On Monday, H.C. Wainwright adjusted its outlook for Curis (NASDAQ:CRIS), reducing the price target to $20.00 from the previous $26.00 but maintaining a Buy rating on the stock. The adjustment follows Curis's recent financial moves, including a registered direct offering and concurrent private placement.
On October 29, Curis announced it would be selling 2,398,414 shares of common stock at-the-market in a registered direct offering. Additionally, the company is issuing unregistered warrants in a private placement, which allows for the purchase of up to an equivalent number of shares. These warrants can be exercised immediately and will remain valid for five years at an exercise price of $4.92 per share.
The proceeds from this offering are earmarked for research and development, working capital, and other general corporate expenses. The update to the financial model reflects the dilution from the offering. As of June 30, 2024, Curis reported having $28.4 million in cash reserves.
The company's management anticipates that the new funding will extend Curis's cash runway into mid-2025, which is an improvement from the previously forecasted first quarter of 2025. The reduction in the price target to $20.00 is attributed to the dilution resulting from the offering, as stated by the analyst from H.C. Wainwright. Despite the lower price target, the firm reaffirms its Buy rating for Curis shares.
In other recent news, Curis Inc (NASDAQ:CRIS). has secured approximately $12.1 million from a stock and warrant sale, aimed at funding research and development, working capital, and other corporate expenses. This financial transaction is part of the company's ongoing efforts to develop the small molecule IRAK4 inhibitor emavusertib, which is currently undergoing various phases of clinical trials for different types of cancer.
Concurrently, Curis has received positive analyst ratings from firms such as Laidlaw, Jones Trading, and H.C. Wainwright, largely due to the promising results from its clinical studies on emavusertib.
The company's recent advancements in the TakeAim Lymphoma and TakeAim Leukemia studies have been particularly noteworthy. Emavusertib has shown an objective response rate of over 50% in primary central nervous system lymphoma (PCNSL) patients when used in combination with ibrutinib. The drug has also demonstrated objective responses in patients with splicing factor and FLT3 mutations in acute myeloid leukemia (AML).
Despite reporting a net loss of $11.8 million for the second quarter of 2024, Curis remains optimistic about the potential of emavusertib and has sufficient cash reserves, amounting to $28.4 million, to fund operations well into the first quarter of 2025. As the company continues to explore the potential of emavusertib in various cancer indications, it is actively discussing the drug's development path with regulatory authorities.
InvestingPro Insights
Recent financial data from InvestingPro sheds additional light on Curis's current situation. The company's market capitalization stands at a modest $35.02 million, reflecting its status as a small-cap biotech firm. Curis's revenue for the last twelve months as of Q2 2024 was $10.16 million, with a concerning revenue growth decline of 0.44% over the same period.
InvestingPro Tips highlight some challenges facing Curis. The stock is currently trading near its 52-week low, and its price has taken a significant hit over the last six months, with a total return of -74.45%. This aligns with the company's need for additional funding as outlined in the article. Moreover, Curis is not profitable over the last twelve months, which is reflected in its negative gross profit margin of -297.48%.
These insights underscore the importance of the recent funding round for Curis, as it aims to extend its cash runway and continue its research and development efforts. Investors considering Curis should note that InvestingPro offers 10 additional tips for a more comprehensive analysis of the company's prospects.
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