Corbus Pharmaceuticals Holdings, Inc.
Q3 2018 Earnings Call Transcript

Published: 9 Nov 2018

[Operator:]

Greetings, and welcome to the Corbus Pharmaceuticals quarterly update conference call and webcast. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Ted Jenkins, Senior Director of Investor Relations and Corporate Communications. You may begin.

[Ted Jenkins:]

Good morning, everyone, and thank you for joining us for the Corbus Pharmaceuticals quarterly update conference call and webcast. At this time, I'd like to remind our listeners that remarks made during this call may state management's intentions, hopes, beliefs, expectations or projections of the future. These are forward-looking statements that involve risks and uncertainties. Forward-looking statements on this call are made pursuant to the Safe Harbor provisions of the Federal Securities Laws. These forward-looking statements are based on Corbus' current expectations, and actual results could differ materially. As a result, you should not place undue reliance on any forward-looking statements. Some of the factors that could cause actual results to differ materially from those contemplated by such forward-looking statements are discussed in the periodic reports Corbus files with the Securities and Exchange Commission. These documents are available in the Investors section of the company's website and on Securities and Exchange Commission's website. We encourage you to review these documents carefully. And joining me on the call today is Yuval Cohen, our Chief Executive Officer; Sean Moran, our Chief Financial Officer; and Barbara White, Chief Medical Officer. It's now my pleasure to turn the call over to Yuval Cohen.

[Yuval Cohen:]

Thank you, Ted. Good morning, everyone, and thank you for joining us today. With all the developments over the last months, we decided it was time to finally host our inaugural quarterly update call. I will begin by providing a brief overview of our business for those of you who are new to Corbus as well as an update on our clinical programs and our transformational recent transaction with Jenrin Discovery that we announced at the end of September. I will also provide an update on our official – on our financial position before we open the call for your questions. As a company, we've come a long way since we launched Corbus 4.5 years ago. From the start, we believe that there will be strong therapeutic rationale to target the body's endocannabinoid system to modulate inflammation and fibrosis. We're pleased that our core thesis is being validated and that our vision is becoming a reality

[Operator:]

Thank you. [Operator Instructions] Our first question is coming from Justin Kim of Cantor Fitzgerald. Please go ahead.

[Justin Kim:]

Hi, good morning thank you for taking my question. My first question, I suppose, might be for Barbara on the systemic sclerosis treatment landscape. When thinking about the overpopulation, what proportion of patients does the company expect fix statement on center of excellence? And how many are anticipated to be in the United States?

[Barbara White:]

Justin, I’m sorry, you broke off just a little bit. Could you repeat the very end of that question for me?

[Justin Kim:]

Just how many centers of excellence are there in the United States for the treatment of systemic sclerosis?

[Barbara White:]

I think there are multiple centers, so probably 20 larger ones, and then there are some smaller ones scattered around. But that would be an approximate number for the larger ones. But patients – I should say that patients are cared for, many of them, in these large centers, which allows commercial opportunities to be concentrated. And at the same time, there are still patients who remain under the care of their general rheumatologist, but their care would be influenced by the experts at the care centers.

[Justin Kim:]

Okay. Great. And then, maybe one on the open-label extension. It’s very impressive to see the such high participation rate. With the team, have any additional color on the sort of reasons and timing of discontinuation for the small 17% in the sclerosis study?

[Barbara White:]

So the comment is we did have, I think, 17% dropout by the end of 18 months. And I – we did look at it. I don’t have it all just at the top of my head right now. One of them was for a complication of heart. I think two of them were for complications of their systemic sclerosis that was unrelated to the drug. None of them were directly related to complications of the drug or failure of the drug. It was a multitude of other reasons. I’m sorry I don’t have them at my fingertips.

[Justin Kim:]

Sure. No problem. And then maybe just a last one. At what point with the enrollment would we get a sort of timelines with the lupus study?

[Barbara White:]

So the lupus study, as you know, is being run by the NIH, and they are managing the enrollment. At this point, I believe there are 13 of 15 anticipated sites that are up and are enrolling. We know that they’re enrolling actively. Usually, you get an uptick of enrollment after you get your sites up. So we remain optimistic that we will see data. It’s a short study. Some time probably late 2019, 2020, that would be our estimate. But of course, at this point, it depends upon the NIH.

[Justin Kim:]

Okay, great. Thank for taking my questions.

[Operator:]

Thank you. Our next question is coming from Liisa Bayko of JMP Securities. Please go ahead.

[Jon Wolleben:]

Hi, this is Jon on for Liisa. Congrats on the progress and thanks for taking the questions. Just a couple on CRB-4001. Can you discuss the decision to go after NASH first? Obviously, it’s an attractive field but very crowded and many late-stage players. What kind of gives you confidence moving there? And any initial thoughts on the Phase I? Will this all be in patients? And what kind of signals of efficacy or biomarkers are you planning to look at?

[Barbara White:]

Those are great questions. Let me start with the Phase I first. Because we’ve got to do a Phase I always to check initial safety, determine maximum tolerated dose, look through the effects, those kinds of things, so we will plan to accomplish all the standard testing that one would want to see in a single ascending dose, followed by multiple ascending dose Phase I. We are actually in active discussions with Dr. Kunos about the final design of this study. Of course, whatever biomarkers we can pull out of the Phase I, we would like to do. That would happen only really realistically in the multiple ascending dose if we enrolled patients who are not all healthy volunteers. So again, not finally determined, but agree it would be nice to get some early biomarker data in the late stages of the Phase I. In terms of going into NASH, the next study that will be done after that is a Phase II. As Yuval said, that would be done at the NIH. And the purpose of this study – that study will be to give us proof of mechanism, proof of principle that this drug can alter metabolic abnormalities and underlying biomarkers in patients who would have metabolic syndrome, be prone to NASH, have early enzyme abnormalities, those types of things. Study is unlikely to be long enough and certainly not big enough to give us any sort of definitive clinical information. It will be designed to show that we’ve got proof of mechanism, we’ve got biologic activity that we’re looking for. That not only opens up the field of NASH, again, just knowing that we’ve got a biologically active drug that does what it’s expected to allows us to go further. The logic of NASH is that, certainly, there’s a huge unmet medical need and that this drug is scientifically well positioned to target NASH. It impacts the underlying glucose intolerance, metabolic disorders, lipid abnormalities. There’s significant preclinical data that, that’s the case. It’s – there’s data that affects the fibrosis that causes the ultimate liver damage. So scientifically, very strong, rational. And this particular drug, 2001, targets an isoform of CB1 that is preferentially expressed in the liver. So this is a great drug to target liver problems with the fibrosis metabolic problems.

[Yuval Cohen:]

Jon, if I can just chime in, in terms of why go into it given the crowded field. So a couple of things. One, I’ve seen that by the time we advance, we will have collectively a much better understanding of what the clinical endpoints are that are needed for registration. I think the folks ahead of us are sort of learning that as they go along. By the time we get to that position, that will be really much more clarified. The second thing to think about is no question in my mind that NASH will be a disease treated by multiple drugs in the form of a [indiscernible] (26

[Jon Wolleben:]

Great. And just one last from me. With the goal of getting one to two clinical compounds during 2020, can you discuss how you’re thinking about prioritizing these Jenrin compounds and what efforts you have to do over the next 12 months or so to start getting things rolling as far as that early-stage pipeline? Thank you.

[Barbara White:]

Sure. We – that’s certainly an area of very active work around Corbus. And what we are doing, what the preclinical group is doing is extensively characterizing the compounds in this library so that we will be able to identify clusters of compounds with similar activities and then identify the leads within those clusters and allow us to target them to the appropriate diseases. We would expect sometime next year to be able to indicate to The Street what we’ve got in that library in terms of types of activities and potential usefulness in different indications of those compounds. So we’re in that, we’re down in deep right now, and we would expect that you would hear more next year.

[Jon Wolleben:]

Great congratulate on the progress and thanks for taking the questions.

[Operator:]

Our next question is coming from Laura Chico of Raymond James. Please go ahead.

[Laura Chico:]

Good morning thanks for taking my question. I just have a couple. First, Yuval, could you talk to the recent competitive updates that we got at ACR and just how we should be thinking about the readthrough more specifically to lenabasum? And how has this changed your development strategies, if at all, in any way?

[Yuval Cohen:]

Sure. So I’ll start by saying that we’ve never been more excited. The – I think it’s the combination of two things. We have a drug that we think has tremendous potential, and our competition is really getting into a lot of difficulties. So what we saw at ACR was a series of failures from big pharma using drugs that are typically already approved, that are typically immunosuppressive and used either for rheumatoid arthritis or IPF or PAH that have been tried in systemic sclerosis and that has failed, the most interesting one, of course, being tocilizumab or ACTEMRA which failed its Phase III. I should add that probably it’s not the most surprising outcome. They also failed their Phase II. What is important to remember is the following, Laura. Those drugs, if you look at them, don’t actually have a particular logic to them when it comes to systemic sclerosis. They target inflammatory mediators that are not necessarily dominant in systemic sclerosis and they’re a part, I think, of a very sound strategy of big pharma to take an approved drug and target multiple, multiple other indications in an effort to expand labels. What I like about it is that puts us now firmly as the most advanced systemic sclerosis program. There’s no other program that is this close to market. And of course, lenabasum is radically different in its mechanism of action. I should also point out that even though it’s a little bit difficult to compare different clinical trials to each other. We certainly believe that our data is considerably, considerably better than data generated by others and certainly, based on historical patient progress. So we're excited and we're really looking forward to it. Similarly, just to add to that, this year has also seen competitors in cystic fibrosis and in dermatomyositis also fail. Again, same logic, very, very different approaches – radically different approaches that, again, are clearing the way for us to now be in the lead for those three indications.

[Laura Chico:]

Okay. That's helpful, Yuval. Thank you for the caller there. If I could just ask one other question. I wanted to focus on RESOLVE for a moment, and I apologize if I missed this in your remarks. But could you give us an update on where you stand in terms of the enrollment pace in RESOLVE and also relative to your expectations? And I guess, if I work backwards from top line data in early 2020 and then using the 52-week treatment period, you should be completing enrollment soon. I'm just trying to understand how close you are to that target. And using the same math and logic for the CF effort, I think you should also be getting close there. Am I off on my math? Any update you could provide?

[Yuval Cohen:]

So one of the things we don't do, Laura, is we don't provide updates on patient numbers. We've never done so. We think it's always awfully distracting. These things are not always linear. I will say though that we finished every clinical study on time, and I'm delighted to say that we are absolutely on schedule for data in 2020 for all of these indications. We're pleased with how it's going along. You can imagine that given, for example, your previous questions as well as what we've seen from patient advocacy groups, what we heard from patients and from sites, there is really considerable enthusiasm to be part of this – of all of these indications in all of this clinical trials. One of the things that we have found was really interesting is the timing could not be better. There are no big studies competing with us across scleroderma, CF and certainly, dermatomyositis. Even the Vertex studies have sort of finished, leaving us with an open window. And so enrollment's going well. We are on schedule, and we really look forward to sharing data with you when it comes out.

[Laura Chico:]

All right. Thanks. And you know what, I'll sneak one more in for Sean, if I might. I just wanted to confirm there was no ATM usage in the quarter, correct?

[Sean Moran:]

That's correct, Laura.

[Laura Chico:]

All right, thank you guys.

[Sean Moran:]

Thanks Laura.

[Operator:]

Thank you. Our next question is coming from Ted Tenthoff of Piper Jaffray. Please go ahead. (33

[Ted Tenthoff:]

I’m can you hear me, okay.

[Operator:]

Yes, your line is in queue. Please go ahead with your question.

[Ted Tenthoff:]

Okay, apologies have been having (34

[Barbara White:]

Well, let me start with what's ongoing and will be continued in the near future. We're looking at a variety of characteristics of the compounds, not only physical chemical characteristics but functional characteristics, both in terms of functional assays, signaling, those kind of things. Those data allow us to determine the general types of compounds, if I can put it that way. We anticipate that, within this large library, there will be clusters of drugs that are more similar and that we can aggregate them. And with the information about clusters of similar compounds, that will allow us to then further explore animal models that seem relevant to the activities that those compounds have and animal models that are appropriate to the indications that we think would be relevant to what the mechanism appears to be for those compounds. So it's a sequential process. We have started. We will continue. We will be updating next year. And we certainly believe that we'll be able to get one or two new ones advanced into the clinic starting about 2020.

[Yuval Cohen:]

And Ted, if I can just add to that and – to your – to the listeners at large, just how excited we are by this. So if you think about it, we have – we are targeting a brand-new area of biology, which is the endocannabinoid system using synthetic cannabinoid. And we're doing so not just with a single drug – because I think that, in and of itself, would certainly be worthwhile. And you can see lenabasum just as a stand-alone drug just for the first three indications had some really extraordinary financial potential. But to be able to go then and bring in hundreds and hundreds and hundreds of unique compounds that have the potential collectively to yield novel drugs on this, I think, is quite remarkable. The other thing to think about is this is – like with any new era of biology and any new therapeutic, there's a great deal of know-how that is proprietary. The ability to be a highly specialized team that understands the biology, I would argue, probably better than most and also knows how to develop these types of drugs clinically and from a regulatory point of view, I think, is – can be easily underappreciated. It's actually a very, very big deal. Last but not least, if we think about our large ecosystem in pharma and if you think about big pharma out there, I'm going to postulate that it's going to become very, very difficult for big pharma to ignore this biology. In fact, if I were a betting man, I would say that in a whole bunch of big pharma at the moment, they are rapidly dusting off their own cannabinoid research programs and looking at whether or not they're applicable. But the advantage we have is that we're probably a decade ahead of everyone. And so that opens a very simple possibility. As a big pharma, if you are interested in this biology, do you develop something on your own that's gonna take you a very, very long time and a very steep learning curve or do you turn to Corbus with our hundreds of potential compounds and our unique expertise? And I really like the way that's shaping up, I have to say.

[Ted Tenthoff:]

Well, I'm really excited to hear more and certainly excited by the progress of lenabasum, so good stuff, guys. Thanks you so much.

[Yuval Cohen:]

Thank you.

[Operator:]

Thank you. At this time, this brings us to the end of our Q&A session for today. We'd like to thank you all for your interest in Corbus. You may disconnect your lines at this time, and have a wonderful day.