With only $28 million in the bank at the end of the third quarter and no drugs on the market, any financial help that Curis
So it's not surprising that the stock was beating the Dow Jones Industrial Index
The LLS will contribute approximately 50% of the cost of development of CUDC-907 up to $4 million, which should help Curis finish preclinical studies and start a phase 1a dose escalation study in patients with B-cell lymphoma and multiple myeloma. Assuming the drug looks good in the early trial, there's additional funding available from LLS for phase 1b and phase 2a studies.
If CUDC-907 is a flop, Curis won't be obligated to repay the funds, but this isn't exactly free money. If Curis decides to stop developing CUDC-907 despite positive results, it'll have to make a payment to LLS. That's what happened to Geron
If CUDC-907 does make it to market, Curis will have to pay milestone payments up to 2.5 times the amount that LLS contributes to the development of the drug. At least some of the payments are tied to the drug's commercial success, so it appears Curis won't be stuck footing a huge bill if the drug is a commercial flop.
Except for the payments -- and who's going to complain about the payments if the drug works? -- there's little downside to these types of deals. Vertex Pharmaceuticals
Giving up some of the upside is secondary to cutting the cash burn rate while Curis waits for its own milestone payments and royalty payments from Roche if vismodegib, which Curis helped develop, makes it to market.
Looking for more high-tech stocks? Check out the Fool's new report " The Next Trillion Dollar Revolution ."
Fool contributor Brian Orelli holds no position in any company mentioned. Check out his holdings and a short bio. The Motley Fool owns shares of Johnson & Johnson. Motley Fool newsletter services have recommended buying shares of Johnson & Johnson and Vertex Pharmaceuticals and creating a diagonal call position in Johnson & Johnson. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.