capital requirements;

•developments and projections relating to our competitors and our industry;

•our commercialization, marketing and manufacturing capabilities and strategy;

•the rate and degree of market acceptance and clinical utility of our products;

•our competitive position;

•our intellectual property position; and

•our ability to implement a reverse stock split and maintain our current listing on Nasdaq.

Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict. Our actual results could differ materially from those anticipated in these forward-looking statements as a result of various factors. We therefore caution you against relying on any of these forward-looking statements. Important factors that could cause actual results to differ materially from those in these forward-looking statements include the factors discussed below under the heading “Risk Factor Summary” and the risk factors detailed further in Item 1A, “Risk Factors” of Part I of our Annual Report on Form 10-K for the year ended December 31, 2022, as supplemented by the risk factors discussed in Part II, Item 1A, “Risk Factors” in our Quarterly Report on Form 10-Q for the quarter ended March 31, 2023, and those included under Part II, Item 1A of this Quarterly Report on Form 10-Q.

This report includes statistical and other industry and market data that we obtained from industry publications and research, surveys, and studies conducted by third parties as well as our own estimates. All of the market data used in this report involve a number of assumptions and limitations, and you are cautioned not to give undue weight to such data. Industry publications and third-party research, surveys, and studies generally indicate that their information has been obtained from sources believed to be reliable, although they do not guarantee the accuracy or completeness of such information. Our estimates of the potential market opportunities for our drug candidates include several key assumptions based on our industry knowledge, industry publications, third-party research, and other surveys, which may be based on a small sample size and may fail to accurately reflect market opportunities. While we believe that our internal assumptions are reasonable, no independent source has verified such assumptions.

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The forward-looking statements included in this report represent our estimates as of the filing date of this report. We specifically disclaim any obligation to update these forward-looking statements in the future. These forward-looking statements should not be relied upon as representing our estimates or views as of any date subsequent to the date of this report.

4

Risk Factor Summary

Investment in our securities involves risk. You should carefully consider the following summary of what we believe to be the principal risks facing our business, in addition to the risks described more fully in Item 1A, “Risk Factors” of Part I of our Annual Report on Form 10-K for the year ended December 31, 2022, as supplemented by the risk factors discussed in Part II, Item 1A, “Risk Factors” in our Quarterly Report on Form 10-Q for the quarter ended March 31, 2023, and those included under Part II, Item 1A, “Risk Factors” of this Quarterly Report on Form 10-Q and other information included in this report. The risks and uncertainties described below are not the only risks and uncertainties we face. Additional risks and uncertainties not presently known to us or that we presently deem less significant may also impair our business operations.

If any of the following risks occurs, our business, financial condition, and results of operations and future growth prospects could be materially and adversely affected, and the actual outcomes of matters as to which forward-looking statements are made in this report could be materially different from those anticipated in such forward-looking statements.

•We have incurred substantial losses, expect to incur substantial losses for the foreseeable future and may never generate significant revenue or achieve or maintain profitability.

•We will require substantial additional funding, and if we are unable to raise capital when needed, we could be forced to delay, reduce or eliminate our drug development programs or commercialization efforts.

•We are dependent on the success of our most advanced drug candidate emavusertib, for which we are conducting the TakeAim Leukemia and TakeAim Lymphoma clinical trials. If we are unable to continue and complete the clinical development, obtain marketing approval and successfully commercialize emavusertib, either alone or with a collaborator, or if we experience significant delays in doing so, our business will be materially harmed.

•If clinical trials of any drug candidates that we, or any collaborators, may develop fail to satisfactorily demonstrate safety and efficacy to the U.S. Food and Drug Administration, or FDA, and other regulators, we, or any collaborators, may incur additional costs or experience delays in completing, or ultimately be unable to complete, the development and commercialization of these drug candidates.

•Adverse events or undesirable side effects caused by, or other unexpected properties of, drug candidates that we develop may be identified during development and could delay or prevent their marketing approval or limit their use.

•We rely in part on third parties to conduct clinical trials of our product candidates and for the research, development and commercialization of certain programs, and those third parties may not perform satisfactorily, including by failing to meet deadlines for the completion of such trials, research or testing.

•We face substantial competition, and our competitors may discover, develop or commercialize drugs before or more successfully than we do.

•If we are unable to obtain and maintain sufficient patent protection for our technologies and drugs, or our licensors are not able to obtain and maintain sufficient patent protection for the technologies or drugs that we license from them, or if the scope of the patent protection is not sufficiently broad, our competitors could develop and commercialize drugs similar or identical to ours, and our ability to successfully commercialize our drug candidates may be adversely affected.

•If we or our collaborators are not able to obtain, or if there are delays in obtaining, required regulatory approvals, we or they will not be able to commercialize, or will be delayed in commercializing, our drug candidates, and our ability to generate revenue will be materially impaired.

•In the event of a default by us or Curis Royalty under the Oberland Purchase Agreement, as defined below, we could, among other consequences, lose our retained rights to future royalty and royalty related payments on commercial sales of Erivedge, be required to repurchase the Purchased Receivables, as defined below, at a price that is a multiple of the payments we have received, and our ability to enter into future arrangements may be inhibited, all of which could have a material adverse effect on our business, financial condition and stock price. In March 2023, Curis and Curis Royalty received a letter from counsel to Oberland Capital Management, LLC, the Purchasers, as defined below, and the Agent, as defined below, alleging defaults under Sections 4.04 and 6.04(b) of the Oberland Purchase Agreement and demanding cure of the asserted default under Section 6.04(b) of the Oberland Purchase Agreement. The letter further alleges that these alleged defaults are events of default under the Oberland Purchase Agreement and that each alleged default separately entitles the Purchasers to exercise the put option, which would require Curis Royalty to repurchase the Purchased Receivables at a price, referred to as the Put/Call Price, equal to 250% of the sum of the upfront purchase price and any portion of the milestone payments paid in a lump sum by the Purchasers, if any, minus certain payments previously received by the Purchasers with respect to the Purchased Receivables. As of June 30, 2023, the

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estimated amount of the Put/Call Price is up to $68.0 million. Curis and Curis Royalty dispute these allegations. However, if Oberland elects to pursue these claims, and if Curis and Curis Royalty are unsuccessful in defending against these claims, it could have a material adverse impact on Curis and Curis Royalty, including their ability to continue as a going concern.

•If we are not able to attract and retain key management and scientific personnel and advisors, we may not successfully develop our drug candidates or achieve our other business objectives.

•If we are unable to implement a reverse stock split or fail to meet the requirements for continued listing on Nasdaq, our common stock could be delisted from trading, which would decrease the liquidity of our common stock and our ability to raise additional capital.

•If we cannot access a portion of our existing cash, cash equivalents and investments due to conditions affecting the banking system and financial markets, it could have a material adverse effect on our business and financial condition.

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PART I—FINANCIAL INFORMATION

Item 1.    UNAUDITED FINANCIAL STATEMENTS

CURIS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except share and per share data)

(Unaudited)

	June 30, 2023		December 31, 2022
ASSETS
Current assets:
Cash and cash equivalents	$	19,822	$	19,658
Short-term investments	43,665		65,965
Accounts receivable	2,386		2,975
Prepaid expenses and other current assets	1,978		3,521
Total current assets	67,851		92,119
Property and equipment, net	561		689
Restricted cash, long-term	635		635
Operating lease right-of-use asset	3,740		4,401
Other assets	2,539		2,022
Goodwill	8,982		8,982
Total assets	$	84,308	$	108,848
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	2,686	$	3,193
Accrued liabilities	5,776		5,679
Current portion of operating lease liability	1,220		1,141
Total current liabilities	9,682		10,013
Long-term operating lease liability	2,164		2,800
Liability related to the sale of future royalties, net	46,238		49,483
Total liabilities	58,084		62,296
Stockholders’ equity:
Preferred stock, $0.01 par value—5,000,000 shares authorized, no shares issued and outstanding at June 30, 2023 and December 31, 2022	—		—
Common stock, $0.01 par value—227,812,500 shares authorized; 99,344,798 shares issued and outstanding at June 30, 2023; 227,812,500 shares authorized; 96,607,586 shares issued and outstanding at December 31, 2022	993		966
Additional paid-in capital	1,197,746		1,194,769
Accumulated deficit	(1,172,517)		(1,148,997)
Accumulated other comprehensive income (loss)	2		(186)
Total stockholders’ equity	26,224		46,552
Total liabilities and stockholders’ equity	$	84,308	$	108,848

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.    

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CURIS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(In thousands, except share and per share data)

(Unaudited)

	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Revenues, net	$	2,197	$	2,393	$	4,494	$	4,450
Costs and expenses:
Cost of royalties	74		42		98		124
Research and development	10,012		12,323		19,152		23,758
General and administrative	4,249		5,089		9,009		10,762
Total operating expenses	14,335		17,454		28,259		34,644
Loss from operations	(12,138)		(15,061)		(23,765)		(30,194)
Other income (expense):
Interest income	815		162		1,467		242
Expense related to the sale of future royalties	(638)		(1,041)		(1,222)		(2,097)
Total other income (expense)	177		(879)		245		(1,855)
Net loss	$	(11,961)	$	(15,940)	$	(23,520)	$	(32,049)
Net loss per common share (basic and diluted)	$	(0.12)	$	(0.17)	$	(0.24)	$	(0.35)
Weighted average common shares (basic and diluted)	96,685,924		91,650,950		96,649,934		91,648,175
Net loss	$	(11,961)	$	(15,940)	$	(23,520)	$	(32,049)
Other comprehensive income (loss):
Unrealized gain (loss) on marketable securities	(7)		(104)		188		(446)
Comprehensive loss	$	(11,968)	$	(16,044)	$	(23,332)	$	(32,495)

    

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.

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CURIS, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Stockholders’ Equity

(In thousands, except share data)

(Unaudited)

	Common Stock			Additional Paid-in Capital		Accumulated Deficit		Accumulated Other Comprehensive (Loss) Income		Total Stockholders’ Equity
	Shares	Amount
December 31, 2022	96,607,586	$	966	$	1,194,769	$	(1,148,997)	$	(186)	$	46,552
Stock-based compensation	—	—		1,395		—		—		1,395
Issuance of common stock under employee benefit plans	10,312	—		7		—		—		7
Unrealized gain on marketable securities	—	—		—		—		195		195
Net loss	—	—		—		(11,559)		—		(11,559)
March 31, 2023	96,617,898	$	966	$	1,196,171	$	(1,160,556)	$	9	$	36,590
Stock-based compensation	—	—		1,424		—		—		1,424
Issuance of common stock under employee benefit plans, including restricted stock awards	2,726,900	27		151		—		—		178
Unrealized loss on marketable securities	—	—		—		—		(7)		(7)
Net loss	—	—		—		(11,961)		—		(11,961)
June 30, 2023	99,344,798	$	993	$	1,197,746	$	(1,172,517)	$	2	$	26,224

	Common Stock			Additional Paid-in Capital		Accumulated Deficit		Accumulated Other Comprehensive (Loss) Income		Total Stockholders’ Equity
	Shares	Amount
December 31, 2021	91,645,369	$	916	$	1,182,225	$	(1,092,325)	$	(109)	$	90,707
Stock-based compensation	—	—		1,718		—		—		1,718
Unrealized loss on marketable securities	—	—		—		—		(342)		(342)
Net loss	—	—		—		(16,109)		—		(16,109)
March 31, 2022	91,645,369	$	916	$	1,183,943	$	(1,108,434)	$	(451)	$	75,974
Stock-based compensation	—	—		1,966		—				1,966
Issuance of common stock under employee benefit plans	169,296	2		147		—		—		149
Unrealized gain (loss) on marketable securities	—	—		—		—		(104)		(104)
Net loss	—	—		—		(15,940)		—		(15,940)
June 30, 2022	91,814,665	$	918	$	1,186,056	$	(1,124,374)	$	(555)	$	62,045

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.

9

CURIS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

	Six Months Ended June 30,
	2023		2022
Cash flows from operating activities:
Net loss	$	(23,520)	$	(32,049)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	128		80
Non-cash lease expense	662		529
Stock-based compensation expense	2,819		3,684
Non-cash expense related to the sale of future royalties	(202)		6
Net amortization of premiums and discounts on marketable securities	(602)		575
Changes in operating assets and liabilities:
Accounts receivable	589		829
Prepaid expenses and other assets	1,026		(536)
Accounts payable and accrued liabilities	(410)		(1,671)
Operating lease liability	(557)		(394)
Total adjustments	3,453		3,102
Net cash used in operating activities	(20,067)		(28,947)
Cash flows from investing activities:
Purchase of investments	(28,336)		(35,774)
Sales and maturities of investments	51,425		61,395
Purchases of property and equipment	—		(364)
Net cash provided by investing activities	23,089		25,257
Cash flows from financing activities:
Proceeds from issuance of common stock under employee benefit plans	185		149
Payment of liability of future royalties, net of imputed interest	(3,043)		(2,556)
Net cash used in financing activities	(2,858)		(2,407)
Net increase (decrease) in cash and cash equivalents and restricted cash	164		(6,097)
Cash and cash equivalents and restricted cash, beginning of period	20,293		40,740
Cash and cash equivalents and restricted cash, end of period	$	20,457	$	34,643
Supplemental cash flow data:
Issuance costs in accrued expenses and accounts payable	$	171	$	—
Cash paid for interest	$	1,424	$	2,091
Decrease in right-of-use assets and operating lease liabilities resulting from lease modification	$	—	$	(191)

    

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.

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CURIS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(In thousands, except share and per share data)

1.     Nature of Business

Curis, Inc. is a biotechnology company seeking to develop and commercialize innovative drug candidates to treat cancer. Throughout these Condensed Consolidated Financial Statements, Curis, Inc. and its wholly owned subsidiaries are collectively referred to as “the Company,” “Curis,” “we,” “us,” or “our.”

The Company conducts its research and development programs both internally and through strategic collaborations. The Company has prioritized its lead clinical stage drug candidate emavusertib, an orally available small molecule inhibitor of Interleukin-1 receptor associated kinase 4 (“IRAK4”).

The Company is party to a collaboration with Genentech Inc. (“Genentech”), a member of the Roche Group, under which Genentech and F. Hoffmann-La Roche Ltd (“Roche”) are commercializing Erivedge® (vismodegib), a first-in-class orally administered small molecule Hedgehog signaling pathway antagonist. Erivedge is approved for the treatment of advanced basal cell carcinoma (“BCC”).

The Company is party to an exclusive collaboration agreement with Aurigene Discovery Technologies Limited (“Aurigene”) for the discovery, development and commercialization of small molecule compounds in the areas of immuno-oncology and precision oncology.

The Company is subject to risks common to companies in the biotechnology industry as well as risks that are specific to the Company’s business, including, but not limited to: the Company’s ability to obtain adequate financing to fund its operations; the Company’s ability to advance and expand its research and development programs; the Company’s ability to execute on its overall business strategies; the Company’s ability to obtain and maintain necessary intellectual property protection; development by the Company’s competitors of new or better technological innovations; the Company’s ability to comply with regulatory requirements; the Company’s ability to obtain and maintain applicable regulatory approvals and commercialize any approved product candidates; the ability of the Company and its wholly owned subsidiary, Curis Royalty, LLC (“Curis Royalty”), to satisfy the terms of the royalty interest purchase agreement (the “Oberland Purchase Agreement”) with entities managed by Oberland Capital Management, LLC (the “Purchasers”), and Lind SA LLC (the “Agent”), as collateral agent for the Purchasers; and the Company’s ability to implement a reverse stock split and maintain its current listing on Nasdaq.

The Company’s future operating results will largely depend on the progress of drug candidates currently in its development pipeline and the magnitude of payments that it may receive and make under its current and potential future collaborations. The results of the Company’s operations have varied and will likely continue to vary significantly from year to year and quarter to quarter and depend on a number of factors, including, but not limited to the timing, outcome and cost of the Company’s preclinical studies and clinical trials for its drug candidates.

The Company will require substantial funds to maintain research and development programs and support operations. The Company has incurred losses and negative cash flows from operations since its inception. As of June 30, 2023, the Company had an accumulated deficit of $1.2 billion, and for the six months ended June 30, 2023, the Company incurred a net loss of $23.5 million and used $20.1 million of cash in operations. The Company expects to continue to generate operating losses in the foreseeable future. The Company anticipates that its $63.5 million of existing cash, cash equivalents and investments at June 30, 2023, and the net proceeds of approximately $13.9 million from the July Registered Direct discussed below, should be sufficient to fund operations for at least 12 months from the date of filing this Quarterly Report on Form 10-Q.

The Company’s ability to raise additional funds will depend, among other factors, on financial, economic and market conditions, many of which are outside of its control and it may be unable to raise financing when needed, or on terms favorable to the Company. If necessary funds are not available, the Company will have to delay, reduce the scope of, or eliminate some of its development programs, potentially delaying the time to market for or preventing the marketing of any of its product candidates.

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2.     Summary of Significant Accounting Policies

(a)Basis of Presentation and Principles of Consolidation

The accompanying Condensed Consolidated Financial Statements have been prepared in accordance with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. These statements, however, are condensed and do not include all disclosures required by accounting principles generally accepted in the U.S. (“GAAP”) for complete financial statements and should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2022 as filed with the Securities and Exchange Commission (“SEC”) on March 13, 2023.

In the opinion of the management of the Company, the unaudited Condensed Consolidated Financial Statements contain all adjustments (all of which were considered normal and recurring) necessary for a fair statement of the Company’s financial position at June 30, 2023; the results of operations for the three and six-month period ended June 30, 2023 and 2022; stockholders' equity for the three and six-month period ended June 30, 2023 and 2022; and the cash flows for the six-month period ended June 30, 2023 and 2022. The Condensed Consolidated Balance Sheet at December 31, 2022 was derived from audited annual financial statements but does not contain all of the footnote disclosures from the annual financial statements.

(b)Use of Estimates and Assumptions

The preparation of the Company’s Condensed Consolidated Financial Statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts and disclosure of revenue, expenses and certain assets and liabilities at the balance sheet date. Such estimates include the performance obligations under the Company’s collaboration agreements; the collectability of receivables; the carrying value of goodwill; and the value of certain investments and liabilities. Actual results may differ from such estimates. These interim results are not necessarily indicative of results to be expected for a full year or subsequent interim periods.

(c) Cash Equivalents, Restricted Cash, and Investments

Cash equivalents consist of highly liquid investments purchased with original maturities of three months or less. All other investments are marketable securities.

The Company classified $0.6 million of its cash as restricted cash as of June 30, 2023 and December 31, 2022. These amounts represent the security deposit associated with the Company’s Lexington, Massachusetts headquarters.

The Company’s short-term investments are marketable debt securities with original maturities of greater than three months from the date of purchase, but less than twelve months from the balance sheet date. Marketable securities consist of commercial paper, corporate bonds and notes, and/or government obligations. All of the Company’s investments have been designated available-for-sale and are stated at fair value. Unrealized gains and losses on investments are included in accumulated other comprehensive income (loss) as a separate component of stockholders’ equity. Realized gains and losses, dividends and interest income are included in other income (expense) in the period during which the securities are sold. Any premium or discount arising at purchase is amortized and/or accreted to interest income.

(d)Leases

The Company determines if an arrangement is a lease at contract inception. The Company made an accounting policy election to not recognize leases with an initial term of 12 months or less within its Consolidated Balance Sheets and to recognize those lease payments on a straight-line basis in its Consolidated Statements of Operations and Comprehensive Loss over the lease term. Operating lease assets represent the Company’s right to use an underlying asset for the lease term and operating lease liabilities represent its obligation to make lease payments arising from the lease. Operating lease assets and liabilities are recognized at the commencement date of the lease based upon the present value of lease payments over the lease term. When determining the lease term, the Company includes options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option.

As the Company’s lease does not provide an implicit interest rate, the Company uses its incremental borrowing rate, which is based on rates that would be incurred to borrow on a collateralized basis over a term equal to the lease payments in a similar economic environment, in determining the present value of lease payments.

The lease payment used to determine the operating lease asset may include lease incentives, stated rent increases and was recognized as an operating lease right-of-use asset in the Condensed Consolidated Balance Sheets. The Company’s lease agreements may include both lease and non-lease components, which may be accounted for as a single lease component. Variable payments included in the lease agreement are expensed as incurred.

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The Company’s operating lease is reflected in operating lease right-of-use asset and operating lease liability in the Condensed Consolidated Balance Sheets. Lease expense for lease payments is recognized on a straight-line basis over the lease term.

(e)Other Assets

Other assets consist of long-term prepayments and deposits.

(f)Revenue Recognition

The Company applies the revenue recognition guidance in accordance with Financial Accounting Standards Board (“FASB”) Codification Topic 606, Revenue from Contracts with Customers. Revenue is recognized when persuasive evidence of an arrangement exists, delivery has occurred and title has passed, the price is fixed or determinable, and collectability is reasonably assured.

The Company recognizes royalty revenues related to Genentech’s and Roche’s sales of Erivedge. For arrangements that include sales-based royalties, including milestone payments based on the level of sales, and where the license is deemed to be the predominant item to which the royalties relate, the Company recognizes revenue at the later of (i) when the related sales occur, or (ii) when the performance obligation to which some or all of the royalty has been allocated has been satisfied (or partially satisfied). The Company expects to continue recognizing royalty revenue from Genentech’s sales of Erivedge in the U.S. and in other markets where Genentech and Roche successfully obtain marketing approval, if any (see Note 8, Research and Development Collaborations). However, a substantial portion of potential Erivedge royalties will be paid to the Purchasers pursuant to the Oberland Purchase Agreement (see Note 7, Liability Related to the Sale of Future Royalties).

(g)Segment Reporting

The Company has determined that it operates in a single reportable segment, which is the research and development of innovative drug candidates for the treatment of human cancer.

(h)New Accounting Pronouncements

The Company assesses the applicability and impact of any recent Accounting Standards Updates (“ASUs”) issued by the FASB. Based on this assessment, recently issued ASUs were either not applicable or expected to have an immaterial impact on the Company’s Condensed Consolidated Financial Statements.

3.     Fair Value of Financial Instruments

The Company applies the provisions of Accounting Standards Codification 820, Fair Value Measurements (“ASC 820”), for its financial assets and liabilities that are re-measured and reported at fair value each reporting period and the non-financial assets and liabilities that are re-measured and reported at fair value on a non-recurring basis. Fair value is the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining fair value, the Company considers the principal or most advantageous market in which it would transact and considers assumptions that market participants would use when pricing the asset or liability. ASC 820 establishes a three-level valuation hierarchy for disclosure of fair value measurements. Financial assets and liabilities are categorized within the valuation hierarchy based upon the lowest level of input that is significant to the measurement of fair value. The three levels of the hierarchy are defined as follows:

Level 1	Quoted prices in active markets for identical assets or liabilities.
Level 2	Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.
Level 3	Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

In accordance with the fair value hierarchy, the following table shows the fair value as of June 30, 2023 and December 31, 2022 of those financial assets and liabilities that are measured at fair value on a recurring basis, according to the valuation techniques the Company used to determine their fair value.

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(in thousands)	Quoted Prices in Active Markets (Level 1)		Other Observable Inputs (Level 2)		Unobservable Inputs (Level 3)		Fair Value
As of June 30, 2023:
Cash equivalents:
Money market funds	$	16,910	$	—	$	—	$	16,910
Short-term investments:
Corporate debt securities and commercial paper	—		26,367		—		26,367
U.S. treasury securities and government agency obligations	—		17,298		—		17,298
Total	$	16,910	$	43,665	$	—	$	60,575

    

(in thousands)	Quoted Prices in Active Markets (Level 1)		Other Observable Inputs (Level 2)		Unobservable Inputs (Level 3)		Fair Value
As of December 31, 2022:
Cash equivalents:
Money market funds	$	15,215	$	—	$	—	$	15,215
U.S. treasury securities and government agency obligations	—		2,998		—		2,998
Short-term investments:
Corporate debt securities and commercial paper	—		42,071		—		42,071
U.S. treasury securities and government agency obligations	—		23,894		—		23,894
Total	$	15,215	$	68,963	$	—	$	84,178

4.     Investments

The amortized cost, including interest receivable, unrealized gains and losses and fair value of investments available-for-sale as of June 30, 2023 are as follows:

(in thousands)	Amortized Cost		Unrealized Gain		Unrealized Loss		Fair Value
Short-term investments:
Corporate debt securities and commercial paper	$	26,368	$	1	$	(2)	$	26,367
U.S. treasury securities and government agency obligations	17,295		4		(1)		17,298
Total investments	$	43,663	$	5	$	(3)	$	43,665

Short-term investments have maturities ranging from one to twelve months with a weighted-average maturity of 0.2 years at June 30, 2023.

The amortized cost, including interest receivable, unrealized gains and losses and fair value of investments available-for-sale as of December 31, 2022 are as follows:

(in thousands)	Amortized Cost		Unrealized Gain		Unrealized Loss		Fair Value
Short-term investments:
Corporate debt securities and commercial paper	$	42,109	$	2	$	(40)	$	42,071
U.S. treasury securities and government agency obligations	24,042		—		(148)		23,894
Total investments	$	66,151	$	2	$	(188)	$	65,965

The weighted average maturity of short-term investments was 0.3 years at December 31, 2022.

No credit losses on available-for-sale securities were recognized during the three and six months ended June 30, 2023 or 2022. In its evaluation to determine expected credit losses, management considered all available historical and current information, expectations of future economic conditions, the type of security, the credit rating of the security, and the size of the loss position, as well as other relevant information. The Company does not intend to sell, and is unlikely to be required to sell, any of these available-for-sale investments before their effective maturity or market price recovery.

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As of June 30, 2023, the Company held no investments that have been in a continuous unrealized loss position for 12 months or longer. The aggregate fair value of available-for-sale investments in a continuous unrealized loss position for 12 months or longer was $27.4 million as of December 31, 2022.

5.     Accrued Liabilities

Accrued liabilities consisted of the following:

(in thousands)	June 30, 2023		December 31, 2022
Headcount related costs	$	1,986	$	3,152
Research and development costs	2,808		1,727
Professional and legal fees	897		762
Other	85		38
Total	$	5,776	$	5,679

    

6.     Lease

The Company has a single lease for real estate, including laboratory and office space, and certain equipment, in Lexington, Massachusetts which commenced on May 1, 2020. A portion of the Company’s leased space is subject to an early termination option that becomes effective on the lease commencement date of a new lease for larger premises within the landlord’s commercial real estate portfolio (“New Lease”), and the Company may exercise its early termination option by providing the landlord with written notice of such election to terminate the lease agreement concurrently with the execution of the New Lease. The Company expects the lease to end as of or on December 31, 2025.

As of June 30, 2023, the Company had an operating lease liability of $3.4 million and related right-of-use asset of $3.7 million related to its operating lease. As of December 31, 2022, the Company had an operating lease liability of $3.9 million and related right-of-use asset of $4.4 million related to its operating lease.

The Company recorded lease cost of $0.4 million for the three months ended June 30, 2023 and 2022. The Company recorded lease cost of $0.7 million for the six months ended June 30, 2023 and 2022.

The total cash obligation over the approximately six-year term of this lease is $8.8 million. The Company paid $0.4 million and $0.7 million during the three and six months ended June 30, 2023, respectively. The Company paid $0.3 million and $0.6 million during the three and six months ended June 30, 2022, respectively. The discount rate associated with the Company’s right-of-use asset is 10%.

7.     Liability Related to the Sale of Future Royalties

In March 2019, the Company and Curis Royalty entered into the royalty interest purchase agreement (“Oberland Purchase Agreement”) with TPC Investments I LP and TPC Investments II LP (“the Purchasers”), each of which is a Delaware limited partnership managed by Oberland Capital Management, LLC, and Lind SA LLC (the “Agent”), a Delaware limited liability company managed by Oberland Capital Management, LLC, as collateral agent for the Purchasers. The Company sold to the Purchasers a portion of its rights to receive royalties from Genentech on potential net sales of Erivedge.

As upfront consideration for the purchase of the royalty rights, at closing the Purchasers paid to Curis Royalty $65.0 million less certain transaction expenses. Curis Royalty will also be entitled to receive up to $53.5 million in milestone payments based on sales of Erivedge if the Purchasers receive payments pursuant to the Oberland Purchase Agreement in excess of $117.0 million on or prior to December 31, 2026.

The Oberland Purchase Agreement provides that after the occurrence of an event of default as defined under the security agreement by Curis Royalty, the Purchasers shall have the option, for a period of 180 days, to require Curis Royalty to repurchase a portion of certain royalty and royalty related payments, excluding a portion of non U.S. royalties retained by Curis Royalty (referred to as the “Purchased Receivables”), at a price (referred to as the “Put/Call Price”), equal to 250% of the sum of the upfront purchase price and any portion of the milestone payments paid in a lump sum by the Purchasers, if any, minus certain payments previously received by the Purchasers with respect to the Purchased Receivables. The Company concluded the put option is an embedded derivative that requires bifurcation from the deferred royalty obligation and evaluates the fair value of the put option each reporting period. The estimated fair value of the put option is immaterial as of June 30, 2023 and December 31, 2022, respectively. Additionally, Curis Royalty shall have the option at any time to repurchase the Purchased Receivables at the Put/Call Price as of the date of such repurchase. No events of default occurred as of June 30, 2023.

As a result of the obligation to pay future royalties to the Purchasers, the Company recorded the proceeds as a liability on

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its Condensed Consolidated Balance Sheets. It accounts for the liability and interest expense using the interest method over the expected life of the Oberland Purchase Agreement. As a result, the Company imputes interest on the transaction and records imputed interest expense at the estimated interest rate, which the Company has included within Expense related to the sale of future royalties in the accompanying statement of operations and comprehensive loss. The Company’s estimate of the interest rate under the Oberland Purchase Agreement is based on the amount of royalty payments expected to be received by the Purchasers over the life of the Oberland Purchase Agreement. The projected amount of royalty payments expected to be paid to the Purchasers involves the use of significant estimates and assumptions with respect to the revenue growth rate in the Company’s projections of sales of Erivedge. The Company periodically assesses the expected royalty payments to Curis Royalty from Genentech using a combination of historical results and forecasts from market data sources. To the extent such payments are greater or less than its initial estimates or the timing of such payments is materially different than its original estimates, the Company will prospectively adjust the amortization of the liability.

The Company determined the fair value of the liability related to the sale of future royalties at the time of the Oberland Purchase Agreement to be $65.0 million, with a current effective annual imputed interest rate of 6.1%. The Company incurred $0.6 million of transaction costs in connection with the Oberland Purchase Agreement. These transaction costs will be amortized to imputed interest expense over the estimated term of the Oberland Purchase Agreement. The carrying value of the liability related to the sale of future royalties approximates fair value as of June 30, 2023 and is based on the Company's current estimates of future royalties expected to be paid the Purchasers over the life of the arrangement, which are considered Level 3 inputs.

The following table shows the activity with respect to the liability related to the sale of future royalties during the six months ended June 30, 2023.

(in thousands)
Carrying value of liability related to the sale of future royalties at January 1, 2023	$	49,483
Other	(49)
Imputed interest expense	1,271
Less: payments to the Purchasers	(4,467)
Carrying value of liability related to the sale of future royalties at June 30, 2023	$	46,238

In March 2023, Curis and Curis Royalty received a letter from counsel to Oberland Capital Management, LLC, the Purchasers and the Agent alleging defaults under Sections 4.04 and 6.04(b) of the Oberland Purchase Agreement and demanding cure of the asserted default under Section 6.04(b) of the Oberland Purchase Agreement. The asserted basis for the alleged defaults is that Curis and Curis Royalty were required to disclose, and failed to disclose, certain information prior to execution of the Oberland Purchase Agreement and that Curis and Curis Royalty have since failed to disclose certain information that has been requested by the Purchasers pursuant to Section 6.04(b) of the Oberland Purchase Agreement. The letter further alleges that these alleged defaults are events of default under the Oberland Purchase Agreement and that each alleged default separately entitles the Purchasers to exercise the put option described above, which would require Curis Royalty to repurchase the Purchased Receivables at the Put/Call Price. The Purchasers have not attempted to exercise that put option but have purported to reserve their alleged right to exercise it without further notice. As of June 30, 2023, the estimated amount of the Put/Call Price is up to $68.0 million. The Purchasers have also reserved other asserted rights in respect of the alleged defaults, including the asserted right to seek judicial remedies, including for damages and rescission, and to assert alleged claims against Curis and Curis Royalty for indemnification on the basis of material breach and fraud in the inducement. Curis and Curis Royalty dispute these allegations.

However, if Oberland elects to pursue these claims, and if Curis and Curis Royalty are unsuccessful in defending against these claims, it could have a material adverse impact on Curis and Curis Royalty, including their ability to continue as a going concern.

8.     Research and Development Collaborations

(a)Genentech

In June 2003, the Company licensed its proprietary Hedgehog pathway antagonist technologies to Genentech for human therapeutic use. The primary focus of the collaborative research plan has been to develop molecules that inhibit the Hedgehog pathway for the treatment of various cancers. The collaboration is currently focused on the development of Erivedge, which is being commercialized by Genentech in the U.S. and by Genentech’s parent company, Roche, outside of the U.S. for the treatment of advanced BCC. The Company has received $59.0 million in cash milestone payments as of June 30, 2023.

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In addition to these payments and pursuant to the collaboration agreement, the Company is entitled to a royalty on net sales of Erivedge that ranges from 5% to 7.5%. The royalty rate applicable to Erivedge may be decreased by 2% on a country-by-country basis in certain specified circumstances.

The Company recognized $2.3 million and $2.5 million in royalty revenue under the Genentech collaboration during the three months ended June 30, 2023 and 2022, respectively. The Company recognized $4.5 million in royalty revenue under the Genentech collaboration during both six months ended June 30, 2023 and 2022.

Cost of royalties comprises payments to university licensors and was immaterial for the three and six months ended June 30, 2023 and 2022.

The Company has accounts receivables from Genentech under this collaboration of $2.4 million and $3.0 million as of June 30, 2023 and December 31, 2022, respectively, in its Condensed Consolidated Balance Sheets.

As previously discussed in Note 7, Liability Related to the Sale of Future Royalties, a significant portion of royalty revenues received from Genentech on net sales of Erivedge will be paid to the Purchasers pursuant to the Oberland Purchase Agreement.

(b)Aurigene

The Company is party to an exclusive collaboration agreement with Aurigene for the discovery, development and commercialization of small molecule compounds in the areas of immuno-oncology and selected precision oncology targets. Under the collaboration agreement, Aurigene granted the Company an option to obtain exclusive, royalty-bearing licenses to relevant Aurigene technology to develop, manufacture and commercialize products containing certain of such compounds anywhere in the world, except for India and Russia, which are territories retained by Aurigene. Additionally, Aurigene retains the rights to develop and commercialize CA-170 in Asia, and the Company is entitled to receive royalty payments on potential future sales of CA-170 in Asia at percentage rates ranging from the high single digits up to 10% subject to specified reductions.

As of June 30, 2023, the Company has exercised its option to license the following four programs under the collaboration:

1.IRAK4 Program - a precision oncology program of small molecule inhibitors of IRAK4. The development candidate is emavusertib (CA-4948).

2.PD1/VISTA Program - an immuno-oncology program of small molecule antagonists of PD1 and VISTA immune checkpoint pathways. The development candidate is CA-170.

3.PD1/TIM3 Program - an immuno-oncology program of small molecule antagonists of PD1 and TIM3 immune checkpoint pathways. The development candidate is CA-327.

4.The Company exercised its option to license a fourth program, which is an immuno-oncology program.

For each of the licensed programs (as described above) the Company is obligated to use commercially reasonable efforts to develop, obtain regulatory approval for, and commercialize at least one product in each of the U.S., specified countries in the European Union and Japan, and Aurigene is obligated to use commercially reasonable efforts to perform its obligations under the development plan for such licensed program in an expeditious manner.

For each of the IRAK4, PD1/VISTA, PD1/TIM3 programs, and the fourth immuno-oncology program, the Company has remaining unpaid or unwaived payment obligations of $42.5 million per program, related to regulatory approval and commercial sales milestones, plus specified additional payments for approvals for additional indications, if any.

In addition to the collaboration agreement, the Company is party to a master development and manufacturing agreement with Aurigene for the supply of drug substance and drug product. Under this agreement, the Company incurred less than $0.1 million and $0.3 million in research and development expense during the three and six months ended June 30, 2023, respectively.

(c)ImmuNext

The Company is party to an option and license agreement with ImmuNext (the “ImmuNext Agreement”). Under the terms of the ImmuNext Agreement, the Company agreed to engage in a collaborative effort with ImmuNext, and to conduct a Phase 1 clinical trial of CI-8993. In exchange, ImmuNext granted the Company an exclusive option, exercisable until the earlier of (a) January 2024 or (b) 90 days after database lock for the first Phase 1 trial in which the endpoints are satisfied (the “Option Period”), to obtain an exclusive, worldwide license to develop and commercialize certain VISTA antagonizing compounds and products containing these compounds in the field of oncology.

If the Company elects to exercise the option, the Company has agreed to pay to ImmuNext an option exercise fee of $20.0 million. ImmuNext will be eligible to receive up to $4.6 million in potential development milestones, up to $84.3 million in potential regulatory approval milestones, and up to $125.0 million in potential sales milestone payments from the Company. ImmuNext is also eligible to receive tiered royalties on annual net sales on a product-by-product and country-by-country basis,

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at percentage rates ranging from high single digits to low double digits, subject to specified adjustments. In addition, the Company has agreed to pay ImmuNext a low double-digit percentage of sublicense revenue received by the Company or its affiliates.

9.     Common Stock

2021 Sales Agreement with Cantor Fitzgerald & Co. and JonesTrading Institutional Services LLC

The Company is party to a sales agreement (the “2021 Sales Agreement”) with Cantor Fitzgerald & Co. (“Cantor”) and JonesTrading Institutional Services LLC (“JonesTrading”) to sell from time to time up to $100.0 million of the Company’s common stock through an “at the market offering” program under which Cantor and JonesTrading act as sales agents. Subject to the terms and conditions of the 2021 Sales Agreement, Cantor and JonesTrading can sell the common stock by any method deemed to be an “at-the-market” offering as defined in Rule 415 promulgated under the Securities Act of 1933, as amended (the “Securities Act”).

Pursuant to the terms of the 2021 Sales Agreement, the aggregate compensation payable to each of Cantor and JonesTrading is 3% of the gross proceeds from sales of the common stock sold by Cantor or JonesTrading, as applicable. The Company did not sell any shares of common stock under the 2021 Sales Agreement during the three and six months ended June 30, 2023. As of June 30, 2023, $93.7 million remained available for sale under the 2021 Sales Agreement.

Registered Direct Offering

In July 2023, the Company entered into a securities purchase agreement with certain institutional investors, pursuant to which the Company sold and issued, in a registered direct offering (the “July Registered Direct”), an aggregate of 18,409,756 shares of common stock, $0.01 par value per share, of the Company, at a purchase price per share of $0.82 for net proceeds of approximately $13.9 million. The July Registered Direct closed on July 10, 2023.

10.     Stock Plans and Stock-Based Compensation

As of June 30, 2023, the Company had two stockholder-approved, stock-based compensation plans: (i) the Fourth Amended and Restated 2010 Stock Incentive Plan (“2010 Plan”) and (ii) the Amended and Restated 2010 Employee Stock Purchase Plan, (“ESPP”). New employees are typically issued options as an inducement equity award under Nasdaq Listing Rule 5635(c)(4) outside of the 2010 Plan (“Inducement Awards”).

The Fourth Amended and Restated 2010 Stock Incentive Plan

The 2010 Plan permits the granting of incentive and non-qualified stock options and stock awards to employees, officers, directors, and consultants of the Company and its subsidiaries at prices determined by the Company’s board of directors. The Company can issue up to 23,190,000 shares of its common stock pursuant to awards granted under the 2010 Plan. Options vest and become exercisable based on a schedule determined by the board of directors and expire up to ten years from the date of grant. The 2010 Plan uses a “fungible share” concept under which each share of stock subject to awards granted as options and stock appreciation rights (“SARs”), will cause one share per share under the award to be removed from the available share pool, while each share of stock subject to awards granted as restricted stock, restricted stock units, other stock-based awards or performance awards where the price charged for the award is less than 100% of the fair market value of the Company’s common stock will cause 1.3 shares per share under the award to be removed from the available share pool. As of June 30, 2023, 4,785,193 shares remained available for grant under the 2010 Plan.

During the six months ended June 30, 2023, the Company’s board of directors granted options to purchase 4,403,600 shares of the Company’s common stock to the officers and employees of the Company under the 2010 Plan. These options vest and become exercisable as to 25% of the shares underlying the award after the first year and as to an additional 6.25% of the shares underlying the award in each subsequent quarter, based upon continued employment over a four year period, and are exercisable at a price equal to the closing market price of the Company’s common stock on the grant date.

During the six months ended June 30, 2023, the Company’s board of directors granted options to its non-employee directors to purchase 425,000 shares of common stock under the 2010 Plan, which will vest and become exercisable in one year from the date of grant. These options were granted at an exercise price that equaled the closing market price of the Company’s common stock on the grant date.

Inducement Awards

For certain new employees, the Company issues Inducement Awards. These options generally vest as to 25% of the shares underlying the option on the first anniversary of the grant date, and as to an additional 6.25% of the shares underlying the option on each successive quarter thereafter. During the six months ended June 30, 2023, the Company’s board of directors

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granted Inducement Awards to purchase 635,450 shares of common stock. These options are granted at an exercise price that equals the closing market price of the Company’s common stock on the grant date.

Stock Options

A summary of stock option activity under the 2010 Plan and Inducement Awards are summarized as follows:

	Number of Shares	Weighted Average Exercise Price per Share		Weighted Average Remaining Contractual Life	Aggregate Intrinsic Value
Outstanding, December 31, 2022	13,673,256	$	3.24	6.51
Granted	5,464,050	0.71
Exercised	(10,312)	0.67
Canceled/Forfeited	(1,577,748)	3.35
Outstanding, June 30, 2023	17,549,246	$	2.44	7.38	$	629
Exercisable at June 30, 2023	8,859,233	$	3.18	5.66	$	6
Vested and unvested expected to vest at June 30, 2023	17,549,246	$	2.44	7.38	$	629

The weighted average grant date fair values of the stock options granted during the six months ended June 30, 2023 and 2022 were $0.60 and $2.57, respectively, and were calculated using the following estimated assumptions under the Black-Scholes option pricing model:

	Six Months Ended June 30,
	2023	2022
Expected term (years)	5.5	5.5
Risk free interest rate	3.5% - 3.6%	1.4% - 2.5%
Expected volatility	115% - 116%	110% - 112%
Expected dividends	None	None

As of June 30, 2023, there was approximately $10.9 million of unrecognized compensation cost related to unvested employee stock option awards outstanding, which is expected to be recognized as expense over a weighted average period of 2.86 years. The intrinsic value of employee stock options exercised during the six months ended June 30, 2023 was immaterial. There were no employee stock options exercised during the six months ended June 30, 2022.

Restricted Stock Awards

During the six months ended June 30, 2023, the Company’s board of directors granted restricted stock awards ("RSAs"), for an aggregate amount of 2,340,000 shares to the employees of the Company, excluding officers, under the 2010 Plan. These RSAs vest as to 50% of the shares underlying the award on the first anniversary of the date of the grant and 50% after the second anniversary, based upon continued employment.

The following table presents a summary of unvested RSAs under the 2010 Plan as of June 30, 2023:

	Number of Shares	Weighted Average Grant Date Fair Value
Unvested, December 31, 2022	—	$	—
Awarded	2,340,000	0.91
Vested	—	—
Forfeited	—	—
Unvested, June 30, 2023	2,340,000	$	0.91

As of June 30, 2023, there were 2,340,000 shares outstanding covered by RSAs that are expected to vest. The weighted average grant date fair value of these shares of restricted stock was $0.91 per share and the aggregate fair value of these shares of restricted stock was $2.1 million. As of June 30, 2023, there was $2.0 million of unrecognized compensation costs related to RSAs, which are expected to be recognized as expense over a remaining weighted average period of 1.86 years.

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Amended and Restated 2010 Employee Stock Purchase Plan

The Company has reserved 2,000,000 shares of common stock for issuance under the ESPP. Eligible employees may purchase shares of the Company’s common stock at 85% of the lower closing market price of the common stock at the beginning of the enrollment period or ending date of the purchase period within a two-year enrollment period, as defined. The Company has four six-month purchase periods per each two-year enrollment period. If, within any one of the four purchase periods in an enrollment period, the purchase period ending stock price is lower than the stock price at the beginning of the enrollment period, the two-year enrollment resets at the new lower stock price. During the three and six months ended June 30, 2023, 386,900 shares were issued under the ESPP. As of June 30, 2023, there were 788,108 shares available for future purchase under the ESPP.

Stock-Based Compensation Expense

For the three and six months ended June 30, 2023 and 2022, the Company recorded stock-based compensation expense to the following line items in its costs and expenses section of the Condensed Consolidated Statements of Operations and Comprehensive Loss:

	Three Months Ended June 30,				Six Months Ended June 30,
(in thousands)	2023		2022		2023		2022
Research and development expenses	$	654	$	854	$	1,283	$	1,579
General and administrative expenses	770		1,112		1,536		2,105
Total stock-based compensation expense	$	1,424	$	1,966	$	2,819	$	3,684

11.     Loss Per Common Share

Basic and diluted loss per common share is computed by dividing net loss attributable to common stockholders by the weighted average number of common shares outstanding during the period. Diluted net loss per common share is the same as basic net loss per common share for the three and six months ended June 30, 2023 and 2022, because the effect of the potential common stock equivalents would be antidilutive due to the Company’s net loss position for these periods. Antidilutive securities consist of stock options outstanding of 17,549,246 and 14,585,299 as of June 30, 2023 and 2022, respectively and unvested restricted stock awards of 2,340,000 as of June 30, 2023.

Item 2.     MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion of our financial condition and results of operations should be read in conjunction with the Condensed Consolidated Financial Statements and the related notes appearing elsewhere in this report. Some of the information contained in this discussion and analysis and set forth elsewhere in this report, including information with respect to our plans and strategy for our business, includes forward-looking statements, based on current expectations and related to future events and our future financial and operational performance, that involve risks and uncertainties. You should review the discussion above under the heading “Risk Factor Summary” and the risk factors detailed further in Item 1A, “Risk Factors” of Part I of our Annual Report on Form 10-K for the year ended December 31, 2022 as supplemented by the risk factors discussed in Part II, Item 1A, “Risk Factors” in our Quarterly Report on Form 10-Q for the quarter ended March 31, 2023, and those included under Part II, Item 1A of this Quarterly Report on Form 10-Q for a discussion of important factors that could cause actual results to differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis. As used throughout this report, the terms “the Company,” “we,” “us,” and “our” refer to the business of Curis, Inc. and its wholly owned subsidiaries, except where the context otherwise requires, and the term “Curis” refers to Curis, Inc.

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Overview

We are seeking to develop and commercialize innovative drug candidates to treat cancer. We pursue our product development initiatives and conduct our research and development programs both internally and through strategic collaborations. Our product development initiatives and research and development programs are discussed in more detail below.

Our lead clinical stage drug candidate is emavusertib, an orally available small molecule inhibitor of Interleukin-1 receptor-associated kinase 4, or IRAK4. Emavusertib is currently undergoing testing in a Phase 1/2 open-label, single arm dose escalating and expansion trial in patients with relapsed or refractory, or R/R, acute myeloid leukemia, or AML, and high-risk myelodysplastic syndromes, or hrMDS, also known as the TakeAim Leukemia Phase 1/2 trial. In April 2021, emavusertib was granted Orphan Drug Designation for the treatment of R/R AML and hrMDS by the U.S. Food and Drug Administration, or FDA.

We are also conducting a separate Phase 1/2 open-label dose escalating clinical trial in patients with relapsed or refractory hematologic malignancies, such as non-Hodgkin lymphomas, or NHL, including those with Myeloid Differentiation Primary Response Protein 88, or MYD88, alterations, also known as the TakeAim Lymphoma Phase 1/2 trial.

The FDA placed partial clinical holds on our TakeAim Leukemia Phase 1/2 trial and our TakeAim Lymphoma Phase 1/2 trial after we reported a serious adverse event in the TakeAim Leukemia Phase 1/2 trial. In August 2022, the FDA lifted the partial clinical hold on the TakeAim Lymphoma Phase 1/2 trial. In July 2023, we announced that the FDA has removed the partial clinical hold on the TakeAim Leukemia Phase 1/2 trial.

In June 2022, we provided initial preliminary clinical data for patients in the combination portion of the TakeAim Lymphoma Phase 1/2 trial, and we presented initial clinical data for patients from the TakeAim Leukemia Phase 1/2 trial in both January and December 2022.

Our pipeline also includes several compounds, including CI-8993, fimepinostat, CA-170, and CA-327 which have been deprioritized to enable us to focus our available resources on the continued development of emavusertib.

We are party to a collaboration agreement with Genentech Inc., or Genentech, a member of the Roche Group, under which Genentech and F. Hoffmann-La Roche Ltd, or Roche, are commercializing Erivedge® (vismodegib), a first-in-class orally administered small molecule Hedgehog signaling pathway antagonist. Erivedge is approved for the treatment of advanced basal cell carcinoma, or BCC.

We are party to an exclusive collaboration agreement with Aurigene Discovery Technologies Limited, or Aurigene, for the discovery, development and commercialization of small molecule compounds in the areas of immuno-oncology and precision oncology. As of June 30, 2023, we have licensed four programs under the Aurigene collaboration, including emavusertib.

In addition, we are party to an option and license agreement with ImmuNext. Pursuant to the terms of the option and license agreement, we have an option, exercisable for a specified period as set forth in the option and license agreement, to obtain an exclusive license to develop and commercialize certain VISTA antagonizing compounds, including ImmuNext's lead compound, CI-8993, and products containing these compounds in the field of oncology.

Liquidity

Since our inception, we have funded our operations primarily through private and public placements of our equity securities, license fees, contingent cash payments, research and development funding from our corporate collaborators, and the monetization of certain royalty rights. We have never been profitable on an annual basis and had an accumulated deficit of $1.2 billion as of June 30, 2023. For the six months ended June 30, 2023, we incurred a net loss of $23.5 million and used $20.1 million of cash in operations.

We expect to continue to generate operating losses in the foreseeable future. Based on our current operating plan, we believe that our $63.5 million of cash, cash equivalents and investments as of June 30, 2023, and the net proceeds of approximately $13.9 million from the July Registered Direct discussed below, should be sufficient to fund our operations into 2025. We have based this assessment on assumptions that may prove to be wrong, and we could exhaust our available capital resources sooner than we expect.

We will need to generate significant revenues to achieve profitability, and do not expect to achieve profitability in the foreseeable future, if at all. If sufficient funds are not available, we will have to delay, reduce the scope of, or eliminate some of our research and development programs, including related clinical trials and operating expenses, potentially delaying the time to market for or preventing the marketing of any of our product candidates, which could adversely affect our business prospects and our ability to continue our operations, and would have a negative impact on our financial condition and ability to pursue our business strategies. In addition, we may seek to engage in one or more strategic alternatives, such as a strategic partnership with one or more parties, the licensing, sale or divestiture of some of our assets or proprietary technologies or the sale of our

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company, but there can be no assurance that we would be able to enter into such a transaction or transactions on a timely basis or on terms favorable to us, or at all.

Key Drivers

We believe that near term key drivers to our success will include:

•our ability to focus and successfully plan and execute current and planned clinical trials for emavusertib, and for such clinical trials to generate favorable data; and

•our ability to raise additional financing, when required, to fund operations.

In the longer term, a key driver to our success will be our ability, or that of a current or future collaborator, to successfully develop and commercialize drug candidates.

Our Collaborations and License Agreements

For information regarding our collaboration and license agreements, refer to Note 8, Research and Development Collaborations, in the accompanying Notes to the Condensed Consolidated Financial Statements included in Item 1 of Part I of this Quarterly Report on Form 10-Q and Note 11, Research and Development Collaborations, in Item 8 of Part II of our Annual Report on Form 10-K for the year ended December 31, 2022 as filed with the Securities and Exchange Commission, or SEC, on March 13, 2023.

Financial Operations Overview

General. Our future operating results will largely depend on the progress of drug candidates currently in our research and development pipeline. The results of our operations will vary significantly from year to year and quarter to quarter and depend on, among other factors, the cost and outcome of any preclinical development or clinical trials then being conducted. For a discussion of our liquidity and funding requirements, see “Liquidity” and “Liquidity and Capital Resources - Funding Requirements”.

Liability Related to the Sale of Future Royalties. In March 2019, we and our wholly owned subsidiary, Curis Royalty LLC, or Curis Royalty, entered into the royalty interest purchase agreement, or Oberland Purchase Agreement, with entities managed by Oberland Capital Management, LLC, or the Purchasers. Upon closing of the Oberland Purchase Agreement, Curis Royalty received an upfront purchase price of $65.0 million, less certain transaction costs, from the Purchasers. Curis Royalty will also be entitled to receive milestone payments of $53.5 million if the Purchasers receive payments pursuant to the Oberland Purchase Agreement in excess of $117.0 million on or prior to December 31, 2026, which milestone payments may each be paid, at the option of the Purchasers, in a lump sum in cash or out of the Purchaser’s portion of future payments under the Oberland Purchase Agreement.

In March 2023, Curis and Curis Royalty received a letter from counsel to Oberland Capital Management, LLC, the Purchasers and Lind SA LLC, a Delaware limited liability company managed by Oberland Capital Management, LLC, as collateral agent for the Purchasers, or the Agent, alleging defaults under Sections 4.04 and 6.04(b) of the Oberland Purchase Agreement and demanding cure of the asserted default under Section 6.04(b) of the Oberland Purchase Agreement. The asserted basis for the alleged defaults is that Curis and Curis Royalty were required to disclose, and failed to disclose, certain information prior to execution of the Oberland Purchase Agreement and that Curis and Curis Royalty have since failed to disclose certain information that has been requested by the Purchasers pursuant to Section 6.04(b) of the Oberland Purchase Agreement. The letter further alleges that these alleged defaults are events of default under the Oberland Purchase Agreement and that each alleged default separately entitles the Purchasers to exercise the put option, which would require Curis Royalty to repurchase a portion of certain royalty and royalty related payments, excluding a portion of non U.S. royalties retained by Curis Royalty, referred to as the Purchased Receivables, at a price, referred to as the Put/Call Price, equal to 250% of the sum of the upfront purchase price and any portion of the milestone payments paid in a lump sum by the Purchasers, if any, minus certain payments previously received by the Purchasers with respect to the Purchased Receivables. The Purchasers have not attempted to exercise that put option but have purported to reserve their alleged right to exercise it without further notice. As of June 30, 2023, the estimated amount of the Put/Call Price is up to $68.0 million. The Purchasers have also reserved other asserted rights in respect of the alleged defaults, including the asserted right to seek judicial remedies, including for damages and rescission, and to assert alleged claims against Curis and Curis Royalty for indemnification on the basis of material breach and fraud in the inducement. Curis and Curis Royalty dispute these allegations. However, if Oberland elects to pursue these claims, and if Curis and Curis Royalty are unsuccessful in defending against these claims, it could have a material adverse impact on Curis and Curis Royalty, including their ability to continue as a going concern.

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For a discussion of the Oberland Purchase Agreement, see “Liquidity and Capital Resources – Royalty Interest Purchase Agreement”. A further discussion of risks related to the letter from counsel to Oberland Capital Management, LLC, the Purchasers and the Agent, is set forth under Item 1A, “Risk Factors” of Part I of our Annual Report on Form 10-K for the year ended December 31, 2022.

Revenue. We do not expect to generate any revenues from our direct sale of products for several years, if ever. Substantially all of our revenues to date have been derived from license fees, research and development payments, and other amounts that we have received from our strategic collaborators and licensees, including royalty payments. We recognize royalty revenues related to Genentech’s sales of Erivedge and we expect to continue to recognize royalty revenue in future quarters from Genentech’s sales of Erivedge in the U.S. and Roche’s sales of Erivedge outside of the U.S. However, a significant portion of our royalty and royalty-related revenues under our collaboration with Genentech will be paid to the Purchasers, pursuant to the Oberland Purchase Agreement. The Oberland Purchase Agreement will terminate upon the earlier to occur of (i) the date on which Curis Royalty’s rights to receive the Purchased Receivables owed by Genentech under the Genentech collaboration agreement have terminated in their entirety or (ii) the date on which payment in full of the Put/Call Price is received by the Purchasers pursuant to the Purchasers’ exercise of their put option or Curis Royalty’s exercise of its call right. For additional information regarding the terms and termination provisions of the Oberland Purchase Agreement, see Note 7, Liability Related to the Sale of Future Royalties, in the accompanying Notes to the Condensed Consolidated Financial Statements included in Item 1 of Part I of this Quarterly Report on Form 10-Q.

We could receive additional milestone payments from Genentech, provided that contractually specified development and regulatory objectives or specified royalty payment amounts are met within applicable time periods. Our only source of revenues and/or cash flows from operations for the foreseeable future will be royalty payments that are contingent upon the continued commercialization of Erivedge under our collaboration with Genentech, and contingent cash payments for the achievement of clinical, development and regulatory objectives, if any, that are met, under our collaboration with Genentech. Our receipt of additional payments under our collaboration with Genentech cannot be assured, nor can we predict the timing of any such payments, as the case may be.     

Research and Development. Research and development expense consists of costs incurred to develop our drug candidates. These expenses consist primarily of:

•salaries and related expenses for personnel, including stock-based compensation expense;

•costs of conducting clinical trials, including amounts paid to clinical centers, clinical research organizations and consultants, among others;

• other outside service costs including costs of contract manufacturing;

•sublicense payments;

•the costs of supplies and reagents;

•occupancy and depreciation charges; and

•certain payments that we make to Aurigene and ImmuNext under our collaboration agreements, including, for example, option exercise fees and milestone payments.

We anticipate that in the near term, our research and development expense will be primarily related to our continued development of emavusertib.

We expense research and development costs as incurred.

Research and development activities are central to our business model. Product candidates in later stages of clinical development generally have higher development costs than those in earlier stages, primarily due to the increased size and duration of later-stage clinical trials. As a result, we expect that our research and development expenses will increase substantially over the next several years as we conduct our clinical trials for emavusertib; prepare regulatory filings for emavusertib and any other product candidates we may pursue; potentially develop additional product candidates; and potentially advance our product candidates into later stages of clinical development.

The successful development and commercialization of our product candidates is highly uncertain. At this time, we cannot reasonably estimate or know the nature, timing and costs of the efforts that will be necessary to complete the preclinical and clinical development of emavusertib and any other product candidates we may pursue. This uncertainty is due to the numerous risks and uncertainties associated with product development and commercialization, including the uncertainty of:

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•our ability to successfully enroll our current and future clinical trials and our ability to initiate future clinical trials;

•the scope, quality of data, rate of progress and cost of clinical trials and other research and development activities undertaken by us or our collaborators;

•the cost and timing of regulatory approvals and maintaining compliance with regulatory requirements;

•the results of future preclinical studies and clinical trials;

•the cost of establishing clinical and commercial supplies of our drug candidates and any products that we may develop;

•the cost and timing of establishing sales, marketing and distribution capabilities;

•our ability to become and remain profitable, which requires that we, either alone or with collaborators, must develop and eventually commercialize one or more drug candidates with significant market potential and successfully launch a product for commercial sale;

•the effect of competing technological and market developments; and

•the cost and effectiveness of filing, prosecuting, defending and enforcing any patent claims and other intellectual property rights.

Any changes in the outcome of any of these variables with respect to the development of our product candidates could mean a significant change in the costs and timing associated with the development of these product candidates. For example, if the FDA or another regulatory authority delays our clinical trials or requires us to conduct clinical trials or other testing beyond those that we currently expect, or if we experience significant delays in enrollment in any of our clinical trials, we could be required to expend significant additional financial resources and time to complete clinical development of that product candidate. We may never obtain regulatory approval for any of our product candidates. If we do obtain regulatory approval for our product candidates, drug commercialization will take several years and millions of dollars in development costs.

A further discussion of some of the risks and uncertainties associated with completing our research and development programs on schedule, or at all, and some consequences of failing to do so, are set forth under Item 1A, “Risk Factors” of Part I of our Annual Report on Form 10-K for the year ended December 31, 2022, as supplemented by the risk factors discussed in Part II, Item 1A, “Risk Factors” in our Quarterly Report on Form 10-Q for the quarter ended March 31, 2023, and those included under Part II, Item 1A of this Quarterly Report on Form 10-Q.

General and Administrative. General and administrative expense consists primarily of salaries and related expenses, including stock-based compensation expense for personnel in executive, finance, accounting, business development, legal, information technology, corporate communications and human resource functions. Other costs include facility costs not otherwise included in research and development expense, insurance, and professional fees for legal, patent and accounting services. Patent costs include certain patents covered under collaborations, a portion of which is reimbursed by collaborators and a portion of which is borne by us.

Critical Accounting Policies and Estimates

The preparation of our Condensed Consolidated Financial Statements in conformity with accounting principles generally accepted in the United States requires that we make estimates and assumptions that affect the reported amounts and disclosure of certain assets and liabilities at our balance sheet date. Such estimates and judgments include the carrying value of goodwill, revenue recognition, the value of certain liabilities, debt classification and stock-based compensation. We base our estimates on historical experience and on various other factors that we believe to be appropriate under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

During the six months ended June 30, 2023, there were no material changes to our critical accounting policies and estimates as reported in our Annual Report on Form 10-K for the year ended December 31, 2022, which was filed with the SEC on March 13, 2023.

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Results of Operations

Three and Six Months Ended June 30, 2023 and 2022

The following table summarizes our results of operations for the three and six months ended June 30, 2023 and 2022:

	For the Three Months Ended June 30,				Percentage Increase (Decrease)		For the Six Months Ended June 30,				Percentage Increase (Decrease)
	2023		2022				2023		2022
	(in thousands)						(in thousands)
Revenues, net:	$	2,197	$	2,393	(8)	%	$	4,494	$	4,450	1	%
Costs and expenses:
Cost of royalties	74		42		76	%	98		124		(21)	%
Research and development	10,012		12,323		(19)	%	19,152		23,758		(19)	%
General and administrative	4,249		5,089		(17)	%	9,009		10,762		(16)	%
Other (income) expense	(177)		879		(120)	%	(245)		1,855		(113)	%
Net loss	$	(11,961)	$	(15,940)	(25)	%	$	(23,520)	$	(32,049)	(27)	%

Revenues, net 

Revenues, net of $2.2 million decreased by 8% for the three months ended June 30, 2023 as compared to the same period in 2022. The decrease was driven by decreased net sales of Erivedge during the current year period as compared to the prior year period.

Revenues, net of $4.5 million increased by 1% for the six months ended June 30, 2023 as compared to the same period in 2022. The increase was driven by increased net sales of Erivedge during the current year period as compared to the prior year period.

Cost of Royalties

Cost of royalties is comprised of amounts due to third-party university patent licensors in connection with Genentech and Roche's Erivedge net sales.

Research and Development Expenses. Research and development expenses are summarized as follows:

	For the Three Months Ended June 30,				Percentage Increase (Decrease)		For the Six Months Ended June 30,				Percentage Increase (Decrease)
	2023		2022				2023		2022
	(in thousands)						(in thousands)
Direct research and development costs	$	5,911	$	5,765	3	%	$	10,707	$	11,743	(9)	%
Employee related costs	3,543		5,744		(38)	%	7,292		10,621		(31)	%
Facility related costs	558		814		(31)	%	1,153		1,394		(17)	%
Total research and development expenses	$	10,012	$	12,323	(19)	%	$	19,152	$	23,758	(19)	%

Research and development expenses were $10.0 million for the three months ended June 30, 2023 as compared to $12.3 million in the same period in 2022, a decrease of approximately $2.3 million, or 19%. The decrease was primarily attributable to lower employee related costs due to a reduction in headcount.

Research and development expenses were $19.2 million for the six months ended June 30, 2023 as compared to $23.8 million in the same period in 2022, a decrease of approximately $4.6 million, or 19%. The decrease was primarily attributable to lower employee related costs due to a reduction in headcount and decreased consulting, research, and manufacturing costs partially offset by increased clinical costs.

We expect that a majority of our research and development expenses for the foreseeable future will be incurred in connection with our efforts to advance emavusertib and our other programs, including clinical and preclinical development costs, manufacturing, and payments to our collaborators and/or licensors.

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General and Administrative Expenses. General and administrative expenses are summarized as follows:

	For the Three Months Ended June 30,				Percentage Increase (Decrease)		For the Six Months Ended June 30,				Percentage Increase (Decrease)
	2023		2022				2023		2022
	(in thousands)						(in thousands)
Employee related costs	$	2,256	$	2,993	(25)	%	$	4,583	$	5,827	(21)	%
Professional, legal, and consulting services	1,107		1,102		—	%	2,609		2,913		(10)	%
Facility related costs	606		597		1	%	1,249		1,219		2	%
Insurance costs	280		397		(29)	%	568		803		(29)	%
Total general and administrative expenses	$	4,249	$	5,089	(17)	%	$	9,009	$	10,762	(16)	%

General and administrative expenses were $4.2 million for the three months ended June 30, 2023, as compared to $5.1 million in the same period in 2022, a decrease of $0.8 million, or 17%. The decrease was primarily attributable to lower employee related costs due to a reduction in headcount.

General and administrative expenses were $9.0 million for the six months ended June 30, 2023, as compared to $10.8 million in the same period in 2022, a decrease of $1.8 million, or 16%. The decrease was primarily attributable to lower employee related costs due to a reduction in headcount.

Other Income and Expense

Other income and expense decreased by $1.1 million, or 120%, for the three months ended June 30, 2023 as compared to the same period in 2022. The decrease was attributable to increased interest income offset by decreased expense related to future royalty payments.

Other income and expense decreased by $2.1 million, or 113%, for the three months ended June 30, 2023 as compared to the same period in 2022. The decrease was attributable to increased interest income offset by decreased expense related to future royalty payments.

Liquidity and Capital Resources

We have financed our operations primarily through private and public placements of our equity securities, license fees, contingent cash payments and research and development funding from our corporate collaborators, and the monetization of certain royalty rights. See “Funding Requirements” below and Note 1 to the Condensed Consolidated Financial Statements included in Item 1 of Part I of this Quarterly Report on Form 10-Q for a further discussion of our liquidity.

As of June 30, 2023, our principal sources of liquidity consisted of cash, cash equivalents and investments of $63.5 million, excluding our restricted cash of $0.6 million. Our cash and cash equivalents are highly liquid investments with a maturity of three months or less at date of purchase. Our short-term investments primarily include U.S. Treasury securities, U.S. agency bonds, commercial paper and corporate debt securities. We maintain cash balances with financial institutions in excess of insured limits.

Equity Offerings

We are party to a sales agreement, or the 2021 Sales Agreement, with Cantor Fitzgerald & Co., or Cantor, and JonesTrading Institutional Services LLC , or JonesTrading, to sell from time to time up to $100.0 million of our common stock through an “at-the-market offering” program under which Cantor and JonesTrading act as sales agents. To date, we have sold 4,583,695 shares, representing gross proceeds of $6.3 million. We did not sell any shares of common stock under the 2021 Sales Agreement during the three and six months ended June 30, 2023. As of June 30, 2023, $93.7 million remained available for sale under the 2021 Sales Agreement.

In July 2023, we entered into a securities purchase agreement with certain institutional investors, pursuant to which we sold and issued, in a registered direct offering, or the July Registered Direct, an aggregate of 18,409,756 shares of our common stock, $0.01 par value per share, at a purchase price per share of $0.82 for net proceeds of approximately $13.9 million. The July Registered Direct closed on July 10, 2023.

Royalty Interest Purchase Agreement

In March 2019, we and Curis Royalty entered into the Oberland Purchase Agreement with the Purchasers. We sold to the Purchasers a portion of our rights to receive royalties from Genentech on potential net sales of Erivedge.

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As upfront consideration for the purchase of the royalty rights, at closing the Purchasers paid to Curis Royalty $65.0 million less certain transaction expenses. Curis Royalty will also be entitled to receive up to $53.5 million in milestone payments based on sales of Erivedge if the Purchasers receive payments pursuant to the Oberland Purchase Agreement in excess of $117.0 million on or prior to December 31, 2026. For further discussion please refer to Note 7, Liability Related to the Sale of Future Royalties, in the accompanying Notes to the Condensed Consolidated Financial Statements included in Item 1 of Part I of this Quarterly Report on Form 10-Q.

In March 2023, Curis and Curis Royalty received a letter from counsel to Oberland Capital Management, LLC, the Purchasers and the Agent alleging defaults under the Oberland Purchase Agreement. The letter further alleges that these alleged defaults are events of default under the Oberland Purchase Agreement and that each alleged default separately entitles the Purchasers to exercise the put option, which would require Curis Royalty to repurchase the Purchased Receivables at the Put/Call Price. The Purchasers have not attempted to exercise that put option but have purported to reserve their alleged right to exercise it without further notice. As of June 30, 2023, the estimated amount of the Put/Call Price is up to $68.0 million. The Purchasers have also reserved other asserted rights in respect of the alleged defaults, including the asserted right to seek judicial remedies, including for damages and rescission, and to assert alleged claims against Curis and Curis Royalty for indemnification on the basis of material breach and fraud in the inducement. Curis and Curis Royalty dispute these allegations. However, if Oberland elects to pursue these claims, and if Curis and Curis Royalty are unsuccessful in defending against these claims, it could have a material adverse impact on Curis and Curis Royalty, including their ability to continue as a going concern.

A further discussion of risks related to the letter from counsel to Oberland Capital Management, LLC, the Purchasers and the Agent, is set forth under Item 1A, “Risk Factors” of Part I of our Annual Report on Form 10-K for the year ended December 31, 2022.

Milestone Payments and Monetization of Royalty Rights

We began receiving royalty revenues in 2012 in connection with Genentech’s sales of Erivedge in the U.S. and Roche’s sales of Erivedge outside of the U.S. Erivedge royalty revenues received after December 2012 have been used to repay Curis Royalty’s outstanding principal and interest under credit agreements. A substantial portion of Erivedge royalty and royalty-related revenue payments will be paid to the Purchasers pursuant to the Oberland Purchase Agreement. We also remain entitled to receive any contingent payments upon achievement of clinical development objectives and royalty payments related to sales of Erivedge pursuant to our collaboration agreement with Genentech and certain contingent payments upon achievement of contractually specified royalty revenue payment amounts related to sales of Erivedge pursuant to the Oberland Purchase Agreement. Upon receipt of any such payments, as well as on royalties received, we are required to make payments to certain university licensors totaling 5% of these amounts, subject to expiration of our obligations.

Cash Flows from Operating Activities

Cash flows from operating activities consist of our net loss adjusted for various non-cash items and changes in operating assets and liabilities. Cash used in operating activities during the six months ended June 30, 2023 and 2022 was $20.1 million and $28.9 million, respectively. Net cash used in operations decreased by $8.9 million due to decreased research and development expenses and timing of payments.

Cash Flows from Investing Activities

Cash provided by investing activities during the six months ended June 30, 2023 and 2022 was $23.1 million and $25.3 million, respectively. Cash provided by investing activities during both periods was primarily due to net investment activity from purchases and sales or maturities of investments for the respective periods.

Cash Flows from Financing Activities

Cash used in financing activities during the six months ended June 30, 2023 and 2022 was $2.9 million and $2.4 million, respectively. Cash used in financing activities during both periods was primarily due to payments related to the royalty interest for the Oberland Purchase Agreement.

Funding Requirements

We have incurred significant losses since our inception. As of June 30, 2023, we had an accumulated deficit of $1.2 billion. We will require substantial funds to continue our research and development programs and to fulfill our planned operating goals. Our planned operating and capital requirements currently include the support of our current and future research and development activities for emavusertib as well as development candidates we have and continue to license under our collaborations with Aurigene and ImmuNext. We will require substantial additional capital to fund the further development of these programs, as well as to fund our general and administrative costs and expenses. Moreover, our agreements with collaborators impose significant potential financial obligations on us. For example, under our collaboration, license and option

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agreement with Aurigene, we are required to make milestone, royalty and option fee payments for discovery, research and preclinical development programs that will be performed by Aurigene, which impose significant potential financial obligations on us. In addition, if we choose to exercise our option under the option and license agreement with ImmuNext, or the ImmuNext Agreement, we will be required to make milestone, royalty, and option fee payments in connection with the development of CI-8993.

Based on our current operating plan, we believe that our existing cash, cash equivalents and investments of $63.5 million as of June 30, 2023, and the net proceeds of approximately $13.9 million from the July Registered Direct, should be sufficient to fund our operations into 2025. We have based this assessment on assumptions that may prove to be wrong, and we could exhaust our available capital resources sooner than we expect. If we are unable to obtain sufficient funding, we will be forced to delay, reduce in scope or eliminate some of our research and development programs, including related clinical trials and operating expenses, potentially delaying the time to market for, or preventing the marketing of, any of our product candidates, which could adversely affect our business prospects and our ability to continue operations, and would have a negative impact on our financial condition and our ability to pursue our business strategies. Resources have been reallocated to the emavusertib programs and resources dedicated to all other pipeline programs have been reduced. Our ability to raise additional funds will depend on financial, economic and market conditions, many of which are outside of our control, and we may be unable to raise financing when needed, or on terms favorable to us, or at all. In addition, we may seek to engage in one or more strategic alternatives, such as a strategic partnership with one or more parties, the licensing, sale or divestiture of some of our assets or proprietary technologies or the sale of our company, but there can be no assurance that we would be able to enter into such a transaction or transactions on a timely basis or on terms favorable to us, or at all. Our failure to raise capital through a financing or strategic alternative as and when needed would have a negative impact on our financial condition and our ability to pursue our business strategy. If we are unable to raise sufficient capital we would be unable to fund our operations and may be required to evaluate alternatives, which could include dissolving and liquidating our assets or seeking protection under the bankruptcy laws, and a determination to file for bankruptcy could occur at a time that is earlier than when we would otherwise exhaust our cash resources. If we decide to dissolve and liquidate our assets or to seek protection under the bankruptcy laws, it is unclear to what extent we would be able to pay our obligations, and, accordingly, it is further unclear whether and to what extent any resources would be available for distributions to stockholders.

Furthermore, there are a number of factors that may affect our future capital requirements and further accelerate our need for additional working capital, many of which are outside our control, including the following:

•unanticipated costs in our research and development programs;

•the timing and cost of obtaining regulatory approvals for our drug candidates and maintaining compliance with regulatory requirements;

•payments due to licensors, including Aurigene and ImmuNext if we exercise our option under the ImmuNext Agreement, for patent rights and technology used in our drug development programs;

•the costs of commercialization activities for any of our drug candidates that receive marketing approval, to the extent such costs are our responsibility, including the costs and timing of establishing drug sales, marketing, distribution and manufacturing capabilities;

•unplanned costs to prepare, file, prosecute, defend and enforce patent claims and other patent-related costs, including litigation costs and technology license fees;

•unexpected losses in our cash investments or an inability to otherwise liquidate or access our cash investments due to unfavorable conditions in the capital markets, including volatility and instability in the capital markets; and

•our ability to continue as a going concern.

To become and remain profitable, we, either alone or with collaborators, must develop and eventually commercialize one or more drug candidates with significant market potential. This will require us to be successful in a range of challenging activities, including completing preclinical testing and clinical trials of our drug candidates, obtaining marketing approval for these drug candidates, manufacturing, marketing and selling those drugs for which we may obtain marketing approval and satisfying any post marketing requirements. We may never succeed in these activities and, even if we do, may never generate revenues that are significant or large enough to achieve profitability. Other than Erivedge, which is being commercialized by Genentech and Roche, our most advanced drug candidates are currently only in early clinical testing.

For the foreseeable future, we will need to spend significant capital in an effort to develop and commercialize products and we expect to incur substantial operating losses. Our failure to become and remain profitable would, among other things, depress the market price of our common stock and could impair our ability to raise capital, expand our business, diversify our research and development programs or continue our operations.

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New Accounting Pronouncements

For detailed information regarding recently issued accounting pronouncements and the expected impact on our Condensed Consolidated Financial Statements, see Note 2h, New Accounting Pronouncements, in the accompanying Notes to the Condensed Consolidated Financial Statements included in Item 1 of Part I of this Quarterly Report on Form 10-Q.

Contractual Obligations

There have been no material changes to our contractual obligations set forth under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Contractual Obligations” in our Annual Report on Form 10-K for the year ended December 31, 2022.

Item 3.    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not required.

Item 4.    CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls & Procedures

Our management, with the participation of our chief executive officer and chief financial officer, evaluated the effectiveness of our disclosure controls and procedures as of June 30, 2023. The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended, or the Exchange Act, means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating the cost benefit relationship of possible controls and procedures. Based on the evaluation of our disclosure controls and procedures as of June 30, 2023, our chief executive officer and chief financial officer concluded that, as of such date, our disclosure controls and procedures were effective at the reasonable assurance level.

Changes in Internal Control Over Financial Reporting

No change in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) occurred during the three months ended June 30, 2023 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II—OTHER INFORMATION 

Item 1A.    RISK FACTORS

The following information updates, and should be read in conjunction with, the risk factors discussed in Part I, Item 1A, “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2022, or the 2022 10-K, which was filed with the SEC on March 13, 2023, as supplemented by the risk factor discussed in Part II, Item 1A, “Risk Factors” in our Quarterly Report on Form 10-Q for the quarter ended March 31, 2023, or the Q1 2023 10-Q, which was filed with the SEC on May 4, 2023. Any of the risk factors contained in this Quarterly Report on Form 10-Q, the Q1 2023 10-Q, and the 2022 10-K could materially affect our business, financial condition or future results, and such risk factors may not be the only risks we face. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition or future results.

Any delay or inability to continue or complete our clinical trials of emavusertib could materially adversely affect our business, prospects, financial condition and operations.

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We may experience delays in opening new trial sites and enrolling patients in our TakeAim Leukemia Phase 1/2 trial, TakeAim Lymphoma Phase 1/2 trial, or in any trial of ours. Any delay in enrolling patients or our inability to continue or complete our clinical trials of emavusertib will delay or may cause us to terminate our clinical development plans for emavusertib, may require us to incur additional clinical development costs, may slow down our product candidate development and approval process, and could impair our ability to ultimately obtain FDA approval for emavusertib and commence product sales and generate revenue, any of which could materially adversely affect our business, prospects, financial condition and operations. Further, we cannot assure you that we will not observe safety events in our clinical trials, similar to that which resulted in partial clinical holds and subsequent removal of the partial clinical holds in our TakeAim Leukemia Phase 1/2 trial and TakeAim Lymphoma Phase 1/2 trial, which may lead to future clinical holds, or necessitate additional or amended trials, any of which could have a material adverse effect on our business, prospects, financial condition and operations.

Item 6.    Exhibits

Exhibit Number	Description
10.1 *	Employment Agreement, entered into on May 1, 2023, by and between Curis, Inc. and Jonathan Zung
31.1 *	Certification of the Chief Executive Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Exchange Act
31.2 *	Certification of the Principal Financial Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Exchange Act
32.1 *	Certification of the Chief Executive Officer pursuant to Rule 13a-14(b) of the Exchange Act and 18 U.S.C. Section 1350
32.2 *	Certification of the Principal Financial Officer pursuant to Rule 13a-14(b) of the Exchange Act and 18 U.S.C. Section 1350
101.INS *	InLine XBRL Instance Document
101.SCH *	InLine XBRL Taxonomy Extension Schema Document
101.CAL *	InLine XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF *	InLine XBRL Taxonomy Extension Definition Linkbase Document
101.LAB *	InLine XBRL Taxonomy Extension Label Linkbase Document
101.PRE *	InLine XBRL Taxonomy Extension Presentation Linkbase Document
104	Cover Page Interactive Data File

* Filed herewith

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Signatures

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

		CURIS, INC.
Dated:	August 3, 2023	By:	/S/ JAMES E. DENTZER
			James E. Dentzer
			President and Chief Executive Officer
			(Principal Executive Officer)
		CURIS, INC.
		By:	/S/ DIANTHA DUVALL
			Diantha Duvall
			Chief Financial Officer
			(Principal Financial and Accounting Officer)

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EX-10.1

EXHIBIT 10.1

EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT (the “Agreement”), is entered into by and between Curis, Inc., a Delaware corporation (the “Company”), and Jonathan B. Zung (the “Employee”).

WHEREAS the Company desires to employ the Employee, and the Employee desires to be employed by the Company on the terms set forth in this Agreement. In consideration of the mutual covenants and promises contained herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

1.    Term of Employment. The Company hereby agrees to employ the Employee, and the Employee hereby accepts employment with the Company, upon the terms set forth in this Agreement, for the period commencing on May 1, 2023 (the “Commencement Date”) and continuing until terminated in accordance with the provisions of Section 4 (the “Employment Period”). During the Employment Period, the Employee shall be an at-will employee of the Company and the Employee’s employment and the Employment Period shall be freely terminable by either party, for any reason, at any time, with or without cause or notice, subject to the provisions set forth in Section 4 below.

2.    Position.

(a)    The Employee shall serve as Chief Development Officer. The Employee shall have such duties and authority consistent with his position as may be assigned from time to time by the President and Chief Executive Officer of the Company. The Employee shall report to, and be subject to the supervision of, the President and Chief Executive Officer. The Employee agrees to devote his entire business time to the business and interests of the Company during the Employment Period provided, however, that the Employee may serve on up to two Boards of Directors (whether for-profit or not-for-profit) as long as such activities do not, alone or in the aggregate, materially interfere with the performance of the Employee’s duties under this Agreement, as determined in good faith by the President and Chief Executive Officer of the Company and do not otherwise violate any restrictive covenants applicable to the Employee or any other written agreement between the Company and the Employee. Employee shall be expected to divide his work time between North Carolina and Company headquarters in Lexington, Massachusetts.

(b)    The Employee agrees to abide by the rules, regulations, instructions, personnel practices and policies of the Company and any changes therein which may be adopted from time to time by the Company.

3.    Compensation and Benefits.

3.1    Salary. During the Employment Period, the Company shall pay the Employee, in periodic installments in accordance with the Company’s customary payroll practices, a base salary of $38,750 per bi-weekly pay period (based upon 26 bi-weekly pay periods per annum, equal to $465,000 per annum. Such salary shall be subject to annual review by the Board of Directors of the Company (the “Board”) and/or the Compensation Committee of the Board (the “Compensation Committee”).

3.2    Equity Compensation. The Board or the Compensation Committee may award stock options or other equity compensation to the Employee from time to time in their sole discretion. The Employee may be eligible for an annual performance equity-based award in connection with the Company’s annual performance equity award cycle.

3.3    Bonus; Cash Incentives.

(a)    The Compensation Committee has the authority to award discretionary annual cash bonuses to the executive officers of the Company, including the Employee. Any bonus awarded shall be based on the achievement of specific objectives and other factors established by the Board or the Compensation Committee. Such bonus (if any) will be paid in the form of cash or capital stock, as determined by the Compensation Committee. Upon the determination of the Compensation Committee, acting in its sole discretion, the Employee may be entitled to receive an annual bonus. The target bonus amount for which the Employee shall be eligible is forty percent (40%) of his base salary.

(b)    Any bonus or cash incentive awarded to Employee will be paid on or before March 15 of the calendar year immediately following the year for which the bonus or cash incentive was earned.

3.4    Fringe Benefits. The Employee shall be entitled to participate in all medical and other benefit programs that the Company establishes and makes available to its employees, if any, to the extent that the Employee’s position, tenure, salary, age, health, and other qualifications make him eligible to participate. This comprehensive program currently covers medical and dental benefits, life and disability insurances, and a Section 125 Plan. The Employee will also be eligible to participate in the Company’s 401(k) Plan. The Employee shall be entitled to three weeks’ paid vacation per year subject to the Company’s policies for accrual and use.

3.5    Reimbursement of Expenses. The Company shall reimburse the Employee for all reasonable travel, entertainment and other expenses incurred or paid by the Employee in connection with, or related to, the performance of his duties, responsibilities or services under this Agreement, upon presentation by the Employee of documentation, expense statements, receipts, vouchers and/or such other supporting information as the Company may request, provided, however, that the maximum amount available for such travel, entertainment and other expenses may be fixed in advance by the Company.

3.6    Withholding. All salary, bonus, severance, and other compensation payable to the Employee shall be subject to applicable withholdings.

4.    Termination of Employment.

(a)    The Company has the right to terminate the Employee’s employment under this Agreement, by notice to the Employee in writing (i) for Cause (as defined below), (ii) without Cause for any or no reason, or (iii) due to the Disability (as defined below) of the Employee. Any such termination shall be effective upon the date of such notice to the Employee, or such other date as may be specified in such notice, in the case of termination for Cause or termination due to Disability, and upon 30 days’ prior written notice to the Employee in the case of termination without Cause for any or no reason.

(b)    Employee’s employment under this Agreement shall terminate immediately upon the Employee’s death.

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(c)    The Employee shall have the right to terminate his employment under this Agreement (i) for any reason or no reason upon 30 days’ prior written notice to the Company or (ii) for Good Reason (as defined below).

(d)    As used in this Agreement, the terms below shall have the following meanings:

(i)    “Cause” means (a) a good faith finding by the Company of the Employee’s failure or refusal to substantially perform his duties or the Employee’s continued neglect to perform such duties to the full extent of his abilities for reasons other than death, physical or mental incapacity, (b) a good faith finding by the Company of the Employee’s failure to perform his duties as assigned to him by the Board, or the President and Chief Executive Officer of the Company, (c) a good faith finding by the Company of dishonesty, gross negligence, or misconduct, (d) conviction or the entry of a pleading of guilty or nolo contendere to any crime or felony, or (e) any breach or threatened breach of any confidentiality, non-solicitation, or inventions agreement with the Company. For purposes of determining “Cause” during the 12 months following the consummation of a Change in Control Event, “Cause” shall instead be determined as provided in Section 10(c)(1)(C) of the Company’s Fourth Amended and Restated 2010 Stock Incentive Plan, as amended or replaced from time to time, provided that this Agreement’s definition shall apply if no such definition appears in the then current equity plan.

(ii)    “Good Reason” shall mean (a) any material diminution in the Employee’s authority, duties or responsibilities (b) any material reduction in his annual base salary; (c) any material breach by the Company of this Agreement; or (d) any requirement by the Company or of any person in control of the Company that the location at which the Employee performs his principal duties for the Company be changed to a new location that is more than 40 miles from the current principal location of the Company or that Employee no longer be allowed to divide his work time between North Carolina and the current principal location of the Company, provided that (i) the Employee provides the Company with notice of the condition described above within 90 days after the initial existence of the condition; (ii) such condition is not remedied by the Company within 30 days after receiving the notice and (iii) the Employee separates from service with the Company no later than 30 days following the last day of the cure period in clause (ii).

(iii)    “Change in Control Event” shall mean:

(A)    The acquisition by an individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act) (a “Person”) of beneficial ownership of any capital stock of the Company if, after such acquisition, such Person beneficially owns (within the meaning of Rule 13d-3 promulgated under the Exchange Act) 50% or more of either (x) the then-outstanding shares of common stock of the Company (the “Outstanding Company Common Stock”) or (y) the combined voting power of the then-outstanding securities of the Company entitled to vote generally in the election of directors (the “Outstanding Company Voting Securities”); provided, however, that for purposes of this subsection (i), the following acquisitions shall not constitute a Change in Control Event: (1) any acquisition directly from the Company (excluding an acquisition pursuant to the exercise, conversion or exchange of any

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security exercisable for, convertible into or exchangeable for common stock or voting securities of the Company, unless the Person exercising, converting or exchanging such security acquired such security directly from the Company or an underwriter or agent of the Company), (2) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or any corporation controlled by the Company, or (3) any acquisition by any entity pursuant to a Business Combination (as defined below) which complies with clauses (x) and (y) of subsection (C) of this definition; or

(B)    Such time as the Continuing Directors (as defined below) do not constitute a majority of the Board (or, if applicable, the Board of Directors of a successor to the Company), where the term “Continuing Director” means at any date a member of the Board (x) who was a member of the Board on the date of the initial adoption of this Agreement by the Board or (y) who was nominated or elected subsequent to such date by at least a majority of the directors who were Continuing Directors at the time of such nomination or election or whose election to the Board was recommended or endorsed by at least a majority of the directors who were Continuing Directors at the time of such nomination or election; or

(C)    The consummation of a merger, consolidation, reorganization, recapitalization or share exchange involving the Company or a sale or other disposition of all or substantially all of the assets of the Company (a “Business Combination”), unless, immediately following such Business Combination, each of the following two conditions is satisfied: (x) all or substantially all of the individuals and entities who were the beneficial owners of the Outstanding Company Common Stock and Outstanding Company Voting Securities immediately prior to such Business Combination beneficially own, directly or indirectly, more than 50% of the then-outstanding shares of common stock or other common equity and the combined voting power of the then-outstanding securities entitled to vote generally in the election of directors, respectively, of the resulting or acquiring corporation or other form of entity in such Business Combination (which shall include, without limitation, a corporation which as a result of such transaction owns the Company or substantially all of the Company’s assets either directly or through one or more subsidiaries) (such resulting or acquiring corporation or entity is referred to herein as the “Acquiring Corporation”) in substantially the same proportions as their ownership of the Outstanding Company Common Stock and Outstanding Company Voting Securities, respectively, immediately prior to such Business Combination and (y) no Person (excluding the Acquiring Corporation or any employee benefit plan (or related trust) maintained or sponsored by the Company or by the Acquiring Corporation) beneficially owns, directly or indirectly, 50% or more of the then-outstanding shares of common stock of the Acquiring Corporation, or of the combined voting power of the then-outstanding securities of such corporation entitled to vote generally in the election of directors (except to the extent that such ownership existed prior to the Business Combination).

Notwithstanding the foregoing, where required to avoid extra taxation under Section 409A, a Change in Control must also satisfy the requirements of Treas. Reg. Section 1.409A-3(a)(5).

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(iv)    “Disability” shall be deemed to have occurred when the Employee shall have been unable to perform his duties by reason of illness or incapacity for a period of 120 consecutive days in any period of 52 consecutive weeks, as determined in good faith by the Board in accordance with applicable law.

5.    Compensation upon Termination.

(a)    In the event the Employee’s employment is terminated by the Company for Cause, by the Employee without Good Reason or due to the death or Disability of the Employee, the Company shall pay to the Employee (i) any earned but unpaid base salary and, to the extent consistent with general Company policy or applicable law, accrued but unused vacation/paid time off through and including the date the Employee’s employment with the Company ends, to be paid in accordance with the Company’s regular payroll practices and with applicable law but no later than the next regularly scheduled pay period, (ii) unreimbursed business expenses in accordance with the Company’s policies for which expenses the Employee has provided appropriate documentation, to be paid in accordance with Section 14.2, and (iii) any amounts or benefits to which the Employee is then entitled under the terms of the benefit plans (other than severance) then sponsored by the Company in accordance with their terms (and not accelerated to the extent acceleration does not satisfy Section 409A as defined below)). Medical/dental insurance as an Employee of the Company will cease upon the date employment ends (or such later date as the insurance policies provide), and the Employee will be eligible for continuation of such coverage pursuant to COBRA at his expense except as provided below (or prohibited under COBRA).

(b)    In the event the Employee’s employment terminates as a result of a termination by the Employee for Good Reason, or a termination by the Company without Cause (except for a termination covered by 5(c)), in addition to the compensation and benefits described in Section 5(a), (i) the Employee shall receive payments equal to nine months of the Employee’s then base salary ratably over a period of nine months in accordance with the Company’s then current payroll policies and practices, and a payment equal in amount to his target bonus for the year of termination, pro-rated to reflect days elapsed from the beginning of the bonus year to the date of termination over 365 and paid on or around the date of the first installment of the salary-based severance, and (ii) the Company will pay any difference between the COBRA premium and the amount the Employee would otherwise be responsible for with respect to the medical and dental coverage elected for a period of nine months from the date such termination or as long as the Employee is eligible for and elects to be covered by COBRA, whichever period is shorter. At the end of this period, the Employee is eligible to continue coverage for the balance of the statutory period under COBRA, provided that the Employee pays the COBRA premium. Notwithstanding the foregoing, the Company may end the payment of premiums earlier (but not the Employee’s eligibility for COBRA) if it reasonably determines that applicable laws or regulations are reasonably likely to cause the payment of these premiums to trigger taxes or penalties on the Company or other participants or, to the extent the Employee would be taxed on more than the amount of the premiums, to the Employee.

(c)    In the event that, within 12 months following a Change in Control Event, the Employee’s employment terminates as a result of a termination by the Employee for Good Reason, or a termination by the Company or its successor without Cause, in addition to the compensation and benefits described in Section 5(a), the Employee shall receive (i) one times the sum of (x) the Employee’s then base salary (or if the base salary was reduced within 12 months following a Change in Control Event from the level in

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effect immediately before the consummation of that event, the level before such reduction) and (y) an amount equal to the full target bonus for the year of termination, such sum to paid ratably over a period of 12 months in accordance with the Company’s then current payroll policies and practices and (ii) an amount equal to a portion of the same year’s target bonus, pro-rated to reflect days elapsed from the beginning of the bonus year to the date of termination over 365, with the payment in clause (ii) to be made on or around the date of the first installment of the payments under clause (i). If severance is due under the proceeding sentence, the Company will also pay any difference between the COBRA premium and the amount the Employee would otherwise be responsible for with respect to the medical and dental coverage elected for a period of 12 months from the date of such termination or as long as the Employee is eligible for and elects to be covered by COBRA, whichever period is shorter. At the end of this period, the Employee is eligible to continue coverage for the balance of the statutory period under COBRA, provided that the Employee pays the COBRA premium. Notwithstanding the foregoing, the Company may end the payment of premiums earlier (but not the Employee’s eligibility for COBRA) if it reasonably determines that applicable laws or regulations are reasonably likely to cause the payment of these premiums to trigger taxes or penalties on the Company or other participants or, to the extent the Employee would be taxed on more than the amount of the premiums, to the Employee. The benefits provided under this Section 5(c) shall be in lieu of any benefits to which the Employee would have otherwise been entitled pursuant to Section 5(b) of this Agreement.

(d)    The receipt of any severance benefits provided for under this Agreement or otherwise shall be dependent upon the Employee’s delivery to the Company of an effective general release of claims in a form provided by the Company. Such release must be delivered and become irrevocable within 60 days (or such shorter period as the Company may specify at the time) of the date of the Employee’s termination of employment. Payment of the benefits shall be made or commence no later than the first payroll period following the date on which the release becomes irrevocable. Notwithstanding the foregoing, if the 60th day following the termination of employment occurs in the calendar year following the year of the Employee’s termination of employment then the severance payments shall not be made or commence prior to January 1 of the year following such termination of employment, and in any event, payment of benefits under this subparagraph shall be subject to the provisions of Section 14 to the extent applicable.

(e)    The benefits provided for the Employee under this Agreement shall be the sole payments and benefits for which the Employee shall be eligible at the conclusion of his employment with the Company for any reason (other than as provided under the terms of any equity compensation plans or awards) and shall supersede any and all prior agreements or arrangements for post-termination benefits or severance.

6.    Notices. All notices, instructions, demands, claims, requests, and other communications given hereunder or in connection herewith shall be in writing. Any such communication shall be sent either (a) by registered or certified mail, return receipt requested, postage prepaid, or (b) via a reputable nationwide overnight courier service, in each case to the address set forth below. Any such communication shall be deemed to have been delivered two business days after it is sent by registered or certified mail, return receipt requested, postage prepaid, or one business day after it is sent via a reputable nationwide overnight courier service.

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To the Company:	Curis, Inc. 128 Spring Street – Building C, Suite 500 Lexington, MA 02421 Attention: Chief Executive Officer
To the Employee:	The Employee’s home address as reflected on the Company’s personnel records

Either party hereto may give any notice, instruction, demand, claim, request, or other communication hereunder using any other means (including personal delivery, expedited courier, messenger service, ordinary mail or electronic mail), but no such communication shall be deemed to have been duly given unless and until it actually is received by the party for which it is intended. Either party hereto may change the address to which notices, instructions, demands, claims, requests and other communications hereunder are to be delivered by giving the other party hereto notice in the manner set forth in this Section 6.

7.    Entire Agreement. This Agreement supersedes all prior agreements, whether oral or written, by any officer, employee, or representative of any party hereto in respect of the subject matter contained herein; and any prior agreement of the parties hereto in respect of the subject matter contained herein is hereby terminated and cancelled, other than the Inventions, Non-Disclosure and Non-Competition Agreement by and between the Employee and the Company.

8.    Amendment. This Agreement may be amended or modified only by a written instrument executed by both the Company and the Employee.

9.    Governing Law. Except as set forth in Section 13.14, the Agreement shall be governed by and construed in accordance with the laws of the Commonwealth of Massachusetts without giving effect to principles of conflicts of laws. Except as set forth in Section 13.16, any action, suit, or other legal proceeding which is commenced to resolve any matter arising under or relating to any provision of the Agreement shall be commenced only in a court of the Commonwealth of Massachusetts (or, if appropriate, a federal court located within Massachusetts), and the Company and the Employee each consents to the jurisdiction of such a court.

10.    Successors and Assigns. The Company shall require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business or assets of the Company expressly to assume and agree to perform the Agreement to the same extent that the Company would be required to perform it if no such succession had taken place. As used in the Agreement, “Company” shall mean the Company as defined above and any successor to its business or assets as aforesaid which assumes and agrees to perform the Agreement, by operation of law or otherwise.

11.    Miscellaneous.

11.1    No delay or omission by the Company in exercising any right under this Agreement shall operate as a waiver of that or any other right. A waiver or consent given by the Company on any one occasion shall be effective only in that instance and shall not be construed as a bar or waiver of any right on any other occasion.

11.2    The captions of the sections of this Agreement are for convenience of reference only and in no way define, limit or affect the scope or substance of any section of this Agreement.

11.3    In case any provision of this Agreement shall be invalid, illegal, or otherwise unenforceable, the validity, legality and enforceability of the remaining provisions shall in no way be affected or impaired thereby.

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12.    No Duty to Seek Employment. The Employee and the Company acknowledge and agree that nothing contained in this Agreement shall be construed as requiring the Employee to seek or accept alternative or replacement employment in the event of his termination of employment by the Company for any reason, and no payment or benefit payable hereunder shall be conditioned on the Employee’s seeking or accepting such alternative or replacement employment.

13.    Indemnification. Until the later of (1) six years after the date that the Employee shall have ceased to serve as an employee or officer of the Company or, at the request of the Company, as a director, officer, partner, trustee, member, employee or agent of another corporation, partnership, joint venture, trust, limited liability company or other enterprise or (2) the final termination of all Proceedings (as defined below) pending on the date set forth in clause (1) in respect of which the Employee is granted rights of indemnification or advancement of Expenses (as defined below) hereunder and of any proceeding commenced by the Employee pursuant to Section 13.8 of this Agreement relating thereto, the Company shall provide indemnification to the Employee as follows:

13.1    Indemnification in Third-Party Proceedings. The Company shall indemnify the Employee in accordance with the provisions of this Section 13.1 if the Employee was or is a party to or threatened to be made a party to or otherwise involved in any Proceeding (other than a Proceeding by or in the right of the Company to procure a judgment in its favor) by reason of the Employee’s Corporate Status or by reason of any action alleged to have been taken or omitted in connection therewith, against all Expenses, judgments, fines, penalties and amounts paid in settlement actually and reasonably incurred by or on behalf of the Employee in connection with such Proceeding, if the Employee acted in good faith and in a manner which the Employee reasonably believed to be in, or not opposed to, the best interests of the Company and, with respect to any criminal Proceeding, had no reasonable cause to believe that his conduct was unlawful. The termination of any Proceeding by judgment, order, settlement, conviction or upon a plea of guilty or nolo contendere or its equivalent, shall not, of itself, create a presumption that the Employee did not act in good faith and in a manner which the Employee reasonably believed to be in, or not opposed to, the best interests of the Company, and, with respect to any criminal Proceeding, had reasonable cause to believe that his conduct was unlawful.

13.2    Indemnification in Proceedings by or in the Right of the Company. The Company shall indemnify the Employee in accordance with the provisions of this Section 13.2 if the Employee was or is a party to or threatened to be made a party to or otherwise involved in any Proceeding by or in the right of the Company to procure a judgment in its favor by reason of the Employee’s Corporate Status (as defined below) or by reason of any action alleged to have been taken or omitted in connection therewith, against all Expenses and, to the extent permitted by law, amounts paid in settlement actually and reasonably incurred by or on behalf of the Employee in connection with such Proceeding, if the Employee acted in good faith and in a manner which the Employee reasonably believed to be in, or not opposed to, the best interests of the Company, except that no indemnification shall be made under this Section 13.2 in respect of any claim, issue, or matter as to which the Employee shall have been adjudged to be liable to the Company, unless, and only to the extent, that the Court of Chancery of Delaware or the court in which such action or suit was brought shall determine upon application that, despite the adjudication of such liability but in view of all the circumstances of the case, the Employee is fairly and reasonably entitled to indemnity for such Expenses as the Court of Chancery or such other court shall deem proper.

13.3    Exceptions to Right of Indemnification. Notwithstanding anything to the contrary in this Agreement, except as set forth in Section 13.8, the Company shall not indemnify the Employee in connection with a Proceeding (or part thereof) initiated by the Employee unless the initiation thereof was approved by the Board. Notwithstanding anything to the contrary in this Agreement, the Company shall not indemnify the Employee to the extent the Employee is reimbursed from

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the proceeds of insurance, and in the event the Company makes any indemnification payments to the Employee and the Employee is subsequently reimbursed from the proceeds of insurance, the Employee shall promptly refund such indemnification payments to the Company to the extent of such insurance reimbursement.

13.4    Indemnification of Expenses of Successful Party. Notwithstanding any other provision of this Agreement, to the extent that the Employee has been successful, on the merits or otherwise, in defense of any Proceeding or in defense of any claim, issue or matter therein, the Employee shall be indemnified against all Expenses incurred by or on behalf of Employee in connection therewith. Without limiting the foregoing, if any Proceeding or any claim, issue or matter therein is disposed of, on the merits or otherwise (including a disposition without prejudice), without (i) the disposition being adverse to the Employee, (ii) an adjudication that the Employee was liable to the Company, (iii) a plea of guilty or nolo contendere by the Employee, (iv) an adjudication that Employee did not act in good faith and in a manner the Employee reasonably believed to be in or not opposed to the best interests of the Company, and (v) with respect to any criminal proceeding, an adjudication that the Employee had reasonable cause to believe his conduct was unlawful, the Employee shall be considered for the purposes hereof to have been wholly successful with respect thereto.

13.5    Notification and Defense of Claim. As a condition precedent to the Employee’s right to be indemnified, the Employee must notify the Company in writing as soon as practicable of any Proceeding for which indemnity will or could be sought. With respect to any Proceeding of which the Company is so notified, the Company will be entitled to participate therein at its own expense and/or to assume the defense thereof at its own expense, with legal counsel reasonably acceptable to the Employee. After notice from the Company to the Employee of its election so to assume such defense, the Company shall not be liable to the Employee for any legal or other expenses subsequently incurred by the Employee in connection with such Proceeding, other than as provided below in this Section 13.5. The Employee shall have the right to employ his own counsel in connection with such Proceeding, but the fees and expenses of such counsel incurred after notice from the Company of its assumption of the defense thereof shall be at the expense of the Employee unless (i) the employment of counsel by the Employee has been authorized by the Company, (ii) counsel to the Employee shall have reasonably concluded that there may be a conflict of interest or position on any significant issue between the Company and the Employee in the conduct of the defense of such Proceeding or (iii) the Company shall not in fact have employed counsel to assume the defense of such Proceeding, in each of which cases the fees and expenses of counsel for the Employee shall be at the expense of the Company, except as otherwise expressly provided by this Agreement. The Company shall not be entitled, without the consent of the Employee, to assume the defense of any claim brought by or in the right of the Company or as to which counsel for the Employee shall have reasonably made the conclusion provided for in clause (ii) above. The Company shall not be required to indemnify the Employee under this Agreement for any amounts paid in settlement of any Proceeding effected without its written consent. The Company shall not settle any Proceeding in any manner which would impose any penalty or limitation on the Employee without the Employee’s written consent. Neither the Company nor the Employee will unreasonably withhold or delay their consent to any proposed settlement.

13.6    Advancement of Expenses. Subject to the provisions of Section 13.7 of this Agreement, in the event that the Company does not assume the defense pursuant to Section 13.5 of this Agreement of any Proceeding of which the Company receives notice under this Agreement, any Expenses incurred by or on behalf of the Employee in defending such Proceeding shall be paid by the Company in advance of the final disposition of such Proceeding; provided, however, that the payment of such Expenses incurred by or on behalf of the Employee in advance of the final disposition of such Proceeding shall be made only upon receipt of an undertaking by or on behalf of the Employee to repay all amounts so advanced in the event that it shall ultimately be

9

determined that the Employee is not entitled to be indemnified by the Company as authorized in this Agreement. Such undertaking shall be accepted without reference to the financial ability of the Employee to make repayment.

13.7    Procedure for Indemnification. In order to obtain indemnification or advancement of Expenses pursuant to Sections 13.1, 13.2, 13.4 or 13.6 of this Agreement, the Employee shall submit to the Company a written request. Any such indemnification or advancement of Expenses shall be made promptly, and in any event within 30 days after receipt by the Company of the written request of the Employee, unless with respect to requests under Sections 13.1, 13.2 or 13.6 the Company determines within such 30-day period that the Employee did not meet the applicable standard of conduct set forth in Section 13.1 or 13.2, as the case may be. Such determination, and any determination that advanced Expenses must be repaid to the Company, shall be made in each instance (i) by a majority vote of the directors of the Company consisting of persons who are not at that time parties to the Proceeding (“disinterested directors”), whether or not a quorum, (ii) by a committee of disinterested directors designated by a majority vote of disinterested directors, whether or not a quorum, (iii) if there are no disinterested directors, or if the disinterested directors so direct, by independent legal counsel (who may, to the extent permitted by applicable law, be regular legal counsel to the Company) in a written opinion, or (iv) by the stockholders of the Company.

13.8    Remedies. The right to indemnification or advancement of Expenses as provided by this Agreement shall be enforceable by the Employee in any court of competent jurisdiction. Unless otherwise required by law, the burden of proving that indemnification is not appropriate shall be on the Company. Neither the failure of the Company to have made a determination prior to the commencement of such action that indemnification is proper in the circumstances because the Employee has met the applicable standard of conduct, nor an actual determination by the Company pursuant to Section 13.7 that the Employee has not met such applicable standard of conduct, shall be a defense to the action or create a presumption that the Employee has not met the applicable standard of conduct. The Employee’s expenses (of the type described in the definition of “Expenses” below) reasonably incurred in connection with successfully establishing the Employee’s right to indemnification, in whole or in part, in any such Proceeding shall also be indemnified by the Company.

13.9    Partial Indemnification. If the Employee is entitled under any provision of this Agreement to indemnification by the Company for some or a portion of the Expenses, judgments, fines, penalties or amounts paid in settlement actually and reasonably incurred by or on behalf of the Employee in connection with any Proceeding but not, however, for the total amount thereof, the Company shall nevertheless indemnify the Employee for the portion of such Expenses, judgments, fines, penalties or amounts paid in settlement to which the Employee is entitled.

13.10    Subrogation. In the event of any payment under this Agreement, the Company shall be subrogated to the extent of such payment to all of the rights of recovery of the Employee, who shall execute all papers required and take all action necessary to secure such rights, including execution of such documents as are necessary to enable the Company to bring suit to enforce such rights.

13.11    Indemnification Hereunder Not Exclusive. The indemnification and advancement of Expenses provided by this Agreement shall not be deemed exclusive of any other rights to which the Employee may be entitled under the Company’s Certification of Incorporation, the By-Laws, any other agreement, any vote of stockholders or disinterested directors, the General Corporation Law of Delaware, any other law (common or statutory), or otherwise, both as to action in the Employee’s official capacity and as to action in another capacity while holding office for the Company. Nothing contained in this Agreement shall be deemed to prohibit the Company from

10

purchasing and maintaining insurance, at its expense, to protect itself or the Employee against any expense, liability or loss incurred by it or the Employee in any such capacity, or arising out of the Employee’s status as such, whether or not the Employee would be indemnified against such expense, liability or loss under this Agreement; provided that the Company shall not be liable under this Agreement to make any payment of amounts otherwise indemnifiable hereunder if and to the extent that the Employee has otherwise actually received such payment under any insurance policy, contract, agreement or otherwise.

13.12    Definitions. As used in this Section 13:

(a)    The term “Proceeding” shall include any threatened, pending or completed action, suit, arbitration, alternative dispute resolution proceeding, administrative hearing or other proceeding, whether brought by or in the right of the Company or otherwise and whether of a civil, criminal, administrative or investigative nature, and any appeal therefrom.

(b)    The term “Corporate Status” shall mean the status of a person who is or was a director or officer of the Company, or is or was serving, or has agreed to serve, at the request of the Company, as a director, officer, partner, trustee, member, employee or agent of another corporation, partnership, joint venture, trust, limited liability company or other enterprise.

(c)    The term “Expenses” shall include, without limitation, attorneys’ fees, retainers, court costs, transcript costs, fees and expenses of experts, travel expenses, duplicating costs, printing and binding costs, telephone charges, postage, delivery service fees and other disbursements or expenses of the types customarily incurred in connection with investigations, judicial or administrative proceedings or appeals, but shall not include the amount of judgments, fines or penalties against the Employee or amounts paid in settlement in connection with such matters.

(d)    References to “other enterprise” shall include employee benefit plans; references to “fines” shall include any excise tax assessed with respect to any employee benefit plan; references to “serving at the request of the Company” shall include any service as a director, officer, employee or agent of the Company which imposes duties on, or involves services by, such director, officer, employee, or agent with respect to an employee benefit plan, its participants, or beneficiaries; and a person who acted in good faith and in a manner such person reasonably believed to be in the interests of the participants and beneficiaries of an employee benefit plan shall be deemed to have acted in a manner “not opposed to the best interests of the Company” as referred to in this Agreement.

13.13    Savings Clause. If this Section 13 or any portion thereof shall be invalidated on any ground by any court of competent jurisdiction, then the Company shall nevertheless indemnify the Employee as to Expenses, judgments, fines, penalties and amounts paid in settlement with respect to any Proceeding to the full extent permitted by any applicable portion of this Section 13 that shall not have been invalidated and to the fullest extent permitted by applicable law.

13.14    Applicable Law. Notwithstanding anything herein to the contrary, this Section 13 shall be governed by, and construed and enforced in accordance with, the laws of the State of Delaware. The Employee may elect to have the right to indemnification or reimbursement or advancement of Expenses interpreted on the basis of the applicable law in effect at the time of the occurrence of the event or events giving rise to the applicable Proceeding, to the extent permitted by law, or on the basis of the applicable law in effect at the time such indemnification or reimbursement or advancement of Expenses is sought. Such election shall be made, by a

11

notice in writing to the Company, at the time indemnification or reimbursement or advancement of Expenses is sought; provided, however, that if no such notice is given, and if the General Corporation Law of Delaware is amended, or other Delaware law is enacted, to permit further indemnification of the directors and officers, then the Employee shall be indemnified to the fullest extent permitted under the General Corporation Law, as so amended, or by such other Delaware law, as so enacted.

13.15    Enforcement. The Company expressly confirms and agrees that it has entered into this Agreement in order to induce the Employee to serve as an officer of the Company, among other things, and acknowledges that the Employee is relying upon this Agreement in continuing in such capacity.

13.16    Consent to Suit. In the case of any dispute under or in connection with this Section 13, the Employee may only bring suit against the Company in the Court of Chancery of the State of Delaware. The Employee hereby consents to the exclusive jurisdiction and venue of the courts of the State of Delaware, and the Employee hereby waives any claim the Employee may have at any time as to forum non conveniens with respect to such venue. The Company shall have the right to institute any legal action arising out of or relating to this Section 13 in any court of competent jurisdiction. Any judgment entered against either of the parties in any proceeding hereunder may be entered and enforced by any court of competent jurisdiction.

14.    Section 409A of the Internal Revenue Code.

14.1    The following rules shall apply with respect to distribution of the payments and benefits, if any, to be provided to the Employee under Section 5:

(a)    It is intended that each installment of the payments and benefits provided under Section 5 shall be treated as a separate “payment” for purposes of Section 409A. Neither the Company nor the Employee shall have the right to accelerate or defer the delivery of any such payments or benefits except to the extent specifically permitted or required by Section 409A;

(b)    If, as of the date of the “separation from service” of the Employee from the Company, the Employee is not a “specified employee” (each within the meaning of Section 409A), then each installment of the payments and benefits shall be made on the dates and terms set forth in Section 5; and

(c)    If, as of the date of the “separation from service” of the Employee from the Company, the Employee is a “specified employee” (each, for purposes of this Agreement, within the meaning of Section 409A), as determined by the Company in accordance with its procedures, by which determination the Employee hereby agrees that he is bound, then:

(i)    Each installment of the payments and benefits due under Section 5 that are paid within the Short-Term Deferral Period (as hereinafter defined) shall be treated as a short-term deferral within the meaning of Treasury Regulation Section 1.409A-1(b)(4) to the maximum extent permissible under Section 409A. For purposes of this Agreement, the “Short-Term Deferral Period” means the period ending on the later of the 15th day of the third month following the end of the Employee’s tax year in which the Employee’s separation from service occurs and the 15th day of the third month following the end of the Company’s tax year in which the Employee’s separation from service occurs;

12

(ii)    Each installment of the payments and benefits due under Section 5 that is not paid within the Short-Term Deferral Period and that would, absent this subsection, be paid within the six-month period following the “separation from service” of the Employee of the Company shall not be paid until the date that is six months and one day after such separation from service (or, if earlier, 10 days following the death of the Employee), with any such installments that are required to be delayed being accumulated during the six-month period and paid in a lump sum on the date that is six months and one day following the Employee’s separation from service (or, with respect to payment after death, as soon as reasonably practicable and within the time limits permitted by Section 409A), and any remaining payments will be paid on their original schedule and any subsequent installments, if any, being paid in accordance with the dates and terms set forth herein; provided, however, that the preceding provisions of this sentence shall not apply to any installment of payments and benefits if and to the maximum extent that that such installment is deemed to be paid under a separation pay plan that does not provide for a deferral of compensation by reason of the application of Treasury Regulation 1.409A-1(b)(9)(iii) (relating to separation pay upon an involuntary separation from service) or Treasury Regulation 1.409A-1(b)(9)(iv) (relating to reimbursements and certain other separation payments). Any installments that qualify for the exception under Treasury Regulation Section 1.409A-1(b)(9)(iii) must be paid no later than the last day of the second taxable year of the Employee following the taxable year of the Employee in which the separation from service occurs. A comparable six month delay will apply to any other payments and benefits received by Employee under other compensatory arrangements if and to the extent required for compliance with Section 409A.

(d)    The determination of whether and when the Employee’s separation from service from the Company has occurred shall be made and in a manner consistent with, and based on the presumptions set forth in, Treasury Regulation Section 1.409A-1(h). Solely for purposes of this subsection (d), “Company” shall include all persons with whom the Company would be considered a single employer under Section 414(b) and 414(c) of the Code.

14.2    All payments and benefits provided under this Agreement are intended to either comply with or be exempt from Section 409A and this Agreement shall be administered and construed accordingly. The Company makes no representations or warranty and shall have no liability to the Employee or any other person if any payments made under this Agreement are determined to constitute deferred compensation subject to Section 409A but not to satisfy the conditions of that section. All reimbursements and in-kind benefits provided under this Agreement shall be made or provided in accordance with the requirements of Section 409A to the extent that such reimbursements or in-kind benefits are subject to Section 409A, including, where applicable, the requirements that (i) any reimbursement is for expenses incurred during the Employee’s lifetime (or during a shorter period of time specified in this Agreement), (ii) the amount of expenses eligible for reimbursement during a calendar year may not affect the expenses eligible for reimbursement in any other calendar year, (iii) the reimbursement of an eligible expense will be made on or before the last day of the calendar year following the year in which the expense is incurred and (iv) the right to reimbursement is not subject to set off or liquidation or exchange for any other benefit.

15.    Parachute Treatment. Notwithstanding any other provision of this Agreement to the contrary, if payments made hereunder or otherwise are considered “excess parachute payments” under Section 280G of the Internal Revenue Code of 1986, as amended (the “Code”), then such excess parachute payments plus any other payments made by the Company and its affiliates that

13

the Employee is entitled to receive that are considered excess parachute payments shall be limited to the greatest amount that may be paid to the Employee under Section 280G of the Code without causing any loss of deduction to the Company under such Code Section, but only if, by reason of such reduction, the “Net After Tax Benefit” (as defined below) to the Employee shall exceed the net after tax benefit if such reduction was not made. “Net After Tax Benefit” for purposes of this Agreement shall mean the sum of (i) the total amounts payable to the Employee that would constitute an “excess parachute payment” within the meaning of Section 280G of the Code less (ii) the amount of federal, state and other income taxes payable with respect to the foregoing calculated at the maximum marginal tax rate for each year in which the foregoing shall be paid to the Employee (based upon the rate in effect for such year as set forth in the Code at the time of termination of employment or the applicable change in control), less (iii) the amount of excise taxes imposed with respect to the payments and benefits described above by Section 4999 of the Code. The determination of whether payments would be considered excess parachute payments and the calculation of all the amounts referred to in this section shall be made reasonably and in good faith by the parties, provided, that if the parties cannot agree, then such determination (and supporting calculations) shall be made by attorneys, accountants, or an executive compensation consulting firm each as selected by the Company at the expense of the Company (the “280G Service Providers”). Any determination by the 280G Service Providers made in good faith shall be binding upon the Company and the Employee.

16.    Counterparts. This Agreement may be executed in two counterparts, each of which shall be deemed to be an original, but all of which together shall constitute one and the same instrument.

Signatures on Following Page

14

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of May 1, 2023.

CURIS, INC.

By: /s/ James E. Dentzer

Name: James E. Dentzer
Title: President and Chief Executive Officer

Date: May 1, 2023

EMPLOYEE

By: /s/ Jonathan B. Zung

    Jonathan B. Zung

Date: April 10, 2023 _____________________________

15

EX-31.1

EXHIBIT 31.1

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER PURSUANT TO RULE 13a-14(a) OF THE EXCHANGE ACT

I, James E. Dentzer, certify that:

1.I have reviewed this Quarterly Report on Form 10-Q of Curis, Inc.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:	August 3, 2023	/S/ JAMES E. DENTZER
		James E. Dentzer
		President and Chief Executive Officer
		(Principal Executive Officer)

EX-31.2

EXHIBIT 31.2

CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER PURSUANT TO RULE 13a-14(a) OF THE EXCHANGE ACT

I, Diantha Duvall, certify that:

1.I have reviewed this Quarterly Report on Form 10-Q of Curis, Inc.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:	August 3, 2023	/S/ DIANTHA DUVALL
		Diantha Duvall
		Chief Financial Officer
		(Principal Financial Officer)

EX-32.1

EXHIBIT 32.1

CERTIFICATION OF THE PRINCIPAL EXECUTIVE OFFICER PURSUANT TO RULE 13a-14(b) OF THE EXCHANGE ACT AND 18 U.S.C. SECTION 1350

In connection with the Quarterly Report on Form 10-Q of Curis, Inc. (the “Company”) for the period ended June 30, 2023 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned, James E. Dentzer, President and Chief Executive Officer of the Company, hereby certifies, pursuant to 18 U.S.C. Section 1350, that:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date:	August 3, 2023	/S/ JAMES E. DENTZER
		James E. Dentzer
		President and Chief Executive Officer
		(Principal Executive Officer)

EX-32.2

EXHIBIT 32.2

CERTIFICATION OF THE PRINCIPAL FINANCIAL OFFICER PURSUANT TO RULE 13a-14(b) OF THE EXCHANGE ACT AND 18 U.S.C. SECTION 1350

In connection with the Quarterly Report on Form 10-Q of Curis, Inc. (the “Company”) for the period ended June 30, 2023 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned, Diantha Duvall, Chief Financial Officer of the Company, hereby certifies, pursuant to 18 U.S.C. Section 1350, that:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date:	August 3, 2023	/S/ DIANTHA DUVALL
		Diantha Duvall
		Chief Financial Officer
		(Principal Financial Officer)

XML

Cover - shares	6 Months Ended
	Jun. 30, 2023	Jul. 27, 2023
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Jun. 30, 2023
Document Transition Report	false
Entity File Number	000-30347
Entity Registrant Name	CURIS, INC.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	04-3505116
Entity Address, Address Line One	128 Spring Street
Entity Address, Address Line Two	Building C - Suite 500
Entity Address, City or Town	Lexington
Entity Address, State or Province	MA
Entity Address, Postal Zip Code	02421
City Area Code	617
Local Phone Number	503-6500
Title of 12(b) Security	Common Stock, Par Value $0.01 per share
Trading Symbol	CRIS
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		117,704,554
Amendment Flag	false
Document Fiscal Year Focus	2023
Document Fiscal Period Focus	Q2
Entity Central Index Key	0001108205
Current Fiscal Year End Date	--12-31

XML

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Current assets:
Cash and cash equivalents	$ 19,822	$ 19,658
Short-term investments	43,665	65,965
Accounts receivable	2,386	2,975
Prepaid expenses and other current assets	1,978	3,521
Total current assets	67,851	92,119
Property and equipment, net	561	689
Restricted cash, long-term	635	635
Operating lease right-of-use asset	3,740	4,401
Other assets	2,539	2,022
Goodwill	8,982	8,982
Total assets	84,308	108,848
Current liabilities:
Accounts payable	2,686	3,193
Accrued liabilities	5,776	5,679
Current portion of operating lease liability	1,220	1,141
Total current liabilities	9,682	10,013
Long-term operating lease liability	2,164	2,800
Liability related to the sale of future royalties, net	46,238	49,483
Total liabilities	58,084	62,296
Stockholders’ equity:
Preferred stock, $0.01 par value—5,000,000 shares authorized, no shares issued and outstanding at June 30, 2023 and December 31, 2022	0	0
Common stock, $0.01 par value—227,812,500 shares authorized; 99,344,798 shares issued and outstanding at June 30, 2023; 227,812,500 shares authorized; 96,607,586 shares issued and outstanding at December 31, 2022	993	966
Additional paid-in capital	1,197,746	1,194,769
Accumulated deficit	(1,172,517)	(1,148,997)
Accumulated other comprehensive income (loss)	2	(186)
Total stockholders’ equity	26,224	46,552
Total liabilities and stockholders’ equity	$ 84,308	$ 108,848

XML

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares	Jun. 30, 2023	Dec. 31, 2022
Statement of Financial Position [Abstract]
Preferred stock par value (in dollars per share)	$ 0.01	$ 0.01
Preferred stock authorized (in shares)	5,000,000	5,000,000
Preferred stock issued (in shares)	0	0
Preferred stock outstanding (in shares)	0	0
Common stock par value (in dollars per share)	$ 0.01	$ 0.01
Common stock authorized (in shares)	227,812,500	227,812,500
Common stock issued (in shares)	99,344,798	96,607,586
Common stock outstanding (in shares)	99,344,798	96,607,586

XML

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Revenues, net:
Revenues, net	$ 2,197	$ 2,393	$ 4,494	$ 4,450
Costs and expenses:
Cost of royalties	74	42	98	124
Research and development	10,012	12,323	19,152	23,758
General and administrative	4,249	5,089	9,009	10,762
Total operating expenses	14,335	17,454	28,259	34,644
Loss from operations	(12,138)	(15,061)	(23,765)	(30,194)
Other income (expense):
Interest income	815	162	1,467	242
Expense related to the sale of future royalties	(638)	(1,041)	(1,222)	(2,097)
Total other income (expense)	177	(879)	245	(1,855)
Net loss	$ (11,961)	$ (15,940)	$ (23,520)	$ (32,049)
Net loss per common share (basic ) (in dollars per share)	$ (0.12)	$ (0.17)	$ (0.24)	$ (0.35)
Net loss per common share (diluted) (in dollars per share)	$ (0.12)	$ (0.17)	$ (0.24)	$ (0.35)
Weighted average common shares (basic) (in shares)	96,685,924	91,650,950	96,649,934	91,648,175
Weighted average common shares (diluted) (in shares)	96,685,924	91,650,950	96,649,934	91,648,175
Net loss	$ (11,961)	$ (15,940)	$ (23,520)	$ (32,049)
Other comprehensive income (loss):
Unrealized gain (loss) on marketable securities	(7)	(104)	188	(446)
Comprehensive loss	$ (11,968)	$ (16,044)	$ (23,332)	$ (32,495)

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CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) $ in Thousands	Total	Common Stock	Additional Paid-in Capital	Accumulated Deficit	Accumulated Other Comprehensive (Loss) Income
Beginning balance (in shares) at Dec. 31, 2021		91,645,369
Beginning balance at Dec. 31, 2021	$ 90,707	$ 916	$ 1,182,225	$ (1,092,325)	$ (109)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Stock-based compensation	1,718		1,718
Unrealized gain (loss) on marketable securities	(342)				(342)
Net loss	(16,109)			(16,109)
Ending balance (in shares) at Mar. 31, 2022		91,645,369
Ending balance at Mar. 31, 2022	75,974	$ 916	1,183,943	(1,108,434)	(451)
Beginning balance (in shares) at Dec. 31, 2021		91,645,369
Beginning balance at Dec. 31, 2021	90,707	$ 916	1,182,225	(1,092,325)	(109)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net loss	(32,049)
Ending balance (in shares) at Jun. 30, 2022		91,814,665
Ending balance at Jun. 30, 2022	62,045	$ 918	1,186,056	(1,124,374)	(555)
Beginning balance (in shares) at Mar. 31, 2022		91,645,369
Beginning balance at Mar. 31, 2022	75,974	$ 916	1,183,943	(1,108,434)	(451)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Stock-based compensation	1,966		1,966
Issuance of common stock under employee benefit plans, including restricted stock awards (in shares)		169,296
Issuance of common stock under employee benefit plans, including restricted stock awards	149	$ 2	147
Unrealized gain (loss) on marketable securities	(104)				(104)
Net loss	(15,940)			(15,940)
Ending balance (in shares) at Jun. 30, 2022		91,814,665
Ending balance at Jun. 30, 2022	$ 62,045	$ 918	1,186,056	(1,124,374)	(555)
Beginning balance (in shares) at Dec. 31, 2022	96,607,586	96,607,586
Beginning balance at Dec. 31, 2022	$ 46,552	$ 966	1,194,769	(1,148,997)	(186)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Stock-based compensation	1,395		1,395
Issuance of common stock under employee benefit plans, including restricted stock awards (in shares)		10,312
Issuance of common stock under employee benefit plans, including restricted stock awards	7		7
Unrealized gain (loss) on marketable securities	195				195
Net loss	(11,559)			(11,559)
Ending balance (in shares) at Mar. 31, 2023		96,617,898
Ending balance at Mar. 31, 2023	$ 36,590	$ 966	1,196,171	(1,160,556)	9
Beginning balance (in shares) at Dec. 31, 2022	96,607,586	96,607,586
Beginning balance at Dec. 31, 2022	$ 46,552	$ 966	1,194,769	(1,148,997)	(186)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net loss	$ (23,520)
Ending balance (in shares) at Jun. 30, 2023	99,344,798	99,344,798
Ending balance at Jun. 30, 2023	$ 26,224	$ 993	1,197,746	(1,172,517)	2
Beginning balance (in shares) at Mar. 31, 2023		96,617,898
Beginning balance at Mar. 31, 2023	36,590	$ 966	1,196,171	(1,160,556)	9
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Stock-based compensation	1,424		1,424
Issuance of common stock under employee benefit plans, including restricted stock awards (in shares)		2,726,900
Issuance of common stock under employee benefit plans, including restricted stock awards	178	$ 27	151
Unrealized gain (loss) on marketable securities	(7)				(7)
Net loss	$ (11,961)			(11,961)
Ending balance (in shares) at Jun. 30, 2023	99,344,798	99,344,798
Ending balance at Jun. 30, 2023	$ 26,224	$ 993	$ 1,197,746	$ (1,172,517)	$ 2

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022
Cash flows from operating activities:
Net loss	$ (23,520)	$ (32,049)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	128	80
Non-cash lease expense	662	529
Stock-based compensation expense	2,819	3,684
Non-cash expense related to the sale of future royalties	(202)	6
Net amortization of premiums and discounts on marketable securities	(602)	575
Changes in operating assets and liabilities:
Accounts receivable	589	829
Prepaid expenses and other assets	1,026	(536)
Accounts payable and accrued liabilities	(410)	(1,671)
Operating lease liability	(557)	(394)
Total adjustments	3,453	3,102
Net cash used in operating activities	(20,067)	(28,947)
Cash flows from investing activities:
Purchase of investments	(28,336)	(35,774)
Sales and maturities of investments	51,425	61,395
Purchases of property and equipment	0	(364)
Net cash provided by investing activities	23,089	25,257
Cash flows from financing activities:
Proceeds from issuance of common stock under employee benefit plans	185	149
Payment of liability of future royalties, net of imputed interest	(3,043)	(2,556)
Net cash used in financing activities	(2,858)	(2,407)
Net increase (decrease) in cash and cash equivalents and restricted cash	164	(6,097)
Cash and cash equivalents and restricted cash, beginning of period	20,293	40,740
Cash and cash equivalents and restricted cash, end of period	20,457	34,643
Supplemental cash flow data:
Issuance costs in accrued expenses and accounts payable	171	0
Cash paid for interest	1,424	2,091
Decrease in right-of-use assets and operating lease liabilities resulting from lease modification	$ 0	$ (191)

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Nature of Business

6 Months Ended

Jun. 30, 2023

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Nature of Business

Nature of Business

Curis, Inc. is a biotechnology company seeking to develop and commercialize innovative drug candidates to treat cancer. Throughout these Condensed Consolidated Financial Statements, Curis, Inc. and its wholly owned subsidiaries are collectively referred to as “the Company,” “Curis,” “we,” “us,” or “our.”

The Company conducts its research and development programs both internally and through strategic collaborations. The Company has prioritized its lead clinical stage drug candidate emavusertib, an orally available small molecule inhibitor of Interleukin-1 receptor associated kinase 4 (“IRAK4”).

The Company is party to a collaboration with Genentech Inc. (“Genentech”), a member of the Roche Group, under which Genentech and F. Hoffmann-La Roche Ltd (“Roche”) are commercializing Erivedge® (vismodegib), a first-in-class orally administered small molecule Hedgehog signaling pathway antagonist. Erivedge is approved for the treatment of advanced basal cell carcinoma (“BCC”).

The Company is party to an exclusive collaboration agreement with Aurigene Discovery Technologies Limited (“Aurigene”) for the discovery, development and commercialization of small molecule compounds in the areas of immuno-oncology and precision oncology.

The Company is subject to risks common to companies in the biotechnology industry as well as risks that are specific to the Company’s business, including, but not limited to: the Company’s ability to obtain adequate financing to fund its operations; the Company’s ability to advance and expand its research and development programs; the Company’s ability to execute on its overall business strategies; the Company’s ability to obtain and maintain necessary intellectual property protection; development by the Company’s competitors of new or better technological innovations; the Company’s ability to comply with regulatory requirements; the Company’s ability to obtain and maintain applicable regulatory approvals and commercialize any approved product candidates; the ability of the Company and its wholly owned subsidiary, Curis Royalty, LLC (“Curis Royalty”), to satisfy the terms of the royalty interest purchase agreement (the “Oberland Purchase Agreement”) with entities managed by Oberland Capital Management, LLC (the “Purchasers”), and Lind SA LLC (the “Agent”), as collateral agent for the Purchasers; and the Company’s ability to implement a reverse stock split and maintain its current listing on Nasdaq.

The Company’s future operating results will largely depend on the progress of drug candidates currently in its development pipeline and the magnitude of payments that it may receive and make under its current and potential future collaborations. The results of the Company’s operations have varied and will likely continue to vary significantly from year to year and quarter to quarter and depend on a number of factors, including, but not limited to the timing, outcome and cost of the Company’s preclinical studies and clinical trials for its drug candidates.

The Company will require substantial funds to maintain research and development programs and support operations. The Company has incurred losses and negative cash flows from operations since its inception. As of June 30, 2023, the Company had an accumulated deficit of $1.2 billion, and for the six months ended June 30, 2023, the Company incurred a net loss of $23.5 million and used $20.1 million of cash in operations. The Company expects to continue to generate operating losses in the foreseeable future. The Company anticipates that its $63.5 million of existing cash, cash equivalents and investments at June 30, 2023, and the net proceeds of approximately $13.9 million from the July Registered Direct discussed below, should be sufficient to fund operations for at least 12 months from the date of filing this Quarterly Report on Form 10-Q.

The Company’s ability to raise additional funds will depend, among other factors, on financial, economic and market conditions, many of which are outside of its control and it may be unable to raise financing when needed, or on terms favorable to the Company. If necessary funds are not available, the Company will have to delay, reduce the scope of, or eliminate some of its development programs, potentially delaying the time to market for or preventing the marketing of any of its product candidates.

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Summary of Significant Accounting Policies

6 Months Ended

Jun. 30, 2023

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Summary of Significant Accounting Policies

Summary of Significant Accounting Policies

(a)Basis of Presentation and Principles of Consolidation

The accompanying Condensed Consolidated Financial Statements have been prepared in accordance with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. These statements, however, are condensed and do not include all disclosures required by accounting principles generally accepted in the U.S. (“GAAP”) for complete financial statements and should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2022 as filed with the Securities and Exchange Commission (“SEC”) on March 13, 2023.

In the opinion of the management of the Company, the unaudited Condensed Consolidated Financial Statements contain all adjustments (all of which were considered normal and recurring) necessary for a fair statement of the Company’s financial position at June 30, 2023; the results of operations for the three and six-month period ended June 30, 2023 and 2022; stockholders' equity for the three and six-month period ended June 30, 2023 and 2022; and the cash flows for the six-month period ended June 30, 2023 and 2022. The Condensed Consolidated Balance Sheet at December 31, 2022 was derived from audited annual financial statements but does not contain all of the footnote disclosures from the annual financial statements.

(b)Use of Estimates and Assumptions

The preparation of the Company’s Condensed Consolidated Financial Statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts and disclosure of revenue, expenses and certain assets and liabilities at the balance sheet date. Such estimates include the performance obligations under the Company’s collaboration agreements; the collectability of receivables; the carrying value of goodwill; and the value of certain investments and liabilities. Actual results may differ from such estimates. These interim results are not necessarily indicative of results to be expected for a full year or subsequent interim periods.

(c) Cash Equivalents, Restricted Cash, and Investments

Cash equivalents consist of highly liquid investments purchased with original maturities of three months or less. All other investments are marketable securities.

The Company classified $0.6 million of its cash as restricted cash as of June 30, 2023 and December 31, 2022. These amounts represent the security deposit associated with the Company’s Lexington, Massachusetts headquarters.

The Company’s short-term investments are marketable debt securities with original maturities of greater than three months from the date of purchase, but less than twelve months from the balance sheet date. Marketable securities consist of commercial paper, corporate bonds and notes, and/or government obligations. All of the Company’s investments have been designated available-for-sale and are stated at fair value. Unrealized gains and losses on investments are included in accumulated other comprehensive income (loss) as a separate component of stockholders’ equity. Realized gains and losses, dividends and interest income are included in other income (expense) in the period during which the securities are sold. Any premium or discount arising at purchase is amortized and/or accreted to interest income.

(d)Leases

The Company determines if an arrangement is a lease at contract inception. The Company made an accounting policy election to not recognize leases with an initial term of 12 months or less within its Consolidated Balance Sheets and to recognize those lease payments on a straight-line basis in its Consolidated Statements of Operations and Comprehensive Loss over the lease term. Operating lease assets represent the Company’s right to use an underlying asset for the lease term and operating lease liabilities represent its obligation to make lease payments arising from the lease. Operating lease assets and liabilities are recognized at the commencement date of the lease based upon the present value of lease payments over the lease term. When determining the lease term, the Company includes options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option.

As the Company’s lease does not provide an implicit interest rate, the Company uses its incremental borrowing rate, which is based on rates that would be incurred to borrow on a collateralized basis over a term equal to the lease payments in a similar economic environment, in determining the present value of lease payments.

The lease payment used to determine the operating lease asset may include lease incentives, stated rent increases and was recognized as an operating lease right-of-use asset in the Condensed Consolidated Balance Sheets. The Company’s lease agreements may include both lease and non-lease components, which may be accounted for as a single lease component. Variable payments included in the lease agreement are expensed as incurred.

The Company’s operating lease is reflected in operating lease right-of-use asset and operating lease liability in the Condensed Consolidated Balance Sheets. Lease expense for lease payments is recognized on a straight-line basis over the lease term.

(e)Other Assets

Other assets consist of long-term prepayments and deposits.

(f)Revenue Recognition

The Company applies the revenue recognition guidance in accordance with Financial Accounting Standards Board (“FASB”) Codification Topic 606, Revenue from Contracts with Customers. Revenue is recognized when persuasive evidence of an arrangement exists, delivery has occurred and title has passed, the price is fixed or determinable, and collectability is reasonably assured.

The Company recognizes royalty revenues related to Genentech’s and Roche’s sales of Erivedge. For arrangements that include sales-based royalties, including milestone payments based on the level of sales, and where the license is deemed to be the predominant item to which the royalties relate, the Company recognizes revenue at the later of (i) when the related sales occur, or (ii) when the performance obligation to which some or all of the royalty has been allocated has been satisfied (or partially satisfied). The Company expects to continue recognizing royalty revenue from Genentech’s sales of Erivedge in the U.S. and in other markets where Genentech and Roche successfully obtain marketing approval, if any (see Note 8, Research and Development Collaborations). However, a substantial portion of potential Erivedge royalties will be paid to the Purchasers pursuant to the Oberland Purchase Agreement (see Note 7, Liability Related to the Sale of Future Royalties).

(g)Segment Reporting

The Company has determined that it operates in a single reportable segment, which is the research and development of innovative drug candidates for the treatment of human cancer.

(h)New Accounting Pronouncements

The Company assesses the applicability and impact of any recent Accounting Standards Updates (“ASUs”) issued by the FASB. Based on this assessment, recently issued ASUs were either not applicable or expected to have an immaterial impact on the Company’s Condensed Consolidated Financial Statements.

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Fair Value of Financial Instruments

6 Months Ended

Jun. 30, 2023

Fair Value Disclosures [Abstract]

Fair Value of Financial Instruments

Fair Value of Financial Instruments

The Company applies the provisions of Accounting Standards Codification 820, Fair Value Measurements (“ASC 820”), for its financial assets and liabilities that are re-measured and reported at fair value each reporting period and the non-financial assets and liabilities that are re-measured and reported at fair value on a non-recurring basis. Fair value is the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining fair value, the Company considers the principal or most advantageous market in which it would transact and considers assumptions that market participants would use when pricing the asset or liability. ASC 820 establishes a three-level valuation hierarchy for disclosure of fair value measurements. Financial assets and liabilities are categorized within the valuation hierarchy based upon the lowest level of input that is significant to the measurement of fair value. The three levels of the hierarchy are defined as follows:

Level 1	Quoted prices in active markets for identical assets or liabilities.
Level 2	Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.
Level 3	Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

In accordance with the fair value hierarchy, the following table shows the fair value as of June 30, 2023 and December 31, 2022 of those financial assets and liabilities that are measured at fair value on a recurring basis, according to the valuation techniques the Company used to determine their fair value.

(in thousands)	Quoted Prices in Active Markets (Level 1)		Other Observable Inputs (Level 2)		Unobservable Inputs (Level 3)		Fair Value
As of June 30, 2023:
Cash equivalents:
Money market funds	$	16,910	$	—	$	—	$	16,910
Short-term investments:
Corporate debt securities and commercial paper	—		26,367		—		26,367
U.S. treasury securities and government agency obligations	—		17,298		—		17,298
Total	$	16,910	$	43,665	$	—	$	60,575

    

(in thousands)	Quoted Prices in Active Markets (Level 1)		Other Observable Inputs (Level 2)		Unobservable Inputs (Level 3)		Fair Value
As of December 31, 2022:
Cash equivalents:
Money market funds	$	15,215	$	—	$	—	$	15,215
U.S. treasury securities and government agency obligations	—		2,998		—		2,998
Short-term investments:
Corporate debt securities and commercial paper	—		42,071		—		42,071
U.S. treasury securities and government agency obligations	—		23,894		—		23,894
Total	$	15,215	$	68,963	$	—	$	84,178

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Investments

6 Months Ended

Jun. 30, 2023

Investments, Debt and Equity Securities [Abstract]

Investments

Investments

The amortized cost, including interest receivable, unrealized gains and losses and fair value of investments available-for-sale as of June 30, 2023 are as follows:

(in thousands)	Amortized Cost		Unrealized Gain		Unrealized Loss		Fair Value
Short-term investments:
Corporate debt securities and commercial paper	$	26,368	$	1	$	(2)	$	26,367
U.S. treasury securities and government agency obligations	17,295		4		(1)		17,298
Total investments	$	43,663	$	5	$	(3)	$	43,665

Short-term investments have maturities ranging from one to twelve months with a weighted-average maturity of 0.2 years at June 30, 2023.

The amortized cost, including interest receivable, unrealized gains and losses and fair value of investments available-for-sale as of December 31, 2022 are as follows:

(in thousands)	Amortized Cost		Unrealized Gain		Unrealized Loss		Fair Value
Short-term investments:
Corporate debt securities and commercial paper	$	42,109	$	2	$	(40)	$	42,071
U.S. treasury securities and government agency obligations	24,042		—		(148)		23,894
Total investments	$	66,151	$	2	$	(188)	$	65,965

The weighted average maturity of short-term investments was 0.3 years at December 31, 2022.

No credit losses on available-for-sale securities were recognized during the three and six months ended June 30, 2023 or 2022. In its evaluation to determine expected credit losses, management considered all available historical and current information, expectations of future economic conditions, the type of security, the credit rating of the security, and the size of the loss position, as well as other relevant information. The Company does not intend to sell, and is unlikely to be required to sell, any of these available-for-sale investments before their effective maturity or market price recovery.

As of June 30, 2023, the Company held no investments that have been in a continuous unrealized loss position for 12 months or longer. The aggregate fair value of available-for-sale investments in a continuous unrealized loss position for 12 months or longer was $27.4 million as of December 31, 2022.

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Accrued Liabilities

6 Months Ended

Jun. 30, 2023

Other Liabilities Disclosure [Abstract]

Accrued Liabilities

Accrued LiabilitiesAccrued liabilities consisted of the following:

(in thousands)	June 30, 2023		December 31, 2022
Headcount related costs	$	1,986	$	3,152
Research and development costs	2,808		1,727
Professional and legal fees	897		762
Other	85		38
Total	$	5,776	$	5,679

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Lease

6 Months Ended

Jun. 30, 2023

Leases [Abstract]

Lease

Lease

The Company has a single lease for real estate, including laboratory and office space, and certain equipment, in Lexington, Massachusetts which commenced on May 1, 2020. A portion of the Company’s leased space is subject to an early termination option that becomes effective on the lease commencement date of a new lease for larger premises within the landlord’s commercial real estate portfolio (“New Lease”), and the Company may exercise its early termination option by providing the landlord with written notice of such election to terminate the lease agreement concurrently with the execution of the New Lease. The Company expects the lease to end as of or on December 31, 2025.

As of June 30, 2023, the Company had an operating lease liability of $3.4 million and related right-of-use asset of $3.7 million related to its operating lease. As of December 31, 2022, the Company had an operating lease liability of $3.9 million and related right-of-use asset of $4.4 million related to its operating lease.

The Company recorded lease cost of $0.4 million for the three months ended June 30, 2023 and 2022. The Company recorded lease cost of $0.7 million for the six months ended June 30, 2023 and 2022.

The total cash obligation over the approximately six-year term of this lease is $8.8 million. The Company paid $0.4 million and $0.7 million during the three and six months ended June 30, 2023, respectively. The Company paid $0.3 million and $0.6 million during the three and six months ended June 30, 2022, respectively. The discount rate associated with the Company’s right-of-use asset is 10%.

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Liability Related to the Sale of Future Royalties

6 Months Ended

Jun. 30, 2023

Nonmonetary Transactions [Abstract]

Liability Related to the Sale of Future Royalties

Liability Related to the Sale of Future Royalties

In March 2019, the Company and Curis Royalty entered into the royalty interest purchase agreement (“Oberland Purchase Agreement”) with TPC Investments I LP and TPC Investments II LP (“the Purchasers”), each of which is a Delaware limited partnership managed by Oberland Capital Management, LLC, and Lind SA LLC (the “Agent”), a Delaware limited liability company managed by Oberland Capital Management, LLC, as collateral agent for the Purchasers. The Company sold to the Purchasers a portion of its rights to receive royalties from Genentech on potential net sales of Erivedge.

As upfront consideration for the purchase of the royalty rights, at closing the Purchasers paid to Curis Royalty $65.0 million less certain transaction expenses. Curis Royalty will also be entitled to receive up to $53.5 million in milestone payments based on sales of Erivedge if the Purchasers receive payments pursuant to the Oberland Purchase Agreement in excess of $117.0 million on or prior to December 31, 2026.

The Oberland Purchase Agreement provides that after the occurrence of an event of default as defined under the security agreement by Curis Royalty, the Purchasers shall have the option, for a period of 180 days, to require Curis Royalty to repurchase a portion of certain royalty and royalty related payments, excluding a portion of non U.S. royalties retained by Curis Royalty (referred to as the “Purchased Receivables”), at a price (referred to as the “Put/Call Price”), equal to 250% of the sum of the upfront purchase price and any portion of the milestone payments paid in a lump sum by the Purchasers, if any, minus certain payments previously received by the Purchasers with respect to the Purchased Receivables. The Company concluded the put option is an embedded derivative that requires bifurcation from the deferred royalty obligation and evaluates the fair value of the put option each reporting period. The estimated fair value of the put option is immaterial as of June 30, 2023 and December 31, 2022, respectively. Additionally, Curis Royalty shall have the option at any time to repurchase the Purchased Receivables at the Put/Call Price as of the date of such repurchase. No events of default occurred as of June 30, 2023.

As a result of the obligation to pay future royalties to the Purchasers, the Company recorded the proceeds as a liability on

its Condensed Consolidated Balance Sheets. It accounts for the liability and interest expense using the interest method over the expected life of the Oberland Purchase Agreement. As a result, the Company imputes interest on the transaction and records imputed interest expense at the estimated interest rate, which the Company has included within Expense related to the sale of future royalties in the accompanying statement of operations and comprehensive loss. The Company’s estimate of the interest rate under the Oberland Purchase Agreement is based on the amount of royalty payments expected to be received by the Purchasers over the life of the Oberland Purchase Agreement. The projected amount of royalty payments expected to be paid to the Purchasers involves the use of significant estimates and assumptions with respect to the revenue growth rate in the Company’s projections of sales of Erivedge. The Company periodically assesses the expected royalty payments to Curis Royalty from Genentech using a combination of historical results and forecasts from market data sources. To the extent such payments are greater or less than its initial estimates or the timing of such payments is materially different than its original estimates, the Company will prospectively adjust the amortization of the liability.

The Company determined the fair value of the liability related to the sale of future royalties at the time of the Oberland Purchase Agreement to be $65.0 million, with a current effective annual imputed interest rate of 6.1%. The Company incurred $0.6 million of transaction costs in connection with the Oberland Purchase Agreement. These transaction costs will be amortized to imputed interest expense over the estimated term of the Oberland Purchase Agreement. The carrying value of the liability related to the sale of future royalties approximates fair value as of June 30, 2023 and is based on the Company's current estimates of future royalties expected to be paid the Purchasers over the life of the arrangement, which are considered Level 3 inputs.

The following table shows the activity with respect to the liability related to the sale of future royalties during the six months ended June 30, 2023.

(in thousands)
Carrying value of liability related to the sale of future royalties at January 1, 2023	$	49,483
Other	(49)
Imputed interest expense	1,271
Less: payments to the Purchasers	(4,467)
Carrying value of liability related to the sale of future royalties at June 30, 2023	$	46,238

In March 2023, Curis and Curis Royalty received a letter from counsel to Oberland Capital Management, LLC, the Purchasers and the Agent alleging defaults under Sections 4.04 and 6.04(b) of the Oberland Purchase Agreement and demanding cure of the asserted default under Section 6.04(b) of the Oberland Purchase Agreement. The asserted basis for the alleged defaults is that Curis and Curis Royalty were required to disclose, and failed to disclose, certain information prior to execution of the Oberland Purchase Agreement and that Curis and Curis Royalty have since failed to disclose certain information that has been requested by the Purchasers pursuant to Section 6.04(b) of the Oberland Purchase Agreement. The letter further alleges that these alleged defaults are events of default under the Oberland Purchase Agreement and that each alleged default separately entitles the Purchasers to exercise the put option described above, which would require Curis Royalty to repurchase the Purchased Receivables at the Put/Call Price. The Purchasers have not attempted to exercise that put option but have purported to reserve their alleged right to exercise it without further notice. As of June 30, 2023, the estimated amount of the Put/Call Price is up to $68.0 million. The Purchasers have also reserved other asserted rights in respect of the alleged defaults, including the asserted right to seek judicial remedies, including for damages and rescission, and to assert alleged claims against Curis and Curis Royalty for indemnification on the basis of material breach and fraud in the inducement. Curis and Curis Royalty dispute these allegations.

However, if Oberland elects to pursue these claims, and if Curis and Curis Royalty are unsuccessful in defending against these claims, it could have a material adverse impact on Curis and Curis Royalty, including their ability to continue as a going concern.

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Research and Development Collaborations

6 Months Ended

Jun. 30, 2023

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Research and Development Collaborations

Research and Development Collaborations

(a)Genentech

In June 2003, the Company licensed its proprietary Hedgehog pathway antagonist technologies to Genentech for human therapeutic use. The primary focus of the collaborative research plan has been to develop molecules that inhibit the Hedgehog pathway for the treatment of various cancers. The collaboration is currently focused on the development of Erivedge, which is being commercialized by Genentech in the U.S. and by Genentech’s parent company, Roche, outside of the U.S. for the treatment of advanced BCC. The Company has received $59.0 million in cash milestone payments as of June 30, 2023.

In addition to these payments and pursuant to the collaboration agreement, the Company is entitled to a royalty on net sales of Erivedge that ranges from 5% to 7.5%. The royalty rate applicable to Erivedge may be decreased by 2% on a country-by-country basis in certain specified circumstances.

The Company recognized $2.3 million and $2.5 million in royalty revenue under the Genentech collaboration during the three months ended June 30, 2023 and 2022, respectively. The Company recognized $4.5 million in royalty revenue under the Genentech collaboration during both six months ended June 30, 2023 and 2022.

Cost of royalties comprises payments to university licensors and was immaterial for the three and six months ended June 30, 2023 and 2022.

The Company has accounts receivables from Genentech under this collaboration of $2.4 million and $3.0 million as of June 30, 2023 and December 31, 2022, respectively, in its Condensed Consolidated Balance Sheets.

As previously discussed in Note 7, Liability Related to the Sale of Future Royalties, a significant portion of royalty revenues received from Genentech on net sales of Erivedge will be paid to the Purchasers pursuant to the Oberland Purchase Agreement.

(b)Aurigene

The Company is party to an exclusive collaboration agreement with Aurigene for the discovery, development and commercialization of small molecule compounds in the areas of immuno-oncology and selected precision oncology targets. Under the collaboration agreement, Aurigene granted the Company an option to obtain exclusive, royalty-bearing licenses to relevant Aurigene technology to develop, manufacture and commercialize products containing certain of such compounds anywhere in the world, except for India and Russia, which are territories retained by Aurigene. Additionally, Aurigene retains the rights to develop and commercialize CA-170 in Asia, and the Company is entitled to receive royalty payments on potential future sales of CA-170 in Asia at percentage rates ranging from the high single digits up to 10% subject to specified reductions.

As of June 30, 2023, the Company has exercised its option to license the following four programs under the collaboration:

1.IRAK4 Program - a precision oncology program of small molecule inhibitors of IRAK4. The development candidate is emavusertib (CA-4948).

2.PD1/VISTA Program - an immuno-oncology program of small molecule antagonists of PD1 and VISTA immune checkpoint pathways. The development candidate is CA-170.

3.PD1/TIM3 Program - an immuno-oncology program of small molecule antagonists of PD1 and TIM3 immune checkpoint pathways. The development candidate is CA-327.

4.The Company exercised its option to license a fourth program, which is an immuno-oncology program.

For each of the licensed programs (as described above) the Company is obligated to use commercially reasonable efforts to develop, obtain regulatory approval for, and commercialize at least one product in each of the U.S., specified countries in the European Union and Japan, and Aurigene is obligated to use commercially reasonable efforts to perform its obligations under the development plan for such licensed program in an expeditious manner.

For each of the IRAK4, PD1/VISTA, PD1/TIM3 programs, and the fourth immuno-oncology program, the Company has remaining unpaid or unwaived payment obligations of $42.5 million per program, related to regulatory approval and commercial sales milestones, plus specified additional payments for approvals for additional indications, if any.

In addition to the collaboration agreement, the Company is party to a master development and manufacturing agreement with Aurigene for the supply of drug substance and drug product. Under this agreement, the Company incurred less than $0.1 million and $0.3 million in research and development expense during the three and six months ended June 30, 2023, respectively.

(c)ImmuNext

The Company is party to an option and license agreement with ImmuNext (the “ImmuNext Agreement”). Under the terms of the ImmuNext Agreement, the Company agreed to engage in a collaborative effort with ImmuNext, and to conduct a Phase 1 clinical trial of CI-8993. In exchange, ImmuNext granted the Company an exclusive option, exercisable until the earlier of (a) January 2024 or (b) 90 days after database lock for the first Phase 1 trial in which the endpoints are satisfied (the “Option Period”), to obtain an exclusive, worldwide license to develop and commercialize certain VISTA antagonizing compounds and products containing these compounds in the field of oncology.

If the Company elects to exercise the option, the Company has agreed to pay to ImmuNext an option exercise fee of $20.0 million. ImmuNext will be eligible to receive up to $4.6 million in potential development milestones, up to $84.3 million in potential regulatory approval milestones, and up to $125.0 million in potential sales milestone payments from the Company. ImmuNext is also eligible to receive tiered royalties on annual net sales on a product-by-product and country-by-country basis,

at percentage rates ranging from high single digits to low double digits, subject to specified adjustments. In addition, the Company has agreed to pay ImmuNext a low double-digit percentage of sublicense revenue received by the Company or its affiliates.

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Common Stock

6 Months Ended

Jun. 30, 2023

Equity [Abstract]

Common Stock

Common Stock

2021 Sales Agreement with Cantor Fitzgerald & Co. and JonesTrading Institutional Services LLC

The Company is party to a sales agreement (the “2021 Sales Agreement”) with Cantor Fitzgerald & Co. (“Cantor”) and JonesTrading Institutional Services LLC (“JonesTrading”) to sell from time to time up to $100.0 million of the Company’s common stock through an “at the market offering” program under which Cantor and JonesTrading act as sales agents. Subject to the terms and conditions of the 2021 Sales Agreement, Cantor and JonesTrading can sell the common stock by any method deemed to be an “at-the-market” offering as defined in Rule 415 promulgated under the Securities Act of 1933, as amended (the “Securities Act”).

Pursuant to the terms of the 2021 Sales Agreement, the aggregate compensation payable to each of Cantor and JonesTrading is 3% of the gross proceeds from sales of the common stock sold by Cantor or JonesTrading, as applicable. The Company did not sell any shares of common stock under the 2021 Sales Agreement during the three and six months ended June 30, 2023. As of June 30, 2023, $93.7 million remained available for sale under the 2021 Sales Agreement.

Registered Direct Offering

In July 2023, the Company entered into a securities purchase agreement with certain institutional investors, pursuant to which the Company sold and issued, in a registered direct offering (the “July Registered Direct”), an aggregate of 18,409,756 shares of common stock, $0.01 par value per share, of the Company, at a purchase price per share of $0.82 for net proceeds of approximately $13.9 million. The July Registered Direct closed on July 10, 2023.

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Stock Plans and Stock-Based Compensation

6 Months Ended

Jun. 30, 2023

Share-Based Payment Arrangement [Abstract]

Stock Plans and Stock-Based Compensation

Stock Plans and Stock-Based Compensation

As of June 30, 2023, the Company had two stockholder-approved, stock-based compensation plans: (i) the Fourth Amended and Restated 2010 Stock Incentive Plan (“2010 Plan”) and (ii) the Amended and Restated 2010 Employee Stock Purchase Plan, (“ESPP”). New employees are typically issued options as an inducement equity award under Nasdaq Listing Rule 5635(c)(4) outside of the 2010 Plan (“Inducement Awards”).

The Fourth Amended and Restated 2010 Stock Incentive Plan

The 2010 Plan permits the granting of incentive and non-qualified stock options and stock awards to employees, officers, directors, and consultants of the Company and its subsidiaries at prices determined by the Company’s board of directors. The Company can issue up to 23,190,000 shares of its common stock pursuant to awards granted under the 2010 Plan. Options vest and become exercisable based on a schedule determined by the board of directors and expire up to ten years from the date of grant. The 2010 Plan uses a “fungible share” concept under which each share of stock subject to awards granted as options and stock appreciation rights (“SARs”), will cause one share per share under the award to be removed from the available share pool, while each share of stock subject to awards granted as restricted stock, restricted stock units, other stock-based awards or performance awards where the price charged for the award is less than 100% of the fair market value of the Company’s common stock will cause 1.3 shares per share under the award to be removed from the available share pool. As of June 30, 2023, 4,785,193 shares remained available for grant under the 2010 Plan.

During the six months ended June 30, 2023, the Company’s board of directors granted options to purchase 4,403,600 shares of the Company’s common stock to the officers and employees of the Company under the 2010 Plan. These options vest and become exercisable as to 25% of the shares underlying the award after the first year and as to an additional 6.25% of the shares underlying the award in each subsequent quarter, based upon continued employment over a four year period, and are exercisable at a price equal to the closing market price of the Company’s common stock on the grant date.

During the six months ended June 30, 2023, the Company’s board of directors granted options to its non-employee directors to purchase 425,000 shares of common stock under the 2010 Plan, which will vest and become exercisable in one year from the date of grant. These options were granted at an exercise price that equaled the closing market price of the Company’s common stock on the grant date.

Inducement Awards

For certain new employees, the Company issues Inducement Awards. These options generally vest as to 25% of the shares underlying the option on the first anniversary of the grant date, and as to an additional 6.25% of the shares underlying the option on each successive quarter thereafter. During the six months ended June 30, 2023, the Company’s board of directors

granted Inducement Awards to purchase 635,450 shares of common stock. These options are granted at an exercise price that equals the closing market price of the Company’s common stock on the grant date.

Stock Options

A summary of stock option activity under the 2010 Plan and Inducement Awards are summarized as follows:

	Number of Shares	Weighted Average Exercise Price per Share		Weighted Average Remaining Contractual Life	Aggregate Intrinsic Value
Outstanding, December 31, 2022	13,673,256	$	3.24	6.51
Granted	5,464,050	0.71
Exercised	(10,312)	0.67
Canceled/Forfeited	(1,577,748)	3.35
Outstanding, June 30, 2023	17,549,246	$	2.44	7.38	$	629
Exercisable at June 30, 2023	8,859,233	$	3.18	5.66	$	6
Vested and unvested expected to vest at June 30, 2023	17,549,246	$	2.44	7.38	$	629

The weighted average grant date fair values of the stock options granted during the six months ended June 30, 2023 and 2022 were $0.60 and $2.57, respectively, and were calculated using the following estimated assumptions under the Black-Scholes option pricing model:

	Six Months Ended June 30,
	2023	2022
Expected term (years)	5.5	5.5
Risk free interest rate	3.5% - 3.6%	1.4% - 2.5%
Expected volatility	115% - 116%	110% - 112%
Expected dividends	None	None

As of June 30, 2023, there was approximately $10.9 million of unrecognized compensation cost related to unvested employee stock option awards outstanding, which is expected to be recognized as expense over a weighted average period of 2.86 years. The intrinsic value of employee stock options exercised during the six months ended June 30, 2023 was immaterial. There were no employee stock options exercised during the six months ended June 30, 2022.

Restricted Stock Awards

During the six months ended June 30, 2023, the Company’s board of directors granted restricted stock awards ("RSAs"), for an aggregate amount of 2,340,000 shares to the employees of the Company, excluding officers, under the 2010 Plan. These RSAs vest as to 50% of the shares underlying the award on the first anniversary of the date of the grant and 50% after the second anniversary, based upon continued employment.

The following table presents a summary of unvested RSAs under the 2010 Plan as of June 30, 2023:

	Number of Shares	Weighted Average Grant Date Fair Value
Unvested, December 31, 2022	—	$	—
Awarded	2,340,000	0.91
Vested	—	—
Forfeited	—	—
Unvested, June 30, 2023	2,340,000	$	0.91

As of June 30, 2023, there were 2,340,000 shares outstanding covered by RSAs that are expected to vest. The weighted average grant date fair value of these shares of restricted stock was $0.91 per share and the aggregate fair value of these shares of restricted stock was $2.1 million. As of June 30, 2023, there was $2.0 million of unrecognized compensation costs related to RSAs, which are expected to be recognized as expense over a remaining weighted average period of 1.86 years.

Amended and Restated 2010 Employee Stock Purchase Plan

The Company has reserved 2,000,000 shares of common stock for issuance under the ESPP. Eligible employees may purchase shares of the Company’s common stock at 85% of the lower closing market price of the common stock at the beginning of the enrollment period or ending date of the purchase period within a two-year enrollment period, as defined. The Company has four six-month purchase periods per each two-year enrollment period. If, within any one of the four purchase periods in an enrollment period, the purchase period ending stock price is lower than the stock price at the beginning of the enrollment period, the two-year enrollment resets at the new lower stock price. During the three and six months ended June 30, 2023, 386,900 shares were issued under the ESPP. As of June 30, 2023, there were 788,108 shares available for future purchase under the ESPP.

Stock-Based Compensation Expense

For the three and six months ended June 30, 2023 and 2022, the Company recorded stock-based compensation expense to the following line items in its costs and expenses section of the Condensed Consolidated Statements of Operations and Comprehensive Loss:

	Three Months Ended June 30,				Six Months Ended June 30,
(in thousands)	2023		2022		2023		2022
Research and development expenses	$	654	$	854	$	1,283	$	1,579
General and administrative expenses	770		1,112		1,536		2,105
Total stock-based compensation expense	$	1,424	$	1,966	$	2,819	$	3,684

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Loss Per Common Share	6 Months Ended
	Jun. 30, 2023
Earnings Per Share [Abstract]
Loss Per Common Share	Loss Per Common ShareBasic and diluted loss per common share is computed by dividing net loss attributable to common stockholders by the weighted average number of common shares outstanding during the period. Diluted net loss per common share is the same as basic net loss per common share for the three and six months ended June 30, 2023 and 2022, because the effect of the potential common stock equivalents would be antidilutive due to the Company’s net loss position for these periods. Antidilutive securities consist of stock options outstanding of 17,549,246 and 14,585,299 as of June 30, 2023 and 2022, respectively and unvested restricted stock awards of 2,340,000 as of June 30, 2023.

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Summary of Significant Accounting Policies (Policies)

6 Months Ended

Jun. 30, 2023

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Basis of Presentation and Principles of Consolidation

Basis of Presentation and Principles of ConsolidationThe accompanying Condensed Consolidated Financial Statements have been prepared in accordance with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. These statements, however, are condensed and do not include all disclosures required by accounting principles generally accepted in the U.S. (“GAAP”) for complete financial statements and should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2022 as filed with the Securities and Exchange Commission (“SEC”) on March 13, 2023.

Use of Estimates and Assumptions

Use of Estimates and AssumptionsThe preparation of the Company’s Condensed Consolidated Financial Statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts and disclosure of revenue, expenses and certain assets and liabilities at the balance sheet date. Such estimates include the performance obligations under the Company’s collaboration agreements; the collectability of receivables; the carrying value of goodwill; and the value of certain investments and liabilities. Actual results may differ from such estimates. These interim results are not necessarily indicative of results to be expected for a full year or subsequent interim periods.

Cash Equivalents, Restricted Cash, and Investments

Cash Equivalents, Restricted Cash, and Investments

Cash equivalents consist of highly liquid investments purchased with original maturities of three months or less. All other investments are marketable securities.

The Company classified $0.6 million of its cash as restricted cash as of June 30, 2023 and December 31, 2022. These amounts represent the security deposit associated with the Company’s Lexington, Massachusetts headquarters.

The Company’s short-term investments are marketable debt securities with original maturities of greater than three months from the date of purchase, but less than twelve months from the balance sheet date. Marketable securities consist of commercial paper, corporate bonds and notes, and/or government obligations. All of the Company’s investments have been designated available-for-sale and are stated at fair value. Unrealized gains and losses on investments are included in accumulated other comprehensive income (loss) as a separate component of stockholders’ equity. Realized gains and losses, dividends and interest income are included in other income (expense) in the period during which the securities are sold. Any premium or discount arising at purchase is amortized and/or accreted to interest income.

Leases

Leases

The Company determines if an arrangement is a lease at contract inception. The Company made an accounting policy election to not recognize leases with an initial term of 12 months or less within its Consolidated Balance Sheets and to recognize those lease payments on a straight-line basis in its Consolidated Statements of Operations and Comprehensive Loss over the lease term. Operating lease assets represent the Company’s right to use an underlying asset for the lease term and operating lease liabilities represent its obligation to make lease payments arising from the lease. Operating lease assets and liabilities are recognized at the commencement date of the lease based upon the present value of lease payments over the lease term. When determining the lease term, the Company includes options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option.

As the Company’s lease does not provide an implicit interest rate, the Company uses its incremental borrowing rate, which is based on rates that would be incurred to borrow on a collateralized basis over a term equal to the lease payments in a similar economic environment, in determining the present value of lease payments.

The lease payment used to determine the operating lease asset may include lease incentives, stated rent increases and was recognized as an operating lease right-of-use asset in the Condensed Consolidated Balance Sheets. The Company’s lease agreements may include both lease and non-lease components, which may be accounted for as a single lease component. Variable payments included in the lease agreement are expensed as incurred.

The Company’s operating lease is reflected in operating lease right-of-use asset and operating lease liability in the Condensed Consolidated Balance Sheets. Lease expense for lease payments is recognized on a straight-line basis over the lease term.

Other Assets

Other AssetsOther assets consist of long-term prepayments and deposits.

Revenue Recognition

Revenue Recognition

The Company applies the revenue recognition guidance in accordance with Financial Accounting Standards Board (“FASB”) Codification Topic 606, Revenue from Contracts with Customers. Revenue is recognized when persuasive evidence of an arrangement exists, delivery has occurred and title has passed, the price is fixed or determinable, and collectability is reasonably assured.

The Company recognizes royalty revenues related to Genentech’s and Roche’s sales of Erivedge. For arrangements that include sales-based royalties, including milestone payments based on the level of sales, and where the license is deemed to be the predominant item to which the royalties relate, the Company recognizes revenue at the later of (i) when the related sales occur, or (ii) when the performance obligation to which some or all of the royalty has been allocated has been satisfied (or partially satisfied). The Company expects to continue recognizing royalty revenue from Genentech’s sales of Erivedge in the U.S. and in other markets where Genentech and Roche successfully obtain marketing approval, if any (see Note 8, Research and Development Collaborations). However, a substantial portion of potential Erivedge royalties will be paid to the Purchasers pursuant to the Oberland Purchase Agreement (see Note 7, Liability Related to the Sale of Future Royalties).

Segment Reporting

Segment ReportingThe Company has determined that it operates in a single reportable segment, which is the research and development of innovative drug candidates for the treatment of human cancer.

New Accounting Pronouncements

New Accounting PronouncementsThe Company assesses the applicability and impact of any recent Accounting Standards Updates (“ASUs”) issued by the FASB. Based on this assessment, recently issued ASUs were either not applicable or expected to have an immaterial impact on the Company’s Condensed Consolidated Financial Statements.

Fair Value of Financial Instruments

Fair Value of Financial Instruments

The Company applies the provisions of Accounting Standards Codification 820, Fair Value Measurements (“ASC 820”), for its financial assets and liabilities that are re-measured and reported at fair value each reporting period and the non-financial assets and liabilities that are re-measured and reported at fair value on a non-recurring basis. Fair value is the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining fair value, the Company considers the principal or most advantageous market in which it would transact and considers assumptions that market participants would use when pricing the asset or liability. ASC 820 establishes a three-level valuation hierarchy for disclosure of fair value measurements. Financial assets and liabilities are categorized within the valuation hierarchy based upon the lowest level of input that is significant to the measurement of fair value. The three levels of the hierarchy are defined as follows:

Level 1	Quoted prices in active markets for identical assets or liabilities.
Level 2	Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.
Level 3	Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

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Fair Value of Financial Instruments (Tables)

6 Months Ended

Jun. 30, 2023

Fair Value Disclosures [Abstract]

Schedule of Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis

In accordance with the fair value hierarchy, the following table shows the fair value as of June 30, 2023 and December 31, 2022 of those financial assets and liabilities that are measured at fair value on a recurring basis, according to the valuation techniques the Company used to determine their fair value.

(in thousands)	Quoted Prices in Active Markets (Level 1)		Other Observable Inputs (Level 2)		Unobservable Inputs (Level 3)		Fair Value
As of June 30, 2023:
Cash equivalents:
Money market funds	$	16,910	$	—	$	—	$	16,910
Short-term investments:
Corporate debt securities and commercial paper	—		26,367		—		26,367
U.S. treasury securities and government agency obligations	—		17,298		—		17,298
Total	$	16,910	$	43,665	$	—	$	60,575

    

(in thousands)	Quoted Prices in Active Markets (Level 1)		Other Observable Inputs (Level 2)		Unobservable Inputs (Level 3)		Fair Value
As of December 31, 2022:
Cash equivalents:
Money market funds	$	15,215	$	—	$	—	$	15,215
U.S. treasury securities and government agency obligations	—		2,998		—		2,998
Short-term investments:
Corporate debt securities and commercial paper	—		42,071		—		42,071
U.S. treasury securities and government agency obligations	—		23,894		—		23,894
Total	$	15,215	$	68,963	$	—	$	84,178

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Investments (Tables)

6 Months Ended

Jun. 30, 2023

Investments, Debt and Equity Securities [Abstract]

Schedule of Amortized Cost, Unrealized Gains and Losses and Fair Value of Investments Available-for-Sale

The amortized cost, including interest receivable, unrealized gains and losses and fair value of investments available-for-sale as of June 30, 2023 are as follows:

(in thousands)	Amortized Cost		Unrealized Gain		Unrealized Loss		Fair Value
Short-term investments:
Corporate debt securities and commercial paper	$	26,368	$	1	$	(2)	$	26,367
U.S. treasury securities and government agency obligations	17,295		4		(1)		17,298
Total investments	$	43,663	$	5	$	(3)	$	43,665

The amortized cost, including interest receivable, unrealized gains and losses and fair value of investments available-for-sale as of December 31, 2022 are as follows:

(in thousands)	Amortized Cost		Unrealized Gain		Unrealized Loss		Fair Value
Short-term investments:
Corporate debt securities and commercial paper	$	42,109	$	2	$	(40)	$	42,071
U.S. treasury securities and government agency obligations	24,042		—		(148)		23,894
Total investments	$	66,151	$	2	$	(188)	$	65,965

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Accrued Liabilities (Tables)

6 Months Ended

Jun. 30, 2023

Other Liabilities Disclosure [Abstract]

Schedule of Accrued Liabilities

Accrued liabilities consisted of the following:

(in thousands)	June 30, 2023		December 31, 2022
Headcount related costs	$	1,986	$	3,152
Research and development costs	2,808		1,727
Professional and legal fees	897		762
Other	85		38
Total	$	5,776	$	5,679

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Liability Related to the Sale of Future Royalties (Tables)

6 Months Ended

Jun. 30, 2023

Nonmonetary Transactions [Abstract]

Schedule of Liability Due to Non-Cash Transaction

The following table shows the activity with respect to the liability related to the sale of future royalties during the six months ended June 30, 2023.

(in thousands)
Carrying value of liability related to the sale of future royalties at January 1, 2023	$	49,483
Other	(49)
Imputed interest expense	1,271
Less: payments to the Purchasers	(4,467)
Carrying value of liability related to the sale of future royalties at June 30, 2023	$	46,238

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Stock Plans and Stock-Based Compensation (Tables)

6 Months Ended

Jun. 30, 2023

Share-Based Payment Arrangement [Abstract]

Summary of Stock Option Activity

A summary of stock option activity under the 2010 Plan and Inducement Awards are summarized as follows:

	Number of Shares	Weighted Average Exercise Price per Share		Weighted Average Remaining Contractual Life	Aggregate Intrinsic Value
Outstanding, December 31, 2022	13,673,256	$	3.24	6.51
Granted	5,464,050	0.71
Exercised	(10,312)	0.67
Canceled/Forfeited	(1,577,748)	3.35
Outstanding, June 30, 2023	17,549,246	$	2.44	7.38	$	629
Exercisable at June 30, 2023	8,859,233	$	3.18	5.66	$	6
Vested and unvested expected to vest at June 30, 2023	17,549,246	$	2.44	7.38	$	629

The weighted average grant date fair values of the stock options granted during the six months ended June 30, 2023 and 2022 were $0.60 and $2.57, respectively, and were calculated using the following estimated assumptions under the Black-Scholes option pricing model:

	Six Months Ended June 30,
	2023	2022
Expected term (years)	5.5	5.5
Risk free interest rate	3.5% - 3.6%	1.4% - 2.5%
Expected volatility	115% - 116%	110% - 112%
Expected dividends	None	None

Summary of Nonvested Restricted Stock Shares Activity

The following table presents a summary of unvested RSAs under the 2010 Plan as of June 30, 2023:

	Number of Shares	Weighted Average Grant Date Fair Value
Unvested, December 31, 2022	—	$	—
Awarded	2,340,000	0.91
Vested	—	—
Forfeited	—	—
Unvested, June 30, 2023	2,340,000	$	0.91

Schedule of Share Based Compensation Allocation of Recognized Period Costs

For the three and six months ended June 30, 2023 and 2022, the Company recorded stock-based compensation expense to the following line items in its costs and expenses section of the Condensed Consolidated Statements of Operations and Comprehensive Loss:

	Three Months Ended June 30,				Six Months Ended June 30,
(in thousands)	2023		2022		2023		2022
Research and development expenses	$	654	$	854	$	1,283	$	1,579
General and administrative expenses	770		1,112		1,536		2,105
Total stock-based compensation expense	$	1,424	$	1,966	$	2,819	$	3,684

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Nature of Business (Details) - USD ($) $ in Thousands	1 Months Ended	3 Months Ended				6 Months Ended
	Jul. 31, 2023	Jun. 30, 2023	Mar. 31, 2023	Jun. 30, 2022	Mar. 31, 2022	Jun. 30, 2023	Jun. 30, 2022	Dec. 31, 2022
Subsidiary, Sale of Stock [Line Items]
Accumulated deficit		$ 1,172,517				$ 1,172,517		$ 1,148,997
Net loss		11,961	$ 11,559	$ 15,940	$ 16,109	23,520	$ 32,049
Cash used in operations						20,067	$ 28,947
Cash, cash equivalents, and investments		$ 63,500				$ 63,500
Subsequent Event | Registered Direct Offering
Subsidiary, Sale of Stock [Line Items]
Net proceeds	$ 13,900

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Summary of Significant Accounting Policies (Details) $ in Millions	6 Months Ended
	Jun. 30, 2023 USD ($) segment	Dec. 31, 2022 USD ($)
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Restricted cash | $	$ 0.6	$ 0.6
Number of reportable segments | segment	1

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Fair Value of Financial Instruments - (Details) - Fair Value, Measurements, Recurring - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Short-term investments:
Total	$ 60,575	$ 84,178
Corporate debt securities and commercial paper
Short-term investments:
Short-term investments:	26,367	42,071
U.S. treasury securities and government agency obligations
Short-term investments:
Short-term investments:	17,298	23,894
Money market funds
Cash equivalents:
Cash Equivalents	16,910	15,215
U.S. treasury securities and government agency obligations
Cash equivalents:
Cash Equivalents		2,998
Quoted Prices in Active Markets (Level 1)
Short-term investments:
Total	16,910	15,215
Quoted Prices in Active Markets (Level 1) | Corporate debt securities and commercial paper
Short-term investments:
Short-term investments:	0	0
Quoted Prices in Active Markets (Level 1) | U.S. treasury securities and government agency obligations
Short-term investments:
Short-term investments:	0	0
Quoted Prices in Active Markets (Level 1) | Money market funds
Cash equivalents:
Cash Equivalents	16,910	15,215
Quoted Prices in Active Markets (Level 1) | U.S. treasury securities and government agency obligations
Cash equivalents:
Cash Equivalents		0
Other Observable Inputs (Level 2)
Short-term investments:
Total	43,665	68,963
Other Observable Inputs (Level 2) | Corporate debt securities and commercial paper
Short-term investments:
Short-term investments:	26,367	42,071
Other Observable Inputs (Level 2) | U.S. treasury securities and government agency obligations
Short-term investments:
Short-term investments:	17,298	23,894
Other Observable Inputs (Level 2) | Money market funds
Cash equivalents:
Cash Equivalents	0	0
Other Observable Inputs (Level 2) | U.S. treasury securities and government agency obligations
Cash equivalents:
Cash Equivalents		2,998
Unobservable Inputs (Level 3)
Short-term investments:
Total	0	0
Unobservable Inputs (Level 3) | Corporate debt securities and commercial paper
Short-term investments:
Short-term investments:	0	0
Unobservable Inputs (Level 3) | U.S. treasury securities and government agency obligations
Short-term investments:
Short-term investments:	0	0
Unobservable Inputs (Level 3) | Money market funds
Cash equivalents:
Cash Equivalents	$ 0	0
Unobservable Inputs (Level 3) | U.S. treasury securities and government agency obligations
Cash equivalents:
Cash Equivalents		$ 0

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Investments - Amortized Cost of Unrealized Gains and Losses and Fair Value of Investments (Details) - USD ($)	6 Months Ended	12 Months Ended
	Jun. 30, 2023	Dec. 31, 2022	Jun. 30, 2022
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	$ 43,663,000	$ 66,151,000
Unrealized Gain	5,000	2,000
Unrealized Loss	(3,000)	(188,000)
Fair Value	$ 43,665,000	65,965,000
Weighted-average maturity of short-term investments	2 months 12 days
Debt securities, available-for-sale, credit loss	$ 0		$ 0
Fair value of available-for-sale investments in a continuous unrealized loss position for 12 months or longer		$ 27,400,000
Short-term investments
Debt Securities, Available-for-sale [Line Items]
Weighted-average maturity of short-term investments		3 months 18 days
Short-term investments | Minimum
Debt Securities, Available-for-sale [Line Items]
Range of maturities	1 month
Short-term investments | Maximum
Debt Securities, Available-for-sale [Line Items]
Range of maturities	12 months
Corporate debt securities and commercial paper
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	$ 26,368,000	$ 42,109,000
Unrealized Gain	1,000	2,000
Unrealized Loss	(2,000)	(40,000)
Fair Value	26,367,000	42,071,000
U.S. treasury securities and government agency obligations
Debt Securities, Available-for-sale [Line Items]
Amortized Cost	17,295,000	24,042,000
Unrealized Gain	4,000	0
Unrealized Loss	(1,000)	(148,000)
Fair Value	$ 17,298,000	$ 23,894,000

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Accrued Liabilities (Details) - USD ($) $ in Thousands	Jun. 30, 2023	Dec. 31, 2022
Other Liabilities Disclosure [Abstract]
Headcount related costs	$ 1,986	$ 3,152
Research and development costs	2,808	762
Professional and legal fees	897	1,727
Other	85	38
Total	$ 5,776	$ 5,679

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Lease (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022	Dec. 31, 2022
Leases [Abstract]
Operating lease, liability	$ 3,400		$ 3,400		$ 3,900
Operating lease right-of-use asset	3,740		3,740		$ 4,401
Operating lease, expense	$ 400	$ 400	$ 700	$ 700
Remaining lease term	6 years		6 years
Lease obligations	$ 8,800		$ 8,800
Operating lease payments	$ 400	$ 300	$ 700	$ 600
Weighted average discount rate	10.00%		10.00%

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Liability Related to the Sale of Future Royalties - Narrative (Details) - USD ($) $ in Millions	1 Months Ended	6 Months Ended
	Mar. 31, 2019	Jun. 30, 2023
Nonmonetary Transaction [Line Items]
Non-cash interest rate	6.10%
Transaction fees	$ 0.6
Oberland Capital
Nonmonetary Transaction [Line Items]
Transaction expenses	65.0
Purchaser default option period		180 days
Percentage of royalty purchase agreement		250.00%
Estimated price amount		$ 68.0
Oberland Capital | Aggregate Net Royalties Prior to 2027
Nonmonetary Transaction [Line Items]
Cash proceeds from royalty purchase agreement	53.5
Royalty amount threshold	$ 117.0

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Liability Related to the Sale of Future Royalties - Liability Due to Non-Cash Transaction (Details) $ in Thousands	6 Months Ended
	Jun. 30, 2023 USD ($)
Nonmonetary Transaction [Roll Forward]
Carrying value of liability related to the sale of future royalties at January 1, 2023	$ 49,483
Other	(49)
Imputed interest expense	1,271
Less: payments to the Purchasers	(4,467)
Carrying value of liability related to the sale of future royalties at June 30, 2023	$ 46,238

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Research and Development Collaborations (Details) $ in Thousands	1 Months Ended	3 Months Ended		6 Months Ended
	Jun. 30, 2003	Jun. 30, 2023 USD ($)	Jun. 30, 2022 USD ($)	Jun. 30, 2023 USD ($) program	Jun. 30, 2022 USD ($)	Dec. 31, 2022 USD ($)	Feb. 29, 2020
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Revenues, net		$ 2,197	$ 2,393	$ 4,494	$ 4,450
Accounts receivable		2,386		$ 2,386		$ 2,975
Number of program licensed | program				4
Genentech, Inc.
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Amount received for specified clinical development and regulatory objectives		59,000		$ 59,000
Percentage of royalty rate decrease	2.00%
Accounts receivable		2,400		2,400		$ 3,000
Genentech, Inc. | Royalties
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Revenues, net		2,300	$ 2,500	4,500	$ 4,500
Genentech, Inc. | Minimum
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Percentage of royalty on net sales	5.00%
Genentech, Inc. | Maximum
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Percentage of royalty on net sales	7.50%
Aurigene | IRAK4, PD1/VISTA, and PD1/TIM3 Programs
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Waived payment of milestone and other payments (up to)				42,500
Aurigene | Master Development and Manufacturing Agreement | Research and Development Expense
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Collaborative arrangement payments agreement		100		300
Aurigene | Maximum
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Royalty fees receivable (as a percent)							10.00%
ImmuNext | Maximum
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Option exercise fee		20,000		20,000
Development milestone payments		4,600		4,600
Regulatory approval milestone payments		84,300		84,300
Sales milestone payments		$ 125,000		$ 125,000

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Common Stock (Details) - USD ($)	1 Months Ended
	Jul. 31, 2023	Jun. 30, 2023	Dec. 31, 2022	Dec. 31, 2021
Class of Stock [Line Items]
Common stock par value (in dollars per share)		$ 0.01	$ 0.01
Registered Direct Offering | Subsequent Event
Class of Stock [Line Items]
Number of shares sold (in shares)	18,409,756
Common stock par value (in dollars per share)	$ 0.01
Sale price per share (in dollars per share)	$ 0.82
Net proceeds	$ 13,900,000
Common Stock | Cantor Fitzgerald & Co
Class of Stock [Line Items]
Common stock authorized (up to)				$ 100,000,000
Compensation fee				3.00%
Sale of stock remaining authorized amount		$ 93,700,000

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Stock Plans and Stock-Based Compensation - Narrative (Details)	1 Months Ended	3 Months Ended	6 Months Ended
	May 31, 2021 shares	Jun. 30, 2023 USD ($) shares	Jun. 30, 2023 USD ($) purchase_period plan $ / shares shares	Jun. 30, 2022 $ / shares	Dec. 31, 2022 shares
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items]
Number of shareholder-approved, share-based compensation plans | plan			2
Granted (in shares)			5,464,050
Weighted average grant-date fair values of stock options (in dollars per share) | $ / shares			$ 0.60	$ 2.57
Unrecognized compensation cost, net of estimated forfeitures | $		$ 10,900,000	$ 10,900,000
Intrinsic values of employee stock options exercised | $			$ 0
Officer
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items]
Awarded (in shares)			635,450
Amended and Restated 2010 Stock Incentive Plan
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items]
Shares authorized (in shares)	23,190,000
Number of shares under award to be removed from share pool			4,785,193
2010 Plan
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items]
Granted (in shares)			4,403,600
2010 Plan | Non-Employee Directors
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items]
Granted (in shares)			425,000
Employee Stock Purchase Plan
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items]
Issuance of stock under Employee Stock Purchase Plan (in shares)		386,900	386,900
Stock Options, or Stock Appreciation Rights | Amended and Restated 2010 Stock Incentive Plan
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items]
Period of time options are exercisable	10 years
Shares removed from pool (in shares per share)	1
Restricted Stock, RSUs, Other Stock-Based Awards, or Performance Awards | Amended and Restated 2010 Stock Incentive Plan
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items]
Shares removed from pool (in shares per share)	1.3
Price charged for award based on fair market value percentage (less than)	100.00%
Stock Options
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items]
Vesting period (years)			4 years
Unrecognized compensation cost, weighted average period for recognition			2 years 10 months 9 days
Stock Options | 2010 Plan | Non-Employee Directors
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items]
Vesting period (years)			1 year
Stock Options | 2010 Plan | Award Vesting After First Year
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items]
Percentage of vested shares which are exercisable under stock option			25.00%
Stock Options | 2010 Plan | Quarterly Vesting After First Year
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items]
Percentage of vested shares which are exercisable under stock option			6.25%
Restricted Stock
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items]
Awarded (in shares)			2,340,000
Unrecognized compensation cost, weighted average period for recognition			1 year 10 months 9 days
Outstanding shares (in shares)		2,340,000	2,340,000		0
Exercise price (in dollars per share) | $ / shares			$ 0.91
Aggregate fair value of restricted stock | $		$ 2,100,000	$ 2,100,000
Compensation expense related to employee and director stock option grants | $		$ 2,000,000.0	$ 2,000,000.0
Restricted Stock | Tranche One
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items]
Percentage of vested shares which are exercisable under stock option			50.00%
Restricted Stock | Tranche Two
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items]
Percentage of vested shares which are exercisable under stock option			50.00%
Restricted Stock | 2010 Plan
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items]
Aggregate amount of granted restricted stock awards, or RSAs			2,340,000
Employee Stock | Employee Stock Purchase Plan
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items]
Shares authorized (in shares)		2,000,000	2,000,000
Price charged for award based on fair market value percentage (less than)			85.00%
Enrollment period			2 years
Number of purchase periods per year | purchase_period			4
Term of purchase periods			6 months
Shares available for future purchase under ESPP (in shares)		788,108	788,108

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Stock Plans and Stock-Based Compensation - Stock Option Activity (Details) - USD ($) $ / shares in Units, $ in Thousands	6 Months Ended	12 Months Ended
	Jun. 30, 2023	Dec. 31, 2022
Number of Shares
Beginning balance (in shares)	13,673,256
Granted (in shares)	5,464,050
Exercised (in shares)	(10,312)
Canceled/Forfeited (in shares)	(1,577,748)
Ending balance (in shares)	17,549,246	13,673,256
Exercisable at end of period (in shares)	8,859,233
Vested and unvested expected to vest at end of period (in shares)	17,549,246
Weighted Average Exercise Price per Share
Beginning balance (in dollars per share)	$ 3.24
Granted (in dollars per share)	0.71
Exercised (in dollars per share)	0.67
Canceled/Forfeited (in dollars per share)	3.35
Ending balance (in dollars per share)	2.44	$ 3.24
Exercisable at end of period (in dollars per share)	3.18
Vested and unvested expected to vest at end of period (in dollars per share)	$ 2.44
Weighted Average Remaining Contractual Life
Outstanding at end of period	7 years 4 months 17 days	6 years 6 months 3 days
Exercisable at end of period	5 years 7 months 28 days
Vested and unvested expected to vest at end of period	7 years 4 months 17 days
Aggregate Intrinsic Value
Outstanding at end of period	$ 629
Exercisable at end of period	6
Vested and unvested expected to vest at end of period	$ 629

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Stock Plans and Stock-Based Compensation - Key Assumptions (Details)	6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022
Share-Based Payment Arrangement [Abstract]
Expected term	5 years 6 months	5 years 6 months
Risk -free Interest rate (minimum)	3.50%	1.40%
Risk -free Interest rate (maximum)	3.60%	2.50%
Expected volatility (minimum)	115.00%	110.00%
Expected volatility (maximum)	116.00%	112.00%

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Stock Plans and Stock Based Compensation - Restricted Stock Award Activity (Details) - Restricted Stock	6 Months Ended
	Jun. 30, 2023 $ / shares shares
Number of Shares
Beginning balance (in shares) | shares	0
Awarded (in shares) | shares	2,340,000
Vested (in shares) | shares	0
Forfeited (in shares) | shares	0
Ending balance (in shares) | shares	2,340,000
Weighted Average Grant Date Fair Value
Beginning balance (in dollars per share) | $ / shares	$ 0
Awarded (in dollars per share) | $ / shares	0.91
Vested (in dollars per share) | $ / shares	0
Forfeited (in dollars per share) | $ / shares	0
Ending balance (in dollars per share) | $ / shares	$ 0.91

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Stock Plans and Stock-Based Compensation - Stock-based Compensation Expense (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items]
Total stock-based compensation expense	$ 1,424,000	$ 1,966	$ 2,819,000	$ 3,684
Research and development expenses
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items]
Total stock-based compensation expense	654,000	854	1,283,000	1,579
General and administrative expenses
Deferred Compensation Arrangement with Individual, Share-based Payments [Line Items]
Total stock-based compensation expense	$ 770,000	$ 1,112	$ 1,536,000	$ 2,105

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Loss Per Common Share (Details) - shares	6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Dec. 31, 2022
Restricted Stock
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Outstanding shares (in shares)	2,340,000		0
Stock Options
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities (in shares)	17,549,246	14,585,299