CRBP : Corbus Pharmaceuticals Holdings Stock Analysis and Research Report

2017-10-19 - by Asif, Contributing Analyst

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Corbus Pharmaceuticals is a clinical stage pharmaceutical company, focused on the development and commercialization of novel therapeutics to treat rare, chronic and serious inflammatory and fibrotic diseases with clear unmet medical needs. Its product anabasum is a novel synthetic oral endocannabinoid-mimetic drug that is intended to resolve chronic inflammation and halt fibrotic processes without causing immunosuppression.

Anabasum is a synthetic, rationally-designed oral small molecule drug that selectively binds to the cannabinoid receptor type 2, or CB2, found on activated immune cells, fibroblasts and muscle cells. Anabasum stimulates the production of Specialized Pro-Resolving Lipid Mediators (SPMs) that act to resolve inflammation, and halt fibrosis by activating endogenous pathways. These endogenous resolution pathways are normally activated in healthy individuals during the course of normal immune responses but are dysfunctional in chronic inflammatory and fibrotic diseases. Through its’ activation of the CB2 receptor, anabasum is designed to drive innate immune responses from the activation phase through completion of the resolution phase. The CB2 receptor plays an endogenous role in modulating and resolving inflammation by, in effect, turning heightened inflammation “off” and restoring homeostasis.

Anabasum is currently being developed to treat four life-threatening diseases: systemic sclerosis, cystic fibrosis, diffuse cutaneous, skin-predominant dermatomyositis and systemic lupus erythematosus (“SLE’’). The United States Food and Drug Administration (“FDA”) has granted anabasum Orphan Designation as well as Fast Track Status for both cystic fibrosis and systemic sclerosis. The European Medicines Authority (“EMA”) has granted anabasum Orphan Designation for both cystic fibrosis and systemic sclerosis.

In November 2016, Corbus reported positive clinical data in a Phase 2 anabasum study for the treatment of systemic sclerosis. Following an end-of-Phase 2 meeting with the U.S. Food and Drug Administration (“FDA”), Corbus submitted a protocol to the FDA on March 31, 2017 for a Phase 3 study in systemic sclerosis. Corbus also received protocol assistance from the EMA on the Phase 3 study design. Corbus expect to commence the Phase 3 study in systemic sclerosis in the fourth quarter of 2017.

In December 2016, the company completed a Phase 2 study in cystic fibrosis study and at the end of March 2017 the company reported positive top-line data from this study. Corbus is in the process of developing the protocol design for the next clinical Phase 2b clinical trial and have received guidance on the design of the clinical protocol from the Cystic Fibrosis Therapeutic Development Network. Corbus also plan to obtain guidance from the FDA and the EMA on the clinical protocol design. Corbus are planning to initiate a Phase 2b trial in cystic fibrosis by the end of 2017.

A third Phase 2 study in dermatomyositis of anabasum is expected to be completed in the fourth quarter of 2017 and a fourth Phase 2 in SLE is planned to start during the fourth quarter of 2017.

Since its inception, Corbus has devoted substantially all of its efforts to business planning, research and development, recruiting management and technical staff, acquiring operating assets and raising capital. Its research and development activities have included conducting pre-clinical studies, developing manufacturing methods and the manufacturing of its drug anabasum for clinical trials and conducting clinical studies in patients. Three of the four clinical programs for anabasum are being supported by non-dilutive awards and grants. The NIH is funding the majority of the Phase 2 clinical development costs for the dermatomyositis and SLE clinical trials and the Phase 2 clinical trial in cystic fibrosis has been supported by a $5 million award from the Cystic Fibrosis Foundation Therapeutics, Inc. (“CFFT”), a non-profit drug discovery and development affiliate of the Cystic Fibrosis Foundation.

Financial Operations Overview

Corbus is a research and development company and have not generated any revenues from the sale of products. Corbus has never been profitable and, from inception through June 30, 2017, its losses from operations have been approximately $48.0 million. Its net losses for the three months ended June 30, 2017 and 2016 were approximately $7,297,000 and $4,189,000, respectively and for the six months ended June 30, 2017 and 2016 its net losses were approximately $14,762,000 and $7,082,000, respectively. Corbus expect to continue to incur significant expenses and increasing operating losses for the foreseeable future. Corbus expect its expenses to increase significantly in connection with its ongoing activities to develop, seek regulatory approval of and commercialize anabasum. Accordingly, the company will need additional financing to support its continuing operations. Corbus will seek to fund its operations through public or private equity or debt financings or other sources, which may include government grants and collaborations with third parties. Adequate additional financing may not be available to it on acceptable terms, or at all. Its failure to raise capital as and when needed would have a negative impact on its financial condition and its ability to pursue its business strategy. Corbus will need to generate significant revenues to achieve profitability, and the company may never do so.

Corbus expect to continue to incur significant expenses and increasing operating losses for at least the next several years. Corbus expect its expenses will increase substantially in the remainder of 2017 and in the future in connection with its ongoing activities, as Corbus:

  • conduct clinical trials for anabasum in scleroderma, cystic fibrosis, systemic lupus erythematosus and other indications;
  • continue its research and development efforts;
  • manufacture clinical study materials and develop commercial scale manufacturing capabilities;
  • seek regulatory approval for its product candidates;
  • add personnel to support development of its product candidates; and
  • operate as a public company

Important Note: This research report is incomplete.
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