#corbus

Corbus Pharmaceuticals Holdings Inc (NASDAQ:CRBP), a Market Exclusive favorite, has been on a 23% tear since Tuesday, August 16. Small $170 million biotechs like this one with no products on the market do not usually make moves like this without a major positive trial readout. Corbus has two big Phase II readouts scheduled for December for its drug Resunab in cystic fibrosis and scleroderma (systemic sclerosis), just over three months from now, but nothing groundbreaking has been reported since Tuesday, at least nothing publicly. So why the big move this week?

It looks like retail traders are following some fairly large insider and institutional moves revealed earlier this week with the SEC, driving the price substantially higher. Stocks like Corbus tend to have low liquidity, so when even a small group of insider-trackers catch word of a major move and decide to follow it, stock gains can and often do happen quickly. They can also dissipate quickly, as has happened before with Corbus, but as we get closer to those two key top line data readouts this December, the chances of shares dropping back down to their previous levels continue to shrink.

It appears that the closer we get to these readouts – and Corbus has yet another with the same drug in 1Q2017 for dermatomyositis – the more insiders and institutional investors step up their purchases. All three trials are double-blinded so there is no way any of these players have direct knowledge of the goings on in the trials, save for an open label extension in the Phase II scleroderma trial granted in April. No results have been reported for that extension yet, but that doesn’t stop investors from speculating one who knows what, if anyone.

Since Q1 this year, insider and institutional ownership in Corbus has exploded higher. From the span of March 31st to June 30th, the number of shares held by institutions filing 13F’s alone has doubled from 5.13 million to 10.24 million. The most notable recent purchase is one of 2,000,000 shares by Chen Bihua of Cormorant Asset Management LLC, constituting a 5.3% ownership of the company. Cormorant is now 3rd in terms of total ownership, behind only Perceptive Advisors LLC with an 8.5% stake, and Knoll Capital Management LP with 6.8%.

More insider buying has also taken place by top executives in the company. CEO Yuval Cohen increased his holdings by 20,000 shares on the 17th. CFO Sean Moran has upped his stake by nearly 150,000 shares on the same day, along with Chief Medical Officer Barbara White, who bought 38,000 shares at $3.15 each.

While the trials are double blinded, that doesn’t mean that anecdotally there isn’t anything that insiders know that we don’t. There is one portion of the scleroderma trial that Corbus was able to get open label approval for from the FDA in April, a good sign that not only does Resunab have a good safety profile, but that patients in the trial want to continue taking it, anecdotally providing evidence of efficacy.

Be that as it may, there is plenty of reason to expect a good top line readout come December for both cystic fibrosis and scleroderma besides the open label extension already granted for the latter. Resunab has already shown a very moderate side effect profile even at high doses, with mild dizziness featured at the top, a common effect of cannabinoids on naïve users. Second, cannabinoids are already known to exhibit strong anti-inflammatory characteristics by inserting themselves into a chain of cellular reactions and stopping the inflammatory response in its tracks. Resunab’s active ingredient, ajulemic acid, is estimated to be 100x more powerful than naturally-occurring cannabinoids in shutting down inflammation.

While none of the diseases that Resunab is being trialed for are caused by inflammation, inflammation is perhaps the biggest factor in worsening the symptoms of these diseases. By shutting the process down, Resunab does not cure the illnesses, but aims to make them much more manageable with less morbidities.

At this point, Corbus is getting much too close to two critical readouts for current gains to quickly evaporate. While it is certainly possible that shares fall back down somewhat on profit taking in the coming days, we don’t see shares going back down below $3 at this point, unless December data proves disappointing in terms of efficacy in cystic fibrosis and scleroderma. Cystic fibrosis results are a little harder to estimate, but the scleroderma indication looks good considering the open label extension already granted.

If only the scleroderma indication is positive come December, Corbus could easily double from these levels by the end of the year to trade above $7. If both are positive, an overnight tripling is possible to trade over $10. With $22 million in cash on recent direct offering, Corbus has more than enough capital to make it past Phase II, and will likely recapitalize at the beginning of next year to push forward with a Phase III pivotal trial.

If both Phase II’s fail to show efficacy, Corbus could move back to penny stock territory, though this is unlikely. For now, all rides on December readouts. Both Corbus insiders and institutional health care investors seem to be betting on good news by the end of the year.

Disclosure: The author was long CRBP at time of writing. 

  Corbus Pharmaceuticals Holdings Inc (NASDAQ:CRBP) just announced that the FDA has granted approval for a 12-month open-label extension study of the ongoing Phase 2 clinical trial of Resunab, its lead clinical candidate. The drug is currently in four separate trials across the US, and the latest extension relates to the systematic sclerosis (SSc) indication – an ongoing trial with topline set for release during the final quarter of this year. Extensions such as the one just granted can offer insight into the performance of a development stage drug ahead of topline. In turn, this insight might be valuable as far as forming a preemptive bias is concerned.

Here’s a look at the drug and the trial in question, as well as what the extension might mean for Resunab in the SSc indication going forward.

Resunab is is a formulation of what’s called ajulemic acid, which is in turn a synthetic derivative of THC. In our bodies we’ve got two types of cannabinoid receptors – CB1 and CB2. There are theories surrounding the existence of extra, novel cannabinoid receptors, but non are confirmed, so they’re not necessary to discuss for the purposes of this piece. CB1 receptors relate mainly to to the central nervous system – they are responsible for many of the psychoactive effects of cannabis use, for example. CB2 receptors relate primarily to the immune system. Their activation impacts the actions of certain elements of the immune system – T Cells, macrophages, etc. – specifically with relation to inflammation. This is great in healthy patients, as inflammation is a key component of the protective side of our immune system. Over activation, however, or overexpression, of these CB2 receptors can lead to a number of inflammatory conditions. Cystic fibrosis is one example. Lupus is another. SSc, which this news concerns, is a third. To simplify, Resunab binds to the CB2 receptors in a patient’s immune system. By binding to the receptors, they block these receptors from activation, and inhibit their ability to send messages to the nucleus of the cells with which they are associated. No messages means no effect. One such effect is inflammation, and this inflammation leads to the symptoms associated with SSc – skin, joint and organ fibrosis.

There are no currently available treatments for SSc, and there are circa 90,000 sufferers in the US and Europe, meaning it’s a big potential market for the company that can get a treatment to market.

So what does the latest news mean? As mentioned, there’s an ongoing phase II trialing the efficacy and safety of Resunab in an SSc indication. It’s a double blind trial, which we’ll talk a little more about shortly, with a patient sample size of 36 spread across 10 US sites.

Safety has been shown to be favorable in preclinical and phase I studies, with AEs like dizziness, vomiting and fatigue being the most prevalent, and only in low single digit percentages of patients across the doses being trialed.

The main focus, therefore, is the efficacy of Resunab in the current phase II, as measured through a primary endpoint of what’s called CRISS, or the combined response index for systemic sclerosis. We don’t yet know how the drug has performed, but the FDA approval of the open label extension gives us a clue. Why? First, what’s an open label extension? We discussed the double blind setup of the ongoing phase II a little earlier. Double blind simply means there’s a group of patients receiving Resunab, and a group receiving placebo, and no one knows which patients are in which arm. By changing this to open label, all patients will know they are taking Resunab, and patients from both arms will have access to the drug, even when the current trial is over. An optimistic analysts would argue there’s only really one reason that the FDA would allow this, and that’s that Resunab is performing well enough in the current trial (and has proven tolerable enough in the past trials) to warrant patients continuing their course of treatment. Not only this, but for those that haven’t yet started a course of Resunab (i.e. the placebo arm) to start doing so.

This is good for Corbus as it gives the company the chance to gather an extra twelve months’ worth of data in this indication, without having to recruit for a whole new trial. It’s good for patients as it allows them to continue on what they feel is an effective course of treatment. Its good for investors, as it offers a little bit of insight into the upcoming data release.

Of course, the FDA could just approve an extension based on the absence of non tolerability. If a drug is safe, why not allow patients to continue taking it? We’ve got to bear this in mind going forward – that the extension approval is an indication that the drug has demonstrated efficacy, but not a confirmation. It does suggest there are no serious AEs that have cropped up as part of the trial, however, and that’s positive in itself.

The takeaway? That the FDA approval of an open label continuation doesn’t confirm efficacy, but it implies it, and all but confirms tolerability. It’s a relatively small sample size, and we’re a couple of years from an NDA in this indication even with a successful topline release and – in turn – a replication of this success in phase III. This said, it’s an interesting development in a space set to draw considerable attention as topline starts to roll out towards the end of 2016.

Noble Financial Capital Markets has initiated coverage of Corbus Pharmaceuticals Holdings, Inc. (NASDAQ: CRBP) with a BUY rating and a 12-month target price of $6.00.

Corbus Pharmaceuticals is a clinical stage drug development company targeting rare, chronic, and serious inflammatory and fibrotic diseases with clear unmet needs. Corbus Pharmaceuticals’ lead product candidate, ResunabTM, is an oral cannabinoid receptor agonist with selective binding to cannabinoid receptor 2 (CB2) expressed on immune cells; ResunabTM has advantages over conventional cannabinoid receptor agonists; therapeutic potential in chronic inflammatory diseases where resolution of inflammation is impaired. Managing Director, Biotechnology Research, Rahul Jasuja, PhD, and Vice President, Biotechnology Research, Kumaraguru Raja, PhD note “ResunabTM may provide a novel approach to fulfill the unmet need in controlling inflammation in cystic fibrosis, as well as in other rare diseases such as systemic sclerosis and dermatomyositis for which there are no approved therapies; Phase 2a trials ongoing in all three indications.”

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Cystic Fibrosis Conference Opens up New Treatment Possibilities

Earlier this month, the Annual North American Cystic Fibrosis Conference (NACFC) took place in Arizona. Among the companies that presented were a range of public pharmas that, combined, cover the full spectrum of in-development cystic fibrosis therapies. CF is a rare disease but a big money maker, as some of the most expensive drugs in the world are CF drugs. Here’s a look at each company, with a discussion on their respective approaches.

The two basic approaches to CF are to treat the malfunctioning gene that causes it, and to treat the accompanying symptoms. Cystic fibrosis is caused by a mutation in the CFTR gene that results in blockages in the CFTR protein – a protein responsible for the channeling of sodium, chloride and water into and out of cells. A blocked CFTR protein means sodium cannot escape, which in the lungs leads to a buildup of thick salty mucus. The thickened mucus serves as an ideal breeding ground for bacteria, and also causes blockages, leading to the common CF symptoms of chronic infection and inflammation. The first approach attempts to reverse or at least lessen the impact of the genetic defect leading to a better regulation of sodium and chloride transportation. The second targets the symptoms, attempting to treat infection and reduce inflammation. Each approach has its advantages and disadvantages, as we will soon see.

Corbus Pharmaceuticals Holdings Inc. (CRBP)

Corbus Pharmaceuticals Holdings, Inc. (CRBP is one of the few companies that is developing a treatment of CF symptoms, specifically the inflammation associated with CF. Its lead candidate is Resunab, an oral therapy that tags the CB2 receptor, a natural pathway towards shutting down the inflammatory response. Resunab is a synthetic analog of the body’s normal CB2 activators, but between 50 and 100 times more potent. This reduces inflammation in the lungs without systemic immune suppression. What Corbus is trying to prove is that reduced inflammation leads to an improved FEV1, the gold standard primary endpoint in CF clinical trials. FEV1 is a measurement of lung function by volume of expelled air in the first second of exhalation.

That Corbus is targeting this endpoint may seem counterintuitive rather than say, targeting a measurement of inflammation in the lungs. After all, Resunab is designed to lessen inflammation, so why not measure that? The answer is that it is much harder to measure exact inflammation levels and whether or not a certain level corresponds with improved clinical outcomes. This would be technically termed pulmonary exacerbation, and it may differ from patient to patient. A pulmonary exacerbation is a common event in CF sufferers, and refers to a temporary worsening of symptoms. To measure this would require years of follow up. The FEV1 endpoint can be measured much more quickly, cheaply, and objectively.

Corbus is trialing Resunab in an ongoing phase II, for which the first patient enrolled during the middle of September. Primary endpoint is safety, and the secondary efficacy as measured by FEV1.

A further advantage of the anti-inflammatory approach is that it would theoretically apply to all CF mutations, since all exhibit the same inflammation problems. Drugs that seek to correct protein function are mutation-specific, and need to demonstrate efficacy on each separate type of CF mutation. Resunab would theoretically apply across the board.

Vertex Pharmaceuticals Incorporated (VRTX)

Vertex is already pretty advanced in the space, with two candidates already having reached commercialization – Kalydeco (ivacaftor) and Orkambi (lumacaftor plus ivacaftor). Both of these treatments target the underlying gene defect as opposed to the inflammatory side of the disease. Ivacaftor is what’s called a CFTR potentiator, which means its mechanism of action is to keep the CFTR channels open. In doing so, it promotes chloride and sodium transportation, helping clear mucus buildup. Lumacaftor is involved in the protein folding of a specific type of CFTR protein (F508), working to inhibit misfolding and promote normal CFTR protein production. So far, Orkambi is approved for patients aged 12 and over who have two copies of the F508 mutation that causes misfolding, but the company is looking to expand the target population with an ongoing phase III in patients aged 6-11. Primary endpoint on this one is safety – as efficacy has already been demonstrated across the elder population trials. Kalydeco has approval across a range of CF mutations, and again the company is looking to expand this population, having announced earlier this month that the FDA had accepted its supplemental NDA for CF sufferers aged two and over who have any one of 23 specific mutations.

There are many different types of mutations that cause a CFTR genetic mutation. The FDA approves treatments for one specific mutation at a time, meaning one approval can be focused on a relatively small population. However, with supplemental trials, companies like Vertex can demonstrate efficacy across different mutations and gain approval expansion. Additionally, it can combine therapies (the combination of lumacaftor and ivacaftor is an example of this) to target new mutation types. The company’s lead trial candidate is a further example of this combination therapy, with a trial of VX-661 in combination with Ivacaftor already well underway in phase III. Enrollment is expected to complete mid 2016, and could be a positive catalyst to keep an eye on going forward.

Concert Pharmaceuticals, Inc. (CNCE)

Concert is an interesting one, as its lead CF candidate is an analog of Vertex’s Kalydeco, which has been “deuterated”. Deuterium is an isotype of hydrogen with an extra neutron, an atom that happens to be used as fuel for nuclear reactors. Concert hypothesizes that this extra neutron enhances a treatment’s half life, bioavailability and metabolic profile, and so switching out the hydrogen atoms with deuterium, hence deuterating a particular treatment, can improve upon its efficacy by increasing potency. Obviously, this type of development is far cheaper and quicker than development from scratch, which makes Concert’s approach quite compelling in terms of originality.

At the conference, Concert presented the results of a phase I ascending dose trial of CTP-656, its deuterated version of Kalydeco, in which the company compared the former to the latter. Initial results are intriguing, demonstrating an extended half life, higher blood plasma levels at both 12 and 24 hours (higher plasma levels is associated with an improvement in the condition) and a reduced rate of clearance of the drug, meaning it stays in the blood longer, improving bioavailability. The company is looking to move into a phase II after it completes a second phase I, with the latter being a dose escalation set to start this quarter and finish during the first half of next year. The big question for Concert will be weather Vertex challenges its use of Kalydeco from a legal standpoint. As yet, there has been no indication that this will happen, but this is biotech, so the possibility is very real.

Synergistic Possibilities

As a final note, its worth highlighting the possibility of a new combination therapy as Orkambi is. The synergy possibilities between the inflammation suppressing approach and the CFTR-correcting approach are obvious, at least conceptually. A collaboration between Corbus and either Vertex or Concert is also a possibility. As yet, there is no single therapy that targets both the underlying cause of CF and the associated inflammation that worsens it. If Corbus can combine its Resunab candidate (assuming it can demonstrate efficacy in the ongoing phase II) with Kalydeco, for example, or CTP-656 on approval, the treatment could be the first to target both the cause and its exacerbating symptoms.

The more likely combination is with Vertex, as this would give Corbus the possibility of targeting a larger population than would a partnership with Concert, based on the assumption that a partnership with the former would open up the possibility of both a Kalydeco and an Orkambi combination. This is speculative, of course, but worth thinking on as the space advances.

It is also possible that no partnership will be needed, given that physicians may simply choose to prescribe both together on their own accord.