Curis, a Lexington, Mass.-based biotechnology company focused on the development and commercialization of innovative drug candidates for the treatment of human cancers, and Aurigene Discovery Technologies, a Bangalore, India-based, specialized, discovery stage biotechnology company developing novel therapies to treat cancer and inflammatory diseases, have entered into an exclusive collaboration agreement focused on immuno-oncology and selected precision oncology targets.

The collaboration provides for inclusion of multiple programs, with Curis having the option to exclusively license compounds once a development candidate is nominated within each respective program. The partnership draws from each company's respective areas of experience, with Aurigene having the responsibility for conducting all discovery and preclinical activities, including IND-enabling studies and providing phase I clinical trial supply, and Curis having responsibility for all clinical development, regulatory and commercialization efforts worldwide, excluding India and Russia, for each program for which it exercises an option to obtain a license.

The first two programs under the collaboration are an orally-available small molecule antagonist of programmed death ligand-1 (PD-L1) in the immuno-oncology field and an orally-available small molecule inhibitor of Interleukin-1 receptor-associated kinase 4 (IRAK4) in the precision oncology field. Curis expects to exercise its option to obtain exclusive licenses to both programs and file IND applications for a development candidate from each in 2015.

Ali Fattaey, Ph.D., president and CEO of Curis, said, "The multi-year nature of our collaboration means that the parties have the potential to generate a steady pipeline of novel drug candidates in the coming years. Addressing immune checkpoint pathways now is a well validated strategy to treat human cancers and the ability to target PD-1/PD-L1 and other immune checkpoints with orally available small molecule drugs has the potential to be a distinct and major advancement for patients.

“Recent studies also have shown that alterations of the MYD88 gene lead to dysregulation of its downstream target IRAK4 in a number of hematologic malignancies, including Waldenström's Macroglobulinemia and a subset of diffuse large B-cell lymphomas, making IRAK4 an attractive target for the treatment of these cancers,” said Fattaey. “We look forward to advancing these programs into clinical development later this year."

CSN Murthy, CEO of Aurigene, said, "Our scientists at Aurigene have established a novel strategy to address immune checkpoint targets using small molecule chemical approaches, and have discovered a number of candidates that modulate these checkpoint pathways, including PD-1/PD-L1. We have established a large panel of preclinical tumor models in immunocompetent mice and can show significant in vivo anti-tumor activity using our small molecule PD-L1 antagonists. We also are in the late stages of selecting a candidate that is a potent and selective inhibitor of the IRAK4 kinase, demonstrating excellent in vivo activity in preclinical tumor models."

Curis has issued to Aurigene approximately 17.1 million shares of its common stock, or 19.9% of its outstanding common stock immediately prior to the transaction, in partial consideration for the rights granted to Curis under the collaboration agreement. The shares issued to Aurigene are subject to a lock-up agreement until Jan. 18, 2017, with a portion of the shares being released from the lock-up in four equal bi-annual installments between now and that date.

The agreement provides that the parties will collaborate exclusively in immuno-oncology for an initial period of approximately two years, with the option for Curis to extend the broad immuno-oncology exclusivity.

In addition Curis has agreed to make payments to Aurigene as follows:

• For the first two programs: up to $52.5 million per program, including $42.5 million per program for approval and commercial milestones, plus specified approval milestone payments for additional indications, if any

• For the third and fourth programs: up to $50 million per program, including $42.5 million per program for approval and commercial milestones, plus specified approval milestone payments for additional indications, if any

• For any program thereafter: up to $140.5 million per program, including $87.5 million per program in approval and commercial milestones, plus specified approval milestone payments for additional indications, if any.

Curis has agreed to pay Aurigene royalties on any net sales ranging from high single digits to 10% in territories where it successfully commercializes products and also will share in amounts that it receives from sublicenses depending upon the stage of development of the respective molecule.