Curis Inc (NASDAQ:CRIS) climbed Monday after agreeing to sell for as much as $135.7 million the rights to part of the royalty revenue from a treatment approved for patients with advanced basal cell carcinoma.
The cancer-focused biotech company said it has come to terms with funds managed by Oberland Capital Management LLC on worldwide net sales of Erivedge. The treatment is being developed and commercialized by Roche Group and its Genentech subsidiary under a 2003 collaboration agreement between Curis and Genentech.
Shares of Curis climbed 30% to $1.86 in Monday’s Nasdaq trading.
Under the agreement, Curis receives $65 million in an upfront cash payment. In addition, the Lexington, Massachusetts, company is entitled to an additional $70.7 million in milestone payments if future net royalties exceed thresholds.
New York-based Oberland Capital will receive 100% of the first $13.2 million of annual net royalties due to Curis from worldwide net sales of Erivedge and a 35% share after that, excluding a portion of non-US royalties.
Curis used a portion of the sale proceeds to retire existing debt. Remaining proceeds of about $30 million, excluding closing costs and related transaction fees, will be used to fund operations.
Hedgehog signaling inhibitor
Erivedge, according to Curis, is a first-in-class, orally administered small molecule designed to inhibit the Hedgehog signaling pathway by targeting a protein known as Smoothened.
Genetic mutations that lead to unregulated activation of Hedgehog signaling are found in basal cell carcinoma and medulloblastomas, according to Curis. Aberrant signaling in the Hedgehog pathway is found in more than 90% of basal cell carcinoma cases.
The treatment is approved for use in patients with advanced basal cell carcinoma in the US and more than 60 other countries. Erivedge is under regulatory review for commercialization in other territories, according to Curis.
Contact Dennis Fitzgerald at [email protected]