Corbus Pharmaceuticals: A High Likelihood of Fail

7/6/2020 Preview - Contributor Center | Seeking Alpha
Corbus Pharmaceuticals: A High Likelihood Of Fail

Jul. 6, 2020 11:31 AM ET
by: Mehdi Mehdiyev
Summary
Lenabasum has more than 20 years of history with

no detailed proof of concept.
CB2 agonism is unlikely to significantly improve the

condition of patients with dcSSc.
The company has less than a quarter of cash

runway.
Phase-3 fail may bring Corbus' stock price to

cash/per share level.
Corbus Pharmaceuticals (Nasdaq: CRBP) is

Massachusetts based company focused on targeting
endocannabinoid system in the treatment of
inflammatory diseases.
In this article we will try to assess the prospects of

company’s lead drug candidate Lenabasum in the late
stage RESOLVE-1 trial. We will try to share our thoughts
on vague prospects of the company’s drug and to explain
our pessimism regarding Corbus’ approach.
Moreover, the company has an alarming cash position

currently and the possible failure of the Phase 3 study
may bring the company's share price below $ 1.
From this point of view, Corbus is an attractive short for

us.
Zigzags of Lenabasum
Lenabasum is company's lead drug candidate in Phase-3
for the treatment of diffuse cutaneous systemic clerosis
(dcSSc).
https://seekingalpha.com/submission/preview/5468934 1/20
The company claims that Lenabasum is CB2 receptor

agonist, however we didn't find any scientific publication
proving MOA of the drug. Moreover, the company didn't
share detailed pharmacodynamics (PD) and
pharmacokinetics (PK) of lenabasum.
Lenabasum has a long history of uncertainties and

zigzags in its development. Let’s have a look at some
key milestones:
Source: created by the author based on relevant

publications and company's press releases
In terms of company history and lenabasum phase-2

assessment, we recommend reading the articles by
@Alpha Exposure here and here.
We think that it was deeply analyzed by the author

before, so we are not going to take your time with diving
more into the past of the company, but just want to
briefly share some concerning points:
In each case of a new clinical trial, it is obvious that

the company was in no hurry to conduct them. In
many cases, their “positive” press releases followed
with additional dilutive fund raising. For example,
dermatomyosis Phase-2 trial (started in 2015) was
designed for 16 weeks (112 days) but it took almost
2 years to conduct the trial for A cohort and then
extend the trial again. Of course, the company can

claim that it’s a rare disease and it was hard to enroll
patients. But we are talking about 22 patients
(planned enrollment) while there are about 9.63
cases per million people with this disease in US
alone.
The company had multiple Phase-2 trials for cystic
fibrosis but continued to share positive results of IN-
VITRO and PRE-CLINICAL studies in 2017 and 2018
following them with dilutive fund raise:
Source: press release by Corbus Pharmaceuticals
Let us emphasize that Phase-2 trial was completed 3

months prior to this PR and the market was expecting
Phase-2 data in Q1 2017.
Despite the fact that it’s almost 18 years since the

drug entered first in human trial, the company didn’t
share proper PK/PD data for this compound. We still
have no idea about pharmacodynamics and
pharmacokinetics of Lenabasum (former Anabasum,
Resunab, JBT-101 or Ajulemic acid).
What about RESOLVE-1 Phase-3 study of

Lenabasum for the treatment of diffuse
cutaneous systemic sclerosis (dcSSc)?
On May 27, 2020 Corbus Pharmaceuticals pointed
summer 2020 for topline data announcement:
RESOLVE-1 Phase 3 (NCT03398837) study is double-

blind, randomized and placebo-controlled study to
evaluate the efficacy and safety of lenabasum for the
treatment of diffuse cutaneous systemic sclerosis (SSc).
Study enrolled 365 patients.
This is the most important milestone for lenabasum. The

results of RESOLVE-1 trial will determine the future of
the company and of course will affect its share price as
well.
According to recent study the global scleroderma

therapeutics (all subtypes) market size was $1.6 billion
in 2018.
Lenabasum is the only late stage drug candidate in the

company’s portfolio. In case of strong results Corbus
Pharmaceuticals may pretend for the share in this
market, but in case of absence of strong evidence the
company share price may drop substantially to cash/per
share value.
Let’s try to assess the probable outcomes of RESOLVE-1

trial prior to data release.
Here are primary and secondary outcome measures of

the trial:
Source: clinicaltrials.gov
Primary endpoint of the study has been changed to ACR-

CRISS improvement while FDA will evaluate both
primary and secondary outcome measures including
mRSS, FVC and HAQ-DI.
It’s obvious that CRISS improvement alone will not be

enough for the FDA to approve the drug in future, but
slight improvement may allow the company to share
positive PR.
Systemic sclerosis /diffuse cutaneous

systemic sclerosis
Before we dive into lenabasum trial outcome
probabilities, we would like to share what is diffuse
cutaneous systemic sclerosis and what treatment options
are available in the market.
It’s obvious that any new drug should present clinical

benefit not only in comparison with placebo, but it also
should have at least some benefits in comparison with
available treatment options.
Diffuse cutaneous systemic sclerosis (dcSSc) or diffuse

cutaneous scleroderma is one of the subtypes of
Systemic Sclerosis (SSc). For those who are interested in
the classifications of SSc please click here.
Diffuse cutaneous scleroderma (dcSSc) has some

particular features:
Raynaud phenomenon followed, within one year, by

puffy or hidebound skin changes
Truncal and acral skin involvement; tendon friction
rubs
Nailfold capillary dilation and capillary drop-out
Early and significant incidence of renal, interstitial
lung, diffuse gastrointestinal,and myocardial disease
Anti-Scl-70 (30 percent) and anti-RNA polymerase-I,
II, or III (12 to 15 percent)antibodies
There is no cure for SSc and all current treatment

options are to modify the disease symptoms.
According to EULAR treatment recommendation update

(2016) there are 4 recommended drugs for skin
improvement in dcSSc: methotrexate,
cyclophosphamide, mycophenolate mofetil and
azathioprine.
These drugs are being administered depending on

severity, time of disease onset and symptoms.
Here are the treatment options based on expert

consensus (focusing on individual organ systems in
SSc):
Source: Rheumatology (Oxford) 2015
Please also have a look at comparative results of the

efficacy of mycophenolate mofetil and cyclophosphamide
in improving skin condition with dcSSc:
Source: Efficacy of Mycophenolate Mofetil and Oral

Cyclophosphamide on Skin Thickness: Post Hoc Analyses
From Two Randomized Placebo-Controlled Trials /
Arthritis Care & Research 2018
These drugs led to meaningful improvement in dcSSc

patients comparing with placebo. However, some serious
improvements were observed in placebo groups as well,
which is believed to be related to disease natural
course.
There are also interesting observations from previous

clinical trials in SSc and dcSSc. We can see meaningful
mRSS improvement in placebo cohorts starting from
week 16-20.
Source: Efficacy and Safety of Tocilizumab for the

Treatment of Systemic Sclerosis: Results from a Phase 3
Randomized Controlled Trial
That's why meaningful difference with placebo at the

same timeframe is essential.
There are many researches being conducted to

understand the pathogenesis of SSc, including the role of
pathogens in triggering the disease and “permissive”
genetic makeup.
The scheme bellow visualizes the processes involved in

SSc development and helps to understand potential
targets in disease treatment:
Source: Emerging targets of disease-modifying therapy

for systemic sclerosis / Nature 2019
Corbus' approach
Corbus Pharmaceuticals tries to target endocannabinoid
system (ECS) to improve inflammation in SSc patients.
First of all, ECS is a very complex system where various

receptors, enzymes and proteins interacting in different
processes in which their joint role is often required. That
may be a reason explaining a complexity of targeting
some ECS receptors alone.
Source: A Guide to Targeting the Endocannabinoid

System in Drug Design / International Journal of
Molecular Sciences 2020
Now let’s come back to lenabasum (former Ajulemic Acid

- a synthetic analog Δ8‐tetrahydrocannabinol (THC)‐11‐
oic acid synthesized by Prof. Burnstein). Here is some
interesting finding by Prof. Berstein himself (the study
published by Molecular Pharmacology journal in 2003):
“ However, the mechanism of AJA action remains

unknown. Here we report that AJA binds directly
and specifically to the peroxisome proliferator-
activated receptor gamma (PPARgamma), a
pharmacologically important member of the nuclear
receptor superfamily. Functional assay indicates
that AJA activates the transcriptional activity of both
human and mouse PPARgamma at pharmacological
concentrations.
Does it mean that lenabasum is more PPARgamma

activator rather than CB2 agonist (based on in-vitro
studies)?
Another study also confirms this thesis later in 2007:
“ Our results show a binding mode that is compatible

with other known partial agonists of PPAR,
explaining their moderate activation of the receptor,
as well as the structural basis for isotype selectivity,
as observed previously in vitro. The structure also
provides clues to the understanding of partial
agonism itself, suggesting a rational approach to
the design of molecules capable of activating the
receptor at levels that avoid undesirable side
effects.
If drug acts through PPAR-y agonism then it has even

higher chances to fail Phase-3 trial results. Inventiva’s
(IVA) one year double-blind, randomized, placebo-
controlled Phase IIb study of Lanifibranor (more potent
pan-PPAR agonist) results were indicative in this point:
Source: press release by Inventiva

What if lenabasum is really potent CB2/PPAR-gamma

agonist as the company claims? (though we don’t have
such an evidence).
CB2 is one of two “classical” ECB receptors. CB2 was

found in many immune cell types. Normally CB2 is
activated by our body’s own endocannabinoids: 2-AG
and AEA. These 2 lipids have totally different effects. 2-
AG modulates functions related to immune cells
recruitment, chemokine release, migration. So, generally
it plays pro-inflammatory role while AEA seems to
downregulate some leukocyte function like pro-
inflammatory cytokine release, which may point to anti-
inflammatory role of AEA. The table bellow shows pro-
and anti-inflammatory roles of CB2 depending on the
activation by certain endocannabinoids:
Source: The CB2 receptor and its role as a regulator of

inflammation / Springer 2016
This factor is one of the most significant among

the problems of exogenous activation of CB2.
CB2 receptors & neutrophils
Higher neutrophil count is hallmark of early SSc and may

lead to more severe skin/lung disease. Many studies
indicate a clear connection between the activity of
neutrophils and severity of SSc.
Source: Association of simple hematological parameters

with disease manifestations, activity, and severity in
patients with systemic sclerosis / Clinical Rheumatology,
Springer 2019
Although СB2 was detected on the surface of many types

of white blood cells, there is a huge question in the case
of neutrophils:
Source: The CB2 receptor and its role as a regulator of

inflammation / Springer 2016
Thus, it is doubtful that CB2 agonist can greatly affect

neutrophil modulation and reduce inflammatory
processes associated directly with neutrophils.
Lack of CB2 on cell surface during Human B-cell

activation
B-cells activation plays a serious role in autoimmune

processes during SSc. The bellow table shows another
hallmark of the dcSSc – presence of Anti-topoisomerase
I antibodies:
Source: Cytokine and chemokine levels in systemic

sclerosis: relationship with cutaneous and internal organ
involvement / Clinical & Experimental Immunology 2004
Moreover, there are many scientific publications about

the role of B-cells in pathogenesis of SSc and dcSSc
subtype respectively.
But there is a problem with CB2 receptors on the surface

of activated B-cells as well. Different studies show the
lack of CB2 receptors on activated B-cells surface:
Source: Regulation of Cell Surface CB 2 Receptor During

Human B Cell Activation and Differentiation / Journal of
Neuroimmune Pharmacology 2017
CB1 receptor interference
Another important point is that the role of CB1 receptors

in immune cells is not researched well yet. There are
evidences of CB1 antagonism leading to anti-
inflammatory activity which indicates a poor
understanding of joint role of these two receptors in
immune cells so far. That is, in fact, even minimal
activation of CB1 may play opposite role and may reduce
the theoretical anti-inflammatory impact of CB2
activation.
The study by Prof.Burstein in 2014 points to reduced

(but not eliminated) CB1 activity of ultrapure ajulemic
acid - JBT-101 (lenabasum).
Success in animal models can give a false picture

in SSс.
We may observe many promising studies evaluating CB2

agonism in animal models, but there is an important
issue regarding animal studies in SSc: There is no
successful SSc animal model replicating human SSc. For
those who are interested in detailed information about
limitations and challenges of animal models in SSc
please click here.
Based on the above arguments, we believe that the

results of phase-3 of Lenabasum have a high
probability of failure and the subsequent
significant drop in the company's stock price.
RISKS
Shorting any stock involves high risks.
Sometimes even dubious results of clinical trials can be

presented as positive and it takes time to evaluate
published data and price it by the market.
Though, we believe that Corbus Pharmaceuticals will fail

Phase-3 RESOLVE-1 trial, there is always some chance
that the results may be better than we expect.
We strictly do not recommend to short the stock for

investors with low risk tolerance.
Financials
According to the recent 10-Q SEC form Corbus
Pharmaceuticals had about $46.61 million cash & cash
equivalents as of March 31, 2020.
Source: Company’s 10-Q SEC form
Quarterly cash burn was around $29.65 million, so, the

company’s cash & cash equivalents currently is about
$17 million. This means that cash per share is about
$0.23.
Conclusions
Corbus Pharmaceutical’s lead drug candidate lenabasum

has about 20 years of clinical trial history with no
transparent and solid data so far. The company didn’t
share detailed PK/PD data of it’s lead and the only late
stage drug candidate. The company also did not share
the proof of concept or scientific understanding about
the real mechanism of action of their drug candidate.
Given the arguments presented in the article, even in

the best case, taking on faith the mechanism of action of
the drug, lenabasum has a high probability to fail Phase-
3.
On the other hand, the company has less than 3 months

cash runway now.
We believe that Corbus’ stock price at $8 with $0.23

cash/per share bears very attractive short possibility.
Disclosure: I am/we are short CRBP.
I wrote this article myself, and it expresses my own

opinions. I am not receiving compensation for it (other
than from Seeking Alpha). I have no business
relationship with any company whose stock is mentioned
in this article.

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7/6/2020 Preview - Contributor Center | Seeking Alpha

Corbus Pharmaceuticals: A High Likelihood Of Fail

Lenabasum has more than 20 years of history with

CB2 agonism is unlikely to significantly improve the

The company has less than a quarter of cash

Phase-3 fail may bring Corbus' stock price to

Corbus Pharmaceuticals (Nasdaq: CRBP) is

In this article we will try to assess the prospects of

Moreover, the company has an alarming cash position

From this point of view, Corbus is an attractive short for

The company claims that Lenabasum is CB2 receptor

Lenabasum has a long history of uncertainties and

Source: created by the author based on relevant

In terms of company history and lenabasum phase-2

We think that it was deeply analyzed by the author

In each case of a new clinical trial, it is obvious that

extend the trial again. Of course, the company can

Source: press release by Corbus Pharmaceuticals

Source: press release by Corbus Pharmaceuticals

Let us emphasize that Phase-2 trial was completed 3

Source: press release by Corbus Pharmaceuticals

Despite the fact that it’s almost 18 years since the

What about RESOLVE-1 Phase-3 study of

Source: press release by Corbus Pharmaceuticals

RESOLVE-1 Phase 3 (NCT03398837) study is double-

This is the most important milestone for lenabasum. The

According to recent study the global scleroderma

Lenabasum is the only late stage drug candidate in the

Let’s try to assess the probable outcomes of RESOLVE-1

Here are primary and secondary outcome measures of

Primary endpoint of the study has been changed to ACR-

Source: press release by Corbus Pharmaceuticals

It’s obvious that CRISS improvement alone will not be

Systemic sclerosis /diffuse cutaneous

It’s obvious that any new drug should present clinical

Diffuse cutaneous systemic sclerosis (dcSSc) or diffuse

Diffuse cutaneous scleroderma (dcSSc) has some

Raynaud phenomenon followed, within one year, by

There is no cure for SSc and all current treatment

According to EULAR treatment recommendation update

These drugs are being administered depending on

Here are the treatment options based on expert

Source: Rheumatology (Oxford) 2015

Please also have a look at comparative results of the

Source: Efficacy of Mycophenolate Mofetil and Oral

These drugs led to meaningful improvement in dcSSc

There are also interesting observations from previous

Source: Efficacy and Safety of Tocilizumab for the

That's why meaningful difference with placebo at the

There are many researches being conducted to

The scheme bellow visualizes the processes involved in

Source: Emerging targets of disease-modifying therapy

First of all, ECS is a very complex system where various

Source: A Guide to Targeting the Endocannabinoid

Now let’s come back to lenabasum (former Ajulemic Acid

“ However, the mechanism of AJA action remains

Does it mean that lenabasum is more PPARgamma

Another study also confirms this thesis later in 2007:

“ Our results show a binding mode that is compatible

If drug acts through PPAR-y agonism then it has even

Source: press release by Inventiva

What if lenabasum is really potent CB2/PPAR-gamma

CB2 is one of two “classical” ECB receptors. CB2 was