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First Eagle Investment Sells Stake in Curis Inc. at Steep Loss

- By Holly LaFon

First Eagle Investment (Trades, Portfolio) Management axed 90.99% of its stake in Curis Inc. (CRIS) on Dec. 31 as the stock hovered near all-time low prices, the New York-based firm disclosed Wednesday.


First Eagle's sale of 4,532,448 shares of the cancer-treatment company shrank its equity ownership to 1.35% from 15.04%. The firm's price per share sold was around 69 cents, the stock's second-lowest level since it began trading in August 2000.

First Eagle began buying the stock before the first quarter of 2009 (the earliest GuruFocus data) and paid an average of $9.47 per share for all purchases in the following years. GuruFocus estimates its loss on the position around 56.09%.

Shares of Curis Inc. tumbled 51% in the month following its third-quarter earnings announcement on Nov. 3, when management said the company would lay off employees and reduce its expenditures and pipeline.

"... We recognize that our forecasted cash burn was not sustainable," Curis president and CEO James Dentzer said in a call with analysts.

Meanwhile, its revenue for the quarter totaled $2.8 million, an increase from $2.4 million the same quarter of 2017. The company also reported a net loss of $7.2 million, or 22 cents per share, versus a net loss of $15.5 million, or 53 cents per share, in the prior-year quarter.

Going forward, Curis said it planned to redirect attention to its three first-in-class candidates that "have the potential to be significant and innovative" cancer treatments. Each of the drugs is expected to have critical efficacy data from their clinical development released in 2019.

Curis' balance sheet also reflects $30.83 million in cash and cash equivalents. It holds $30.2 million in long-term debt.

Only one other investor tracked by GuruFocus continued to hold shares of the company in the third quarter, quantitative investor Jim Simons (Trades, Portfolio), who increased his position by 30.7%. Steven Cohen (Trades, Portfolio) sold out in the third quarter.

Curis shares have posed a resurgence in 2019, but remain under a dollar. The stock advanced 32% year to date. After a 9.26% drop on Thursday, it closed at 98 cents per share.

First Eagle Investment (Trades, Portfolio) Management is an independent firm with $111 billion in assets under management whose leaders include legendary investors Jean-Marie Eveillard and Bruce Greenwald. Its varied funds share an emphasis on absolute returns and downside protection.

First Eagle had only 6.26% of its firm-wide portfolio in health care at the end of the fourth quarter, making it the sixth-largest sector represented. The firm's largest holdings are: Oracle Corp. (ORCL), Exxon Mobil Corp. (XOM) and Nutrien Ltd. (NTR).

See First Eagle Investment (Trades, Portfolio) Management's portfolio here.

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This article first appeared on GuruFocus.