5F: CRIS: Potential Alternative Treatment Should Not Affect BCC Market Opportuni [DFVPSFN]
11:00am EST 5-Mar-04 Brean Murray & Co. (Jonathan Aschoff PhD 212-702-6) CRIS
Curis, Inc. (CRIS-$5.65-Strong Buy) 3/05/04
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Potential alternative treatment for BCC from 3M Pharmaceuticals, Inc. should not
affect the market opportunity for CRIS's Hh antagonist program
Yesterday, 3M Pharmaceuticals, Inc. announced FDA approval of AldaraTM, an
immune response modifier, for the treatment of Actinic Keratosis (AK), and
AldaraTM is under FDA review for the treatment of superficial BCC (sBCC), which
makes up about 80% of BCC population.
?3M's proposed AldaraTM treatment for sBCC is a topical application, similar to
CRIS's Hh antagonist program; however, the mechanism of action is vastly
different.
AldaraTM efficacy data, where approximately 80% of patients showed complete sBCC
clearance rate, is lower than that of surgery, the current standard of
treatment.
We reiterate our Strong Buy rating and our $9.00 one-year target.
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52-Week Market Est EPS Cash/ Qtr Burn Ent. Target Risk
Range Cap Growth 03 Rate Value Price Profile
$7-0.65 $233.7M NM $37.7M $3.9M $218M $9.00 High
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EPS Q1 Q2 Q3 Q4 Total P/E Cons.
12/02A (2.57) NM
12/03A (0.14) (0.15) 0.11 (0.17) (0.33) NM
12/04E (0.11) (0.11) (0.11) (0.06) (0.39) NM (0.39)
12/05E (0.15) NM (0.15)
12/06E (0.22) NM (0.22)
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Yesterday, 3M Pharmaceuticals, Inc. announced FDA approval of AldaraTM, an
immune response modifier, for the treatment of Actinic Keratosis (AK), and
AldaraTM is under FDA review for the treatment of superficial BCC (sBCC), which
makes up about 80% of BCC population. Actinic keratosis are lesions on the
outermost layer of the skin and are typically precursors to skin cancer. AK
affects approximately 10 million patients, mostly as a result of chronic sun
exposure.
3M's proposed AldaraTM treatment for sBCC is a topical application, similar to
CRIS's Hh antagonist program; however, the mechanism of action is vastly
different. AldaraTM works by inducing the production of cytokines to start a
strong immune reaction to eliminate virus infected cells and tumor cells.
However, given the strong immune response to the targeted site, many patients
experience side-effects including rash and inflammation during the treatment
period (12 weeks for the AldaraTM pivotal study.) CRIS's Hh antagonist program
works by inhibiting the over-expression of the Hh pathway, which is believed to
be the main underlying cause of BCC. In pre-clinical studies, no toxicity was
observed.
AldaraTM efficacy data, where approximately 80% of patients showed complete sBCC
clearance rate, is lower than that of surgery, the current standard of
treatment. Although BCC is highly curable, recurrence rates and side-effects
are major concerns. We believe that CRIS's Hh antagonist program, although
still years from NDA submission, will be the standard of care, if approved.
We reiterate our Strong Buy rating and our $9.00 one-year target.
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IMPORTANT DISCLOSURES
Stock price charts designating rating change/target price information are
available upon request. Please contact
shriverj@bmur.com.
Strong Buy: Expected to significantly outperform market*
32.9% of universe Low to moderate risk to fundamentals or valuation
34.8% IB clients Immediacy of story: 6 to 12 months
Buy: Expected to moderately outperform market*;
47.1% of universe Moderate risk to fundamentals or valuation
15.2% IB clients OR Expected to significantly outperform market*;
High risk to fundamentals or valuation
Immediacy of story: 12 months
Neutral: Expected to perform in line with market*
15.7% of universe OR Analyst lacks the conviction to recommend purchase
18.2% IB clients or sale of this security
Low, moderate or high risk to fundamentals/valuation
Immediacy of story: 6 to 12 months
Underperform: Expected to moderately underperform market*
1.4% of universe Low, moderate or high risk to fundamentals/valuation
0.0% IB clients Immediacy of story: 12 months
Sell: Expected to significantly underperform market*
0.0% of universe High risk to fundamentals or valuation
0.0% IB clients Immediacy of story: 6 to 12 months
* Relative to S&P 500 for larger capitalization stocks; Russell 2000 for medium
and small caps.
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05mar04 15:59 GMT
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