Good day, ladies and gentlemen, and welcome to the Curis First Quarter 2010 Earnings Conference Call. My name is Regina, and I will be your operator for today. At this time, all participants are in a listen-only mode. Later, we will be conducting a question-and-answer session. (Operator Instructions) As a reminder, today’s conference is being recorded for replay purposes. I would now like to turn the conference over to your host for today, Mr. Mike Gray, Chief Operating Officer and Chief Financial Officer for Curis. Sir, you may begin.

Okay. Thank you. Good morning and thanks, everyone for joining us. Today, we’ll provide as usual corporate update and we’ll also discuss our first quarter 2010 financial results. Before we begin, I’d like to advise you this conference call contains forward-looking statements regarding our future expectations, plans and prospects within the meaning of the Private Securities Litigation Reform Act of 1995, including statements related to the following; the expected progress of our Phase I clinical development candidate, CUDC-101 and our timetable for selecting an additional development candidate from our targeted cancer programs; statements regarding our and our collaborators’ expectations concerning the further development of our Hedgehog pathway inhibitor program under collaboration with Genentech, as well as our Hsp90 technologies that are licensed to Debiopharm, including the timetable for regulatory filings and other clinical development milestones under those programs; as well as our expected 2010 administrative expenses. Actual results may differ materially from those indicated by these forward-looking statements as a result of various important factors, including risks relating to our ability to successfully advance the research and clinical development of our clinic of our targeted cancer programs, including CUDC-101; Genentech’s ability to successfully advance clinical trials of GDC-0449; and Debiopharm’s ability to progress Debio 0932 through Phase I clinical testing; competitive pressures; our need to maintain our proprietary rights; our ability to successfully continue our collaborations with Genentech and Debiopharm, as well as to enter into new collaborations on favorable terms, if at all; unplanned operating expenses; our need to raise additional funds to finance our operations and other risk factors described in our Annual Report on Form 10-K for the year ended December 31, 2009, and other reports we periodically file with the SEC. We caution you that we are making these forward-looking statements as of today and that we may not update any of these statements even if events and development subsequent to the date of this call cause these estimates and expectations to change. I’d like to now introduce, Dan Passeri, Curis’s President and CEO, who will discuss our corporate highlights and provide an update on our pipeline. Following Dan’s remarks, I will return to review our financial results for the first quarter of 2010 and then, we’ll open the call to any questions. Dan?

Yeah, thanks, Mike. Good morning and thank you for joining us today. The beginning of 2010 has been a highly active period for Curis with our collaborators and our internal team making significant progress in advancing all of our key development programs. I’ll first provide a general overview of some central highlights and then, elaborate upon further details of the specific programs. Our collaborators, Genentech and Debiopharm continued the clinical progress of their respective drug candidates in development. And I’ll start with an overview of the Hedgehog program, which is under collaboration with Genentech. Roche, as a 100% owner of Genentech recently provided a clinical development update of GDC-0449, which is first-in-class Hedgehog pathway inhibitor. During that update, Roche indicated that it expects data from the ongoing Phase II first-line metastatic colorectal cancer study to be available in mid-2010 and that it intends to initiate a Phase II trial of GDC-0449 in operable basal cell carcinoma or BCC patients in the second half of 2010. So we’re very excited about that update. I’ll give you some more details in a moment. Roche also indicated that it expects results from the ongoing Phase II clinical trial in advanced ovarian cancer patients during the second half of 2010 as well as results from the pivotal Phase II clinical trial in advanced BCC in 2011. We look forward to these important results in 2010 and 2011 as well as the initiation of the Phase II clinical trial in operable BCC patients during the second half of 2010. So obviously, we are approaching a very important timeframe for the company. Our licensee, Debiopharm has also continued to advance Debio 0932, which is a single molecule heat shock protein 90 or Hsp90 inhibitor that was discovered by Curis’ scientists and licensed to Debiopharm in August…

Okay. Thanks, Dan. Just go briefly through our first quarter 2010 financial results. We reported a net income of $4.8 million or $0.07 per basic share outstanding, $0.06 per fully diluted share outstanding for the first quarter of 2010, as compared to net income or $1.1 million or $0.02 per share on both the basic and fully diluted basis for shares outstanding for the same period in 2009. Our revenues for the first quarter of 2010 were $12.6 million, as compared to $6 million for the same period in 2009. The increase in revenues from 2009 was primarily due to the recognition of $8 million in license fee revenue that Dan mentioned during the first quarter of 2010, upon the achievement of a development objective under our license agreement with Debiopharm. We also received settlement proceeds of $4 million from Micromet, a former collaborator upon settlement of an arbitration claim relating to a 2001 agreement between the parties, that’s including revenue as well. During the first quarter of 2009, we received and recognized $6 million in license revenue as a result of Genentech’s initiation of a pivotal Phase II basal cell carcinoma trial. Operating expenses for the first quarter of 2010 were $6.9 million, as compared to $5 million for the same period in 2009, research and development spending was $2.5 million for the first quarter of 2010 versus 2.9 million in the same period in ‘09. The decrease is primarily attributable to lower spending on Debio 0932, the Hsp90 program and as a result of licensing this program to Debiopharm in August 2009. Debiopharm has paid all subsequent development costs since that license date. Offsetting this decrease, we increased our spending on our other targeted cancer programs. G&A spending was $4.4 million for the first quarter of 2010, as…

(Operator Instructions) Your first question today, comes from the line of Brian Skorney with ThinkEquity.

Just a couple of quick questions here. Starting with the 0449, can we take anything away from Genentech’s initiation of the new BCC trial as far what the safety profile looks like in the Phase II trials? I assume they’re getting safety data from those studies and it would seem that to go into a more benign cancer setting, they need to really clean profile, any comments on that?

What we have seen to-date is the drug appears to be very well tolerated despite daily chronic exposure, no dose limiting toxicity has been observed. There are some AEs that have emerged, but I think, that all of them are transient and then, if you take the drug away temporarily, the AEs resolve. So I think, this is indicative of the fact that Hedgehog is a typically a developmental embryonic pathway where it’s abundantly expressed and it is expressed at very low base levels in tissue maintenance. I think, that’s the reason it’s so well tolerated where the tumors are expressing high levels of the pathway. So we agree with your sentiment, the fact that they are going into a more benign setting. In fact, this could dramatically expand the market potential of the drug as well. But I think that is indicative of the safety profile that’s been observed in the advanced metastatic study.

And then, when we look at the extension of the 101 trial, you mentioned that you’ll be looking at gastric, head and neck, breast and liver cancer. Are you guys planning to stratify enrollment in those or are you going to look to do a quarter, a quarter, a quarter or is it, just, whoever comes into the trial if they can get, you will take?

Yes, so it will be those four indications and they are going to be, what we are estimating is 10 patients per indication. And we are also going to be serving two different dosing schedules. So the objective is to get a more robust representation. So we are very intrigued and pleased with the fact that in the dose escalation all-comers trial, we did see response in some tumor types that reflected the preclinical data. So we were anticipating response in head and neck, and gastric based on preclinical data. So we are very pleased with those results in the stable disease and the breast cancer patients also correlates with what we were expecting from our preclinical data. We didn’t treat any liver cancer patients as far as I know in the dose escalation, but we’ve had very impressive xenograft data with liver cancers, that’s why that’s included as well.

And Mike, just a quick housekeeping question, I might have missed this in your comments at the end. So for, I think, you previously said G&A guidance is 8 to 9 million, should we include the legal costs and the 0.5 million in performance-based compensation?

Yeah, I did bump that up to 9 to 11.

Your next question comes from the line of Joe Pantginis with Roth Capital Partners.

Quick question on 101 and then, a follow up on 0449 please. Can you give a quick review again with regard to what the prominent DLTs that you did see? And secondly, I might have missed this, you were giving the doses for the different responses, but what was the dose of the patient that saw the PR in advanced gastric patient?

Yes, so, the dose that the patient had the confirmed PR was at 275 milligrams per meter squared. And in terms of the DLT, the DLT that emerged at 300 milligrams per meter squared was a Grade 2, which is not normally considered a DLT. So I’ll explain that in a moment. It was a Grade 2 creatinine level. The key here was it was seen after one infusion, so one dose resulted in going from baseline to a Grade 2. So the definition of a DLT is that the patient does not receive the drug for each consecutive day during the dosing cycle. So the fact that the creatinine level went up to Grade 2, patient did not receive drug the following day that defined it as a DLT. What’s encouraging is that this observation is manageable. What we learned through surveying additional patients at that dose level is we could actually keep them on 300, if they were hydrated and the creatinine levels would come down or we could keep them on drug, but at a lower dosing level. If you went below 300, the creatinine levels come down. So what’s encouraging is this is a manageable toxicity. I’d also underscore that this is a similar profile what you see in other HDAC inhibitors you have creatinine level increased, for instance in SAHA, it’s on the label. So we are encouraged that it’s a toxicity that can be identified and managed and the patient can remain on drug. We are also encouraged by the therapeutic window that we believe we have between 150 and 275, which gives the physicians some flexibility.

Sure. That’s great. And we are looking forward to the expanded Phase I et cetera. Just a quick follow-up on 0449, there is a, I guess, you might call it a placeholder for ASCO, the title of the study is safety of the colorectal study. Could we sort of interpret that as a placeholder and that’s where we might get the data?

Yes, I think, the intention is that will be a safety presentation only as of a planned interim safety look.

Your next question comes from the line of Jason Kantor with RBC Capital Markets.

Is it going to be unblinded safety data and patient demographic data that we’re going to get at ASCO?

I think, there will be data presented on two arms. I think, we’ll allow Genentech to present that data in a month. I don’t think we can comment further on that right now.

Okay. And then, you mentioned a milestone or payments from Genentech, I mean, what that was for and when that came in?

Well, that was actually just I think you’re talking about my financial review, Jason. It was just a year-to-year comparison. So that was for the initiation of the advanced BCC trial which is ongoing, but that was Q1 ‘09....

That was last year?

Yeah, yeah.

Okay. And then, in terms of anything else from your pipeline that may go into the clinic? What’s your next clinical candidate and what’s the timeline on that?

Yeah, so the next clinical candidate will be most likely selected from the PI3 kinase, HDAC class of compounds. And the timing of that, Jason, is likely to be mid-year to early second half and then, obviously, the toxicity studies and the IND prep, we would forecast filing the IND within 12 months of that selection.

So second half of 2011?

Yeah, mid 2011 to second half.

And then, you mentioned some possible milestones from Genentech, what are the next set of milestones from Genentech?

Yes, we’ll receive milestones for each of the Phase III initiation with 0449. So if colorectal goes into Phase III, that will trigger a $6 million payment and likewise with the ovarian. And then, with the NDA submission for the BCC trial, that will be an additional milestone, that’s north of that.

But Jason, if you recall, there is about $115 million, 1-1-5 million dollars associated with the small molecule 0449 and milestones we received, 18. So we still are roughly a 100 million left on this drug.

Your next question comes from the line of Ted Tenthoff with Piper Jaffray.

Lots of things to discuss. I’m thinking about things a little bit more at the kind of 30,000-foot view here. You’ve done some nice partnerships here and have some additional assets progressing. How are you guys looking to sort of strategically fund and/or partner the pipeline, in particular some of the earlier stage assets going into proof of concept and things along those lines?

Yes, very important question, Ted, and what we’ve attempted to achieve is a balanced approach where we’ve had a deep pipeline, where we have no intention of raising additional money until we make significant progress in a number of strategic areas. So the Genentech program is obviously important from a momentum standpoint, and we are looking forward to that readout, midyear. 101, our objective there is to demonstrate a robust body of data showing that this multi-target inhibitor approach i.e. network disruption, which we do believe is the shifting paradigm in cancer therapy when you look at all those combination trials. Our objective there is to compile a data package that demonstrates that the drug is knocking out a network for a more robust response and we believe we should be able to achieve that within the next 12 to 18 months. Our preclinical pipeline, that’s budgeted right now. So we have enough cash to get well into the first half of 2012. We will look strategically at a number of alternatives and pursue in parallel a number of options and then, at that time, determine which one is the most attractive to represent our shareholder interest. So we can pull in non-dilutive capital without giving up too much upside that would preferable. So we are looking at, for instance, territory carve out possibilities or shared risk strategies.

The only other thing that I would add, Ted is that Genentech data in particular will proceed fairly significant milestones. So within this, basically, more or less two year cash life that we have right now, we have the opportunity to extend it significantly with these milestones.

Your next question comes from the line of Ling Wang with Brean Murray.

It seems to me for the Phase II BCC trial, the timeline for data reported is certainly pushed out to 2011. Can you give us some indication for that? Is this matter of a enrollment completion later than expected or the current data, the initial data that is somewhat different from what we expect?

Yeah, I think, we’re generally trying to project sort of straddling the end of 2011. So having this, sorry, the end of 2010, into 2011 for Genentech data. I don’t think it’s necessarily slipped all that much, Wang. I think, it will probably be earlier 2011 than later 2011, since Genentech or actually Roche in its last update did say, as I think Dan mentioned that they are still playing on NDA submission in 2011 or that they could file an NDA submission if the data is positive, so that would hint that it has to be in the earlier side of 2011.

I see. And also for that trial, there are some secondary endpoint with, like PFS or survival, that don’t need longer follow-up. I was wondering what data that would be sufficient for the NDA filing? Will they have to wait for a dose, or definite endpoints to mature or...?

I don’t think so. No, I mean, that wouldn’t be as you mentioned, that would take a longer time. I think, Genentech hasn’t really provided guidance on what the response rate as a primary endpoint, they haven’t provided guidance on what they think would be suitable to file on NDA. So I think, we probably won’t comment further, but the response rate that was observed in the 33 patients that we reported in the last fall in The New England Journal of Medicine was about 55%, 56%. So the early clinical data is definitely very encouraging.

Yeah, so when you couple that with the fact this patient population that has no therapeutic alternative, I think, it’s boding well.

Okay and then just lastly, from your understanding because in this Phase II trial there are two different patient population. Will they be revealed separately or as a whole?

We don’t have clarity on that right now.

The next question comes from the line of Ren Benjamin with Rodman.

Just a couple of questions, primarily having to do with timing, the Phase IB cohort, can you just talk to us a little bit about when exactly this is going to start? Has it already started? Do you plan on initiating some new sites so that enrollment can be quite robust? And how long do you think this planned cohort expansion would take?

(Inaudible) So let me start with the last part of that, how long? We are expecting we should be able to complete it in a 12 month period. It will be a little bit longer (Inaudible) I apologize for the interference. We’ve got some interference on the phone. In terms of the initiation, Ren, we are in the process now of launching. So we are hopeful that month and a half, we should be starting to treat patients. We have several clinical sites identified and the investigators are optimistic about the ability to rapidly enroll patients. So we are hopeful we will be able to complete that expansion cohort in a 12-month period.

And Ren, just to add on that, in the Phase I, as you are aware, we had two sites, but nearly the majority of the patients I think, I’d say, 21 out of 25 came from one of the centers. So we are definitely trying, we are aware of that, trying to balance this out among more sites. We’ve sent the protocol to (Inaudible) sites and we’ve already heard back from a couple, indication of interest and working on contracts with the first of those. So I think we’ll initiate and we will have a larger number of sites to help us enroll this quicker.

You may have said this and I missed it in the translation, how many sites total would you like to have?

Five.

Five.

Five, got it. Okay. And then, regarding the responses that you have seen, I think, in the end of the year call, you had mentioned the SD, the stable disease that had greater than 20% reduction in tumor load, probably on their way to a PR after two cycles. Some time has passed since that last update, correct me if I am wrong. Is the person still on drug, have they gone through maybe three or four cycles yet and is the response increasing or have they come off study?

Yes, so the short answer to that is the come off study and I will give you the details now. The patient was the very last patient enrolled. We saw a greater than 20% reduction after two cycles which was very encouraging. This patient unfortunately was a very advanced head and neck cancer patient with a very large tumor in the oral cavity, they were actually on a feeding tube. They had a come off study for other complications that had nothing to do with the drug. So unfortunately, we were not able to continue dosing.

Okay. Switching gears quickly to the Hsp90 program and I apologize if you’ve already answered these questions when I got dropped off the call. And again, having more to do with timing, the trial is initiated, I am assuming that the first five patients haven’t been enrolled yet since we haven’t seen a press release for the milestone, final milestone payment. Is that correct?

That’s right, yes. And it will be a standard dose escalation, so the first three patients will have to get through safely and then basically the second patient in the second cohort.

Got it. And has Debiopharm provided any additional clarity as to just how long this trial could last? And when we might see some data from this trial?

Yes.

Yes, that’s standard 12 to 18 months timeframe. They are actually going to be doing a very deep robust survey, to follow, total number of patients to go up to 80, I mean, they are basically testing in every other day which is I think more of the traditional Hsp90 dose schedule...

All right.

For oral Hsp90 and daily based on the...

Right.

The preclinical safety profile. But that’s an important attribute of the trial design. They are going to be surveying two dosing schedules, Ren, to look at the safety profile every other day and that’s very much supported by preclinical data where the PK and the plasma is substantially different from the tumor, and the tumor, the drug is degraded at a much lower rate. So that it is in favor of an every other day dosing schedule where you would have it cleared in the plasma and retained in the tumor. However, the drug did have a very attractive safety profile, so they are also trying everyday dosing and as Mike stated it’s up to 80 patients

For every other day and every day?

Yeah.

To 80 patients and I apologize, can you just remind me of the entire schedule, is it three weeks on, one week off, how is that looking?

I would rather actually clarify that to make sure I am accurate and get back to you on that. I don’t want to say something that’s inaccurate. I don’t recall the specifics of it.

No worries, just one final question on the preclinical pipeline. There was a lot of interest at AACR this year and there were probably rows of posters having to do with companies developing combination drugs or all-in-one drugs and knocking out multiple pathways, so your network disruption, I mean hypothesis has caught on fire. Have you gotten any inbound calls or are there any discussions right now with potential pharma partners even at a preliminary stage or is this one of the assets given your cash positions, is this one of those assets that you would rather see develop a little bit further along, let’s say into the clinic Phase I or Phase II before entertaining partnering discussions?

So it’s certainly in that category. We want to hold on to this as long as we can. We do believe that this represents a potential breakthrough approach. We do not want to just license this out to a pharma company at this point, but to qualify the first part of your question, we are getting significant amount of interest and inquiries as to the drug’s activity and I do believe that this approach is really starting to take route in the field. I think, when you look at the clinical observations of a number of these highly specific inhibitors, the data clearly suggests that a specific node of intervention is albeit attractive in that it’s targeted, it’s not enough. You need to hit the network. And it’s going to follow a suit much like what we saw with HIV therapy where they use cocktails. So there is a growing interest in this concept, the fact that our preclinical data shows a very robust suppression of the network is starting to raise some eyebrows and I think, a number of pharma companies are watching the clinical trial data carefully.

Your next question comes from the line of Jason Kantor with RBC Capital Markets.

Thanks for taking my follow-up. Just wanted to make sure I understood on the P&L, so are you showing the full 4 million from Micromet on the top line?

Yes, it’s flowing through revenue.

Okay. So when we look at the four plus eight, that’s pretty much most of your revenue there?

Yes.

Ladies and gentlemen, this concludes the question-and-answer portion of the call. I’d like to turn the call back over to Mr. Passeri for closing remarks.

Well again, thank you very much for your attention. This is a very exciting and important period for the company and we look forward to giving you updates as they become available. Thank you again.

Ladies and gentlemen, thank you for your participation in today’s conference. This concludes the presentation and you may now disconnect. Have a wonderful day.