Is Corbus Pharmaceuticals Stock a Buy?

Corbus Pharmaceuticals (NASDAQ:CRBP) expects 2020 to be a banner year, led by results from its pivotal phase 3 clinical trial for lead drug lenabasum. Results from two additional phase 2 trials with lenabasum should also be reported. Additionally, Corbus plans to build its sales, marketing, and reimbursement teams in anticipation of lenabasum’s future approval and the company’s first commercial product launch.

What should investors think about this biotech stock…

Pivotal trial results expected next summer

Corbus plans to announce the first data from its pivotal phase 3 trial comparing lenabasum to placebo in systemic sclerosis, an autoimmune disease affecting skin and connective tissues. The primary endpoint of the trial will be the change from baseline to the end of the trial in the ACR Composite Response Index in Systemic Sclerosis (CRISS), a compilation of five assessments evaluating different aspects of the disease.

Why is this important? After meeting with the U.S. Food and Drug Administration (FDA), Corbus switched the primary endpoint in April 2019 to ACR CRISS from the original modified Rodnan Skin Score (mRSS). Prior clinical trials for systemic sclerosis used mRSS. Switching an endpoint after a pivotal trial is underway is virtually unheard of and raises the question “why didn’t the company have alignment with the FDA prior to starting the trial?”

On the second-quarter conference call, Corbus’ chief medical officer said the FDA is “cognizant of the shortcomings” of using different scales and will look at the “totality of the data.” To be clear, mRSS is one of the five components of ACR CRISS. Investors should be cautious, as it appears the FDA is not in full agreement as to which endpoints carry more weight than others.

Approximately 200,000 people in the U.S., Europe, and Japan suffer from systemic sclerosis. It is four times more common in women than in men. Corbus believes that lenabasum’s potential opportunity to treat these patients could translate into $1.4 billion to $2.2 billion in peak sales.

In addition, results from a phase 2b trial with lenabasum in cystic fibrosis should be available next summer. Affecting about 30,000 people in the U.S., cystic fibrosis is a progressive genetic disease that causes frequent lung infections and can lead to shorter-than-normal lifespans.

Yet another phase 2 trial, this time in lupus erythematosus, should report results in 2020. The National Institutes of Health funded and ran the phase 2 trial in lupus, a disease where the immune system attacks healthy cells across a variety of organs.

Meanwhile, Corbus continues to enroll patients in a pivotal phase 3 trial for a rare muscle disease called dermatomyositis, with results expected in 2021…

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