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GENENTECH, CURIS STOP ENROLMENT IN BASAL CELL CARCINOMA DRUG TRIAL

July 17, 2006

Curis and Genentech have halted enrolment in a basal cell carcinoma Phase I clinical trial, and have made a decision not to move forward with the drug in its current formulation. This decision does not affect the ongoing collaboration between Genentech and Curis pursuant to which the parties are conducting research on treatment of solid-tumor cancers.

The Phase I study enrolled patients into three segments: Segment 1, in which patients were randomized to receive treatment or placebo at one of four dose levels; Segment 2, in which additional patients were randomized to the maximum tolerated dose from the Segment 1; and Segment 3, a pharmacodynamic marker segment to evaluate biologic activity of the molecule.

Although histological clearance was observed in two subjects in Segment 1, the clinical activity seen was far less than anticipated. The results from Segment 3 of the study showed that the formulation did not down-regulate the targeted pharmacodynamic marker in the tumor, suggesting a possibility that the drug candidate may not be adequately penetrating the skin.