UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
FORM
10-K
FOR
THE FISCAL YEAR ENDED DECEMBER 31, 2020
FOR
THE TRANSITION PERIOD FROM ________ TO ________.
COMMISSION
FILE NUMBER: 001-37348
Corbus
Pharmaceuticals Holdings, Inc.
(Exact
name of registrant as specified in its charter)
500 River Ridge Drive Norwood, Massachusetts 02062
(Address of principal executive offices) (Zip Code)
(617)963-0100
Registrant’s
telephone number, including area code:
Securities
registered pursuant to Section 12(b) of the Act:
Title of each class Trading Symbol Name of each exchange where registered
Common Stock, par value $0.0001 per share CRBP The NASDAQ Global Market
Securities
registered pursuant to Section 12(g) of the Act: None
Indicate
by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ☒
Indicate
by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐
No ☒
Indicate
by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate
by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant
to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that
the registrant was required to submit such files). Yes ☒ No ☐
Indicate
by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting
company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,”
“smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer ☐ Accelerated filer ☐
Non-accelerated filer ☒ Smaller reporting company ☒
Emerging growth company ☐
If
an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for
complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate
by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness
of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered
public accounting firm that prepared or issued its audit report. ☐
Indicate
by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☒
As
of June 30, 2020, the last business day of the registrant’s most recently completed second fiscal quarter, the aggregate
market value of the common stock held by non-affiliates of the registrant was approximately $664,542,879, based on the closing
price of the registrant’s common stock on June 30, 2020.
As
of March 8, 2021, the number of shares outstanding of the registrant’s common stock, $0.0001 par value per share,
was 124,936,542.
Documents
incorporated by reference
Portions
of the registrant’s proxy statement for the 2021 annual meeting of stockholders to be filed pursuant to Regulation 14A within
120 days after the registrant’s fiscal year ended December 31, 2020, are incorporated by reference in Part III of this Form
10-K.
CORBUS
PHARMACEUTICALS HOLDINGS, INC.
ANNUAL
REPORT ON FORM 10-K
FOR
THE YEAR ENDED DECEMBER 31, 2020
TABLE
OF CONTENTS
ITEM Page
PART I
1. Business 4
1A. Risk Factors 21
1B. Unresolved Staff Comments 50
2. Properties 50
3. Legal Proceedings 50
4. Mine Safety Disclosures 50
PART II
6. Selected Financial Data 51
7A. Quantitative and Qualitative Disclosures About Market Risk 62
8. Financial Statements and Supplementary Data 63
9A. Controls and Procedures 63
9B. Other Information 63
PART III
10. Directors, Executive Officers and Corporate Governance 64
11. Executive Compensation 64
13. Certain Relationships and Related Transactions, and Director Independence 64
14. Principal Accounting Fees and Services 64
PART IV
15. Exhibits, Financial Statement Schedules 65
PART
I
SPECIAL
NOTE REGARDING FORWARD-LOOKING STATEMENTS
This
report on Form 10-K contains forward-looking statements made pursuant to the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995 under Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange
Act of 1934, as amended. Forward-looking statements include statements with respect to our beliefs, plans, objectives, goals,
expectations, anticipations, assumptions, estimates, intentions and future performance, and involve known and unknown risks, uncertainties
and other factors, which may be beyond our control, and which may cause our actual results, performance or achievements to be
materially different from future results, performance or achievements expressed or implied by such forward-looking statements.
All statements other than statements of historical fact are statements that could be forward-looking statements. You can identify
these forward-looking statements through our use of words such as “may,” “can,” “anticipate,”
“assume,” “should,” “indicate,” “would,” “believe,” “contemplate,”
“expect,” “seek,” “estimate,” “continue,” “plan,” “point to,”
“project,” “predict,” “could,” “intend,” “target,” “potential”
and other similar words and expressions of the future.
There
are a number of important factors that could cause the actual results to differ materially from those expressed in any forward-looking
statement made by us. These factors include, but are not limited to:
● our history of operating losses;
● our ability to retain key executive members;
● interpretations of current laws and the passages of future laws;
● acceptance of our business model by investors;
● the accuracy of our estimates regarding expenses and capital requirements; and
● our ability to adequately support growth.
The
foregoing does not represent an exhaustive list of matters that may be covered by the forward-looking statements contained herein
or risk factors that we are faced with that may cause our actual results to differ from those anticipate in our forward-looking
statements. Please see “Risk Factors” for additional risks which could adversely impact our business and financial
performance.
All
forward-looking statements are expressly qualified in their entirety by this cautionary notice. You are cautioned not to place
undue reliance on any forward-looking statements, which speak only as of the date of this report or the date of the document incorporated
by reference into this report. We have no obligation, and expressly disclaim any obligation, to update, revise or correct any
of the forward-looking statements, whether as a result of new information, future events or otherwise. We have expressed our expectations,
beliefs and projections in good faith and we believe they have a reasonable basis. However, we cannot assure you that our expectations,
beliefs or projections will result or be achieved or accomplished.
Item 1. BUSINESS
All
references in this report to “Corbus,” the “Company,” “we,” “us,” or “our”
mean Corbus Pharmaceuticals Holdings, Inc. and its subsidiaries unless we state otherwise, or the context otherwise indicates.
Overview
We are a Phase 3, clinical-stage
pharmaceutical company focused on the development and commercialization of novel therapeutics that target the endocannabinoid
system in the fields of autoimmunity, fibrosis, and cancer. We are developing a diverse pipeline of drug candidates
across several distinct programs, including small molecules as well as biologics, while also evaluating potential
external candidates complimentary to our existing programs.
Our
pipeline includes the following programs:
Our Pipeline
Lenabasum
for the Treatment of Autoimmune Diseases
Lenabasum
selectively binds to CB2, which is preferentially expressed on activated immune cells, fibroblasts and other cell types, including
muscle and bone cells. Lenabasum reduces inflammation and limits fibrosis, without immunosuppression. Lenabasum inhibits production
of inflammatory cytokines and eicosanoids, and stimulates the production of mediators (Specialized Pro-resolving Lipid
Mediators) that resolve inflammation. It inhibits transformation of fibroblasts into myofibroblasts and production of fibrotic
growth factors and collagen. These biologic effects have been demonstrated in cells, animal models, and humans.
The
U.S. Food and Drug Administration, or FDA, granted lenabasum Orphan Drug Designation as well as Fast Track Status for systemic
sclerosis and cystic fibrosis, and Orphan Drug Designation for dermatomyositis. The European Medicines Authority, or EMA, has
granted lenabasum Orphan Drug Designation for systemic sclerosis, cystic fibrosis, and dermatomyositis.
In 2020, we announced
that lenabasum did not meet the primary endpoints in our RESOLVE-1 Phase 3 study of lenabasum for the treatment
of systemic sclerosis (the “RESOLVE-1 Study”) or our Phase 2b study of lenabasum for the treatment of
cystic fibrosis. Currently, no patients with systemic sclerosis or cystic fibrosis are being treated with lenabasum.
We are preparing the data from our RESOLVE-1 Study for publication and will decide on the next steps in the development
process for systemic sclerosis pending the outcome of our Phase 3 study of lenabasum for the treatment of
dermatomyositis (the “DETERMINE Study”). We are preparing the data from our Phase 2b study of lenabasum
for the treatment of cystic fibrosis for publication, but currently we do not have plans for additional clinical studies
in cystic fibrosis.
In December 2018, we
initiated the DETERMINE Study, our Phase 3 double-blind placebo-controlled multi-center international clinical study.
The DETERMINE Study is fully enrolled with 176 patients. In January, 2021, we submitted a protocol amendment to
the FDA to shorten the duration of the DETERMINE Study from 52 weeks to 28 weeks. Subjects in the DETERMINE
Study are randomized to receive lenabasum 20 mg twice per day, lenabasum 5 mg twice per day, or placebo twice per day in a
2:1:2 ratio. The primary efficacy outcome, which will be measured at week 28, is the American College of Rheumatology/European
League Against Rheumatism 2016 Total Improvement Score, which is a weighted composite measure of improvement from baseline in
six endpoints, including Physician Global Assessment of Disease Activity, Physician Global Assessment of Extramuscular Disease
Activity, Patient Global Assessment of Disease Activity, Health Assessment Questionnaire (patient-reported disability), Manual
Muscle Testing, and muscle enzymes. Change from Baseline in the Cutaneous Dermatomyositis Activity and Severity Index activity
(CDASI) score is one of several secondary efficacy outcomes in the Phase 3 study. All subjects in the DETERMINE study
have completed their week 28 visit, and some need to complete a 28-day safety follow-up visit off study drug, with topline data
expected in the second quarter of 2021.
The design of our DETERMINE
Study was based on positive data from our 16-week, Phase 2 double-blind, placebo-controlled single center study of
safety and efficacy of lenabasum in patients with refractory dermatomyositis skin disease and no more than minimal active
muscle involvement at baseline. Our Phase 2 study was completed in October 2017 and showed improvement in skin disease
with lenabasum treatment. All subjects remained on their background standard-of-care therapy, which, for a majority of patients,
included immunosuppressive therapies, throughout the study. Lenabasum treatment was also associated with numerically better
improvements in multiple secondary efficacy outcomes, compared to placebo. Lenabasum was safely administered in this study, with
no severe or serious adverse effects. Lenabasum was well-tolerated, with no subjects discontinuing
treatment because of an adverse effect related to lenabasum.
In
our Phase 2 study of lenabasum for the treatment of dermatomyositis, the mean improvement (reduction) in the primary
efficacy outcome, the CDASI score, was 9.3 points for lenabasum treatment versus a reduction of 3.7 points for placebo
treatment (p = 0.04, 2-sided MMRM) at Week 16.
Phase
2 Dermatomyositis Study*
*Data on file.
Our double-blind, randomized,
placebo-controlled Phase 2 study of lenabasum in systemic lupus erythematosus (funded by the National Institutes of Health) is
underway. The study is expected to dose 100 subjects at 15 sites. Enrollment is expected to be completed in the second fiscal quarter of 2021, and topline
results are expected in the second half of 2021.
Lenabasum
has demonstrated acceptable safety and tolerability profiles in clinical studies to date.
CB1 Inverse Agonists for the
Treatment of Metabolic and Fibrotic Diseases
CB1 is a receptor
that is highly expressed in the nervous system and is also expressed in multiple cell lines outside the
nervous system. A CB1 agonist is a compound that initiates a pharmacologic response when it binds to CB1. Both CB1
antagonists and CB1 inverse agonists bind to, or block, CB1 and will reduce pharmacologic effects of CB1 agonists. A CB1
inverse agonist binds CB1 but also induces a pharmacological response opposite to a CB1 agonist. Testing of CB1
antagonists and CB1 inverse agonists in animal studies has shown improvement in models of metabolic diseases,
including diet-induced obesity, diabetes, diabetic nephropathy, diabetic retinopathy, metabolic syndrome, non-alcoholic
steatohepatitis, fibrotic diseases including (lung, cardiac, renal disease, and liver fibrosis), and other
diseases including ascites, cognitive defects, Prader-Willi syndrome, and smoking cessation.
In
the nervous system, CB1 regulates neurotransmission. Despite the positive results observed in animal studies of CB1 antagonists
and CB1 inverse agonists for the treatment of certain diseases, treatment with a particular CB1 inverse agonist, rimonabant
(brand name, Acomplia), has also been associated with increased risk of anxiety, depression, and suicidality in
humans that led in October 2008 to the withdrawal of rimonabant from the European market, where it had been approved
for treatment of obesity.
Importantly,
data shows that the metabolic effects of blocking CB1 are mediated by CB1 in the periphery, not the central
nervous system. This has led to efforts to develop drugs that block CB1 only outside the central nervous system, to avoid adverse
central nervous system effects seen with rimonabant when treating metabolic diseases. When considering treatment of
metabolic diseases, CB1 is known to have reciprocal functional activities with the incretins glucose-dependent insulinotropic
polypeptide, or GIP, and glucagon-like peptide-1, or GLP-1. This is of importance because recent data show that GIP/GLP-1 receptor
agonists semaglutide and tirzepatide reduce obesity and blood sugar in humans. In animal studies, GIP/GLP-1 receptor agonists
are reported to have greater metabolic effects when used in combination with CB1 inhibitors than when used as monotherapies. Beneficial
effects of the combination of GIP/GLP-1 receptor agonists and CB1 inhibitors have been observed on body weight, fat mass, insulin
action, dyslipidemia, and hepatic steatosis in obese diabetic mice.
We
havean exclusive worldwide license
to develop, manufacture and market drug candidates from more than 600 compounds that have been developed primarily to
serve as CB1 inverse agonists with limited blood-brain-barrier penetration, to lessen risks of CB1-mediated central nervous
system adverse effects.
We
have identified and are conducting
pre-clinical studies of several CB1 inverse agonists that have shown low exposure in the brain compared to the
plasma. As shown below, the area under the curve exposure in the brain is less than 5-10% of that in the plasma
for some of our compounds in murine studies.
Novel
CB1 Inverse Agonists Have Low Plasma: Brain Ratios*
*Data on file.
Some
of these compounds have shown metabolic effects in a diet-induced obesity (DIO) murine model, preventing weight gain, or inducing
weight loss and improving glucose tolerance. In the experiment shown below, mice received a high fat diet for 16 weeks to induce
obesity and glucose intolerance, then continued to receive high fat diet while receiving oral compounds for 4 weeks. Treatment
with CRB cmpd C gave dose dependent decreases in body weight that were similar to the positive control rimonabant. At the same
doses, but lower exposures, cmpd D appeared to prevent the body weight gains associated with vehicle, though the differences were
not statistically significant. However, CRB cmpd D gave exposures that were ~7-12 fold lower than exposures for the same dose
of CRB cmpd C, so results for CRB cmpds C and D should not be compared directly. CRB cmpd D (5 mg/kg and 10 mg/kg) significantly
reduced blood glucose levels at 15 minutes and 30 minutes post glucose challenge indicating improvement in glucose tolerance.
Note that 1 hour after the last study dose, the brain-plasma ratio for CRB cmpd C was 0.04 (5 mg/kg) and 0.02 (10 mg/kg) and for
CRB cmpd D was 0.04 for both doses.
Novel
CB1 Inverse Agonists Prevent Weight Gain or Induce Weight Loss in a Diet-Induced Obesity Model*
Diet-Induced Obesity Treatment Results:
Mouse body weight change induced by study controls Pioglitazone and rimonabant compared to CRB Compounds (cmpd) C and D. Data
are means of n = 10 animals per time point. Day 0 = start of investigational compound dosing.
*Data
on file. Presented at New York Academy of Sciences Webinar on January 27, 2021.
Novel
CB1 Inverse Agonists Improve Glucose Tolerance in a Diet-Induced Obesity Model*
Glucose Tolerance Test: Oral glucose
challenge was performed on Day 25. Data are means of n = 5/group. *p < 0.05.
*
Data on file. Presented at New York Academy of Sciences Webinar on January 27, 2021.
Some of the CB1
inverse agonist compounds we are evaluating have demonstrated anti-inflammatory and anti-fibrotic effects, as well as
the inhibition of inflammatory cytokine production and the fibroblast to myofibroblast transition in pre-clinical
studies.
For some of the CB1
inverse agonists, we will further evaluate drug exposure and CB1 occupancy in the brain, relative to the periphery, following
chronic dosing in several animal species including non-human primates. We have planned other pre-clinical studies to fully
characterize effects of these compounds in animal models of metabolic diseases and fibrosis. We also plan to test metabolic
effects of our CB1 inverse agonists in combination with GLP-1 receptor agonists in animal models.
We
believe that CB1 inverse agonists with limited CB1 receptor occupancy in the brain may potentially be a safe and
effective treatment for metabolic, fibrotic and other diseases. We intend to begin IND-enabling studies with a
CB1 inverse agonist (yet to be selected) in 2021 and begin Phase 1 testing in 2022.
Novel
CB2 agonists for treatment of cancer
The role of the endocannabinoid
system in cancer has been widely researched and is a focus of current oncology research. Unregulated expression
of cannabinoid receptors and the elevated levels of endocannabinoids have been observed in a variety of cancer cells (skin,
prostate, and colon cancer, hepato- cellular carcinoma, endometrial sarcoma, glioblastoma multiforme, meningioma and pituitary
adenoma, Hodgkin lymphoma, chemically induced hepatocarcinoma, mantel cell lymphoma). For example, CB2 expression in breast
cancer biopsies correlates with negative clinical outcomes.
Pre-clinical studies
of CB2 agonists in tumor models in vitro and in vivo have shown positive data, with a decrease in
tumor growth and progression observed. Similarly, plant-derived cannabinoids such as tetrahydrocannabinol and cannabidiol
have shown activity in pre-clinical models of cancer. Several pathways downstream from CB2 have been proposed to
mediate possible anti-cancer activities of CB2 agonists, as shown in the figure below.
Proposed
CB2 Pathways for Anti-Cancer Activities*
*Pisanti S, Picardi P, D'Alessandro A,
Laezza C, Bifulco M. The endocannabinoid signaling system in cancer. Trends Pharmacol Sci. 2013 May;34(5):273-82. doi: 10.1016/j.tips.2013.03.003.
Epub 2013 Apr 17. PMID: 23602129.
We have several
novel CB2 agonists (which also function as CB1 agonists) that have reduced proliferation of some human tumor
cell lines in vitro (some Her2+ breast cancer, estrogen receptor+ breast cancer, triple negative breast cancer,
lymphoma, non-small cell lung cancer, and glioblastoma cell lines) in our pre-clinical studies. A time-dependent reduction
in phosphorylation of Her2 on Her2+ HCC1954 breast cancer cells in vivo has been observed as shown in the first
panel in the figure below. In this experiment, HCC1954 Her2+ breast cancer cells were cultured with vehicle (DMSO) or CRB
cmpd DD for different times. Densitometric analysis of the relative expression of the phosphorylated Her2 vs. total Her2 protein
was determined. CRB cmpd DD suppressed Her2 phosphorylation in vitro in HCC1954 cells.
We have conducted pre-clinical
studies with our CB2 agonists that have shown a reduction in tumor volume of human Her2+ breast cancer cell HCC1954 (shown
in the second panel in the figure below) and a triple negative breast cancer in xenograft murine models. In the
experiment shown below, female Balb/c nude mice (n = 10/group) were injected in the flank with HCC1954 Her2+ breast
cancer cells. Pharmacological treatments for 21 days with vehicle or CRB cmpd DD were started when tumors reached 90-180
mm3,with BKM-129 serving as a concurrent positive control. Tumor dimensions were measured using a caliper
and used to calculate tumor volume.
A
CB2 Agonist Inhibits Her2 Phosphorylation in vitro in a Cancer Cell Line and in vivo in a Her2+ Tumor Cell Growth
in a Xenograft Model
*Data
on file. Presented at New York Academy of Sciences Webinar on January 27, 2021.
We are conducting
and plan to commence additional pre-clinical studies to define the range of anti-cancer effects of our CB2 agonist
compounds and the underlying pathways for these effects. We also plan to test efficacy of these compounds as monotherapy
and in combination with other anti-cancer agents such as checkpoint inhibitors, in animal models. We believe that it will
be important to demonstrate that these compounds add to the efficacy seen with checkpoint inhibitors alone in animal models
before moving these compounds into clinical development. We intend to begin IND-enabling studies with a CB2 inverse agonist
(yet to be selected) in 2021 and begin Phase 1 testing in 2022.
Lenabasum
Market Opportunity and Developed Competitive Landscape
Dermatomyositis
Dermatomyositis
is a serious and rare autoimmune idiopathic inflammatory myopathy with characteristic cutaneous findings. About 80,000 individuals
in the U.S., Europe and Japan suffer from dermatomyositis. Dermatomyositis usually strikes adults, with common age of onset in
adults between 50-60 years of age.
This
systemic disorder most frequently affects the skin and muscles, and dermatomyositis can also include interstitial lung disease/restrictive
lung disease, arthritis, gastrointestinal and cardiac involvement. Inflammatory muscle disease associated with dermatomyositis
can cause discomfort and significant weakness of the proximal muscles of the arms and legs and of the trunk. Dermatomyositis can
include damaging inflammation elsewhere in the body, for example: lung inflammation that leads to lung fibrosis and restrictive
lung disease; heart inflammation that causes arrhythmia, congestive heart failure, and pericarditis; inflammation of muscles
in the esophagus that causes swallowing problems or aspiration pneumonia; and arthritis. Dermatomyositis patients may have
active skin disease despite successful treatment of their muscle and/or lung disease. The skin findings in dermatomyositis can
be disfiguring and are inflammatory rashes characterized by redness and itching in exposed areas of the skin, around the eyes,
on the hands, and in a “shawl” distribution on the scalp, hands, upper back, and photo-exposed areas. Patients with
dermatomyositis have an increased risk of malignancy, most commonly in older patients. By itself, skin involvement in dermatomyositis
has a large negative impact on quality of life, comparable to that of cutaneous lupus erythematosus, and much higher than many
dermatologic diseases.
Typically,
people with dermatomyositis are prescribed immunosuppressive therapies. These therapies may be associated with significant side
effects, such as serious infections. FDA-approved treatments for dermatomyositis include systemic corticosteroids and adrenocorticotropic
hormone analogue. Additionally, a Phase 3 study of Octagam® 10% in dermatomyositis (NCT02728752) was reported in 2020 to achieve
its primary endpoint.
We believe that a
safe and effective drug that controls inflammation in the skin, muscles, and other organs and improves overall disease would
address a significant unmet medical need in dermatomyositis, particularly a non-immunosuppressive drug like lenabasum.
Systemic
Lupus Erythematosus
Systemic
lupus erythematosus (SLE) is a prototypical autoimmune disease with a wide array of clinical manifestations, including arthritis,
rash, photosensitivity, oral ulcers, pleuritis, pericarditis, kidney problems, seizures and psychosis and blood cell abnormalities.
About 550,000 individuals in the U.S., Europe and Japan suffer from SLE. The musculoskeletal system is the most commonly involved
system in SLE. Patients with SLE have an increased frequency of related autoimmune problems, such as Sjogren’s syndrome
and antiphospholipid syndrome that require additional treatments. Systemic lupus erythematosus may occur with other autoimmune
conditions, such as thyroiditis, hemolytic anemia, and idiopathic thrombocytopenia purpura.
The
pathology of SLE involves chronic activation of the innate immune system by immune complexes, with activation of the complement
cascade, increased production of type 1 interferons and other mediators of inflammation, generation of specific immunity against
self-antigens, and resultant tissue inflammation and damage.
Medicines
specifically approved by the FDA for treatment of SLE are aspirin, hydroxychloroquine, corticosteroids (for example, prednisone),
the corticotropin injection Acthar® and the immunosuppressive drug Benlysta®. Other drugs that are not specifically
FDA approved for SLE may be prescribed by physicians, including methotrexate, mycophenolate, azathioprine, and cyclophosphamide.
These treatments may be associated with significant side effects, such as serious infections.
We
believe that a safe and effective drug that controls
inflammation in the joints and skin as well as improves overall disease activity will address a significant unmet medical need
in SLE, particularly a non-immunosuppressive drug like lenabasum.
Sales
and Marketing for Lenabasum
We
are developing our commercial capabilities in anticipation of potential FDA approval for lenabasum. Our intent is to commercialize
lenabasum ourselves in the United States with a targeted customer-facing organization to call on treating specialists and payers.
In Europe we are evaluating potential partnerships for the commercialization of lenabasum as well as considering the option
of commercializing ourselves. In Japan we granted exclusive license rights to Kaken Pharmaceutical Co., Ltd., or Kaken, for the
commercialization of lenabasum for the treatment of systemic sclerosis and dermatomyositis.
CB1 Inverse Agonist Market
Opportunity
There has been clinical
interest in CB1 inverse agonists and antagonists for their potential applications in fibrosis, and metabolic disorders such as
obesity. In obesity, rimonabant (brand name Acomplia), a CB1 inverse agonist, received marketing authorization in Europe in 2006
prior to its subsequent withdrawal in 2008 due to safety concerns. In fibrosis, there are two companies with pre-clinical stage
CB1 inverse agonist programs. Goldfinch Bio has a preclinical program in diabetic nephropathy. Inversago has preclinical programs
in diabetic nephropathy, non-alcoholic steatohepatitis, and Prader-Willi syndrome.
We believe there
is continued interest in the potential benefits of reducing obesity in diabetic and other at-risk populations. Recent data
from two large clinical studies have demonstrated significant effects of GLP-1 agonists on weight loss in a diabetic
population. As of 2019, the market size for GLP-1 agonists was estimated at over $10 billion and expected to grow based on a
2016 estimate of approximately 1.9 billion adults worldwide who are overweight and at increased risk of developing
diabetes.We believe a CB1 inverse agonist that avoids the potential central nervous system adverse effects
associated with Acomplia could have potential clinical utility in helping treat metabolic disorders.
Market
Opportunity for CB2 Agonists That Add Benefit to Immune Checkpoint Inhibitors
The emergence of immune
checkpoint inhibitors, or ICIs has transformed the treatment paradigm for multiple cancers. The ICI market reached $24
billion worldwide in 2019 and is projected to grow to more than $50 billion by 2026. However, as of 2019,
it is estimated that as few as 44% of patients are eligible to receive and only 12.5% of all patients respond
to an ICI. Even for patients who achieve a response, disease progression often occurs due to resistance mechanisms. Therefore,
therapies that combine with checkpoint inhibitors to improve outcomes, for example by altering the tumor microenvironment to reduce
immunosuppression or fibrosis, may offer an attractive commercial opportunity. We are currently planning to conduct pre-clinical
studies of certain of our CB2 agonist compounds with ICIs for the treatment of certain cancer indications.
Intellectual
Property
We
have filed patent applications directed to lenabasum, compositions and methods for treating disease using lenabasum. If granted,
the resulting patents would expire on dates ranging from 2031 to 2034, subject to extension under certain circumstances. The patent
application filings are directed to:
● The use of lenabasum in the treatment of fibrotic diseases; and
Issued
Patents
On
August 6, 2019, the U.S. Patent and Trademark Office (“USPTO”) issued U.S. Patent No. 10,369,131 to the Company with
claims covering the use of pharmaceutical compositions comprising lenabasum for the treatment of dermatomyositis. The patent provides
exclusivity in the U.S. for this use of lenabasum to February 12, 2034.
On
December 18, 2018, USPTO issued U.S. Patent No. 10,154,986 to the Company with claims covering pharmaceutical compositions of
lenabasum. The patent provides exclusivity in the U.S. for these lenabasum compositions to February 12, 2034.
On
October 3, 2018, the USPTO issued U.S. Patent No. 10,085,964 to the Company with claims covering the use of pharmaceutical compositions
comprising lenabasum for the treatment of all fibrotic diseases, encompassing Corbus’ lead indications systemic sclerosis,
cystic fibrosis and others. The patent provides exclusivity in the U.S. for this use of lenabasum to February 12, 2034.
On
October 31, 2017, the USPTO issued U.S. Patent No. 9,801,849 to the Company with claims covering the use of pharmaceutical compositions
comprising lenabasum, for the treatment of all inflammatory diseases. The patent provides exclusivity in the U.S. for this use
of lenabasum to February 12, 2034.
On
November 27, 2017, the USPTO issued U.S. Patent No. 9,820,964 to the Company with claims covering the use of pharmaceutical compositions
comprising lenabasum for the treatment of all fibrotic diseases, encompassing the Company’s lead indications systemic sclerosis,
cystic fibrosis and others. The patent provides intellectual property protection in the United States for this use of lenabasum
to February 12, 2034.
On
September 20, 2018, we entered into an exclusive license agreement with Jenrin Discovery, LLC which provides us with an
exclusive worldwide license to develop and market cannabinoid compounds covered by the Jenrin issued patents and patent applications
that cover the composition and method of use of selective cannabinoid receptor modulators. The Jenrin intellectual property portfolio
includes sixteen granted United States patents, one pending United States application and twenty-two granted
or pending foreign patents and applications. This portfolio includes U.S. Patent No. 8,680,131, which granted with claims
covering the cannabinoid receptor blocker CRB-4001 and methods of using the same for treating obesity related disorders, diabetes,
various inflammatory disorders, various cardiometabolic disorders, various hepatic disorders, and/or various cancers. The licensed
intellectual property portfolio provides intellectual property protection in the United States for CRB-4001 and these uses to
July of 2033, not including any potential patent term extension.
Lenabasum
has been granted Orphan Drug Designation for cystic fibrosis, dermatomyositis and systemic sclerosis in the U.S. and in the European
Union and for systemic sclerosis in Japan. In addition, in systemic sclerosis and in cystic fibrosis, lenabasum has been
granted a Fast Track Designation by the FDA. Orphan
designation for lenabasum may be pursued for other inflammatory diseases in the U.S., Europe, and Japan. Orphan drug status provides
seven years of market exclusivity in the U.S. and ten years in Europe and Japan beginning on the date of drug approval.
Our
commercial success depends in part on our ability to obtain and maintain patent and other proprietary protection for lenabasum
and to operate without infringing the proprietary right of others and to prevent others from infringing our proprietary rights.
We strive to protect our intellectual property through a combination of patents and trademarks as well as through the confidentiality
provisions in our contracts. With respect to lenabasum, we endeavor to obtain and maintain patent protection in the U.S. and internationally
on all patentable aspects of the drug. We cannot be sure that the patents will be granted with respect to any patent applications
we may own or license in the future, nor can we be sure that any patents issued or licensed to us in the future will be useful
in protecting our technology. For this and more comprehensive risks related to our intellectual property, please see “Risk
Factors—Risks Relating to Our Intellectual Property Rights.”
In
addition to patent protection, we rely on trade secrets and know-how to develop and maintain our competitive position. For example,
aspects of our proprietary technology platform are based on unpatented trade secrets and know-how related to the manufacturing
of lenabasum. Trade secrets and know-how can be difficult to protect. We seek to protect our proprietary technology and processes,
in part, by confidentiality agreements and invention assignment agreements with our employees, consultants, scientific advisors,
contractors and commercial partners. These agreements are designed to protect our proprietary information and, in the case of
the invention assignment agreements, to grant us ownership of technologies that are developed through a relationship with a third
party. We also seek to preserve the integrity and confidentiality of our data and trade secrets by maintaining physical security
of our premises and physical and electronic security of our information technology systems. While we have confidence in these
individuals, organizations and systems, agreements or security measures may be breached, and we may not have adequate remedies
for any breach. In addition, our trade secrets may otherwise become known or be independently discovered by competitors. To the
extent that our contractors use intellectual property owned by others in their work for us, disputes may arise as to the rights
in related or resulting know-how and inventions.
We
also seek and will continue to seek trademark protection in the United States and outside of the United States where
available and when appropriate. We use and intend to use these registered marks in connection with our pharmaceutical research
and development as well as our product candidates.
Manufacturing
and Supply for Lenabasum and Our Other Product Candidates
Lenabasum
is a synthetic molecule and there are readily available supplies of all raw materials necessary for manufacturing lenabasum.
We have developed and validated a good manufacturing practice, or GMP, to manufacture lenabasum’s active pharmaceutical
ingredient and drug product through our contract manufacturers. Our existing active pharmaceutical ingredient contract manufacturer
has produced multi-kilogram scale bulk batches under GMP for our on-going clinical studies and is under agreement to produce sufficient
API required prior to submitting an NDA filing with the FDA. We do not own or operate manufacturing facilities for the production
of lenabasum. We expect to depend on third-party suppliers and manufacturing organizations for all our pre-clinical and
clinical trial quantities of raw materials and drug substance.
Regulatory
Matters
Government
Regulation
The
process of obtaining regulatory approvals and the subsequent compliance with appropriate federal, state, local and foreign statutes
and regulations require the expenditure of substantial time and financial resources. Failure to comply with the applicable requirements
at any time during the product development process, approval process or after approval, may subject an applicant to administrative
or judicial sanctions. These sanctions could include the FDA’s refusal to approve pending applications, withdrawal of
an approval, a clinical hold, warning letters, product recalls or withdrawals from the market, product seizures, total or partial
suspension of production or distribution, injunctions, fines, refusals of government contracts, restitution, disgorgement, or
civil or criminal penalties. Any agency or judicial enforcement action could have a material adverse effect on us.
Any
product development activities related to lenabasum or products that we may develop or acquire in the future will be subject to
extensive regulation by various government authorities, including the FDA, other federal, state and local agencies and comparable
regulatory authorities in other countries, which regulate the design, research, clinical and non-clinical development, testing,
manufacturing, storage, distribution, import, export, labeling, advertising and marketing of pharmaceutical products and devices.
Generally, before a new drug can be sold, considerable data demonstrating its quality, safety and efficacy must be obtained, organized
into a format specific to each regulatory authority, submitted for review and approved by the regulatory authority. The data are
often generated in two distinct development states: pre-clinical and clinical.
Development
of Drugs in the United States
Lenabasum
or other products that we may develop or acquire in the future must be approved by the FDA before they may be legally marketed
in the United States. For new chemical entities, the pre-clinical development stage generally involves synthesizing the active
component, developing the formulation and determining the manufacturing process, and drug stability as well as carrying out non-human
toxicology, pharmacology and drug metabolism studies that support subsequent clinical testing. These pre-clinical laboratory and
animal tests are often performed under the FDA’s Good Laboratory Practices regulations. A drug’s sponsor must submit
the result of the pre-clinical tests, together with manufacturing information, analytical data and any available clinical data
or literature and a proposed clinical protocol to the FDA as part of an IND application, which is a request for authorization
from the FDA to administer an investigational drug or biological product to humans. Similar filings are required in other countries.
The
clinical stage of development can generally be divided into three sequential phases that may overlap, Phase 1, Phase 2 and Phase
3 clinical trials. In Phase 1, generally, small numbers of healthy volunteers are initially exposed to single escalating doses
and then multiple escalating doses of the product candidate. The primary purpose of these studies is to assess the metabolism,
pharmacologic action and general safety of the drug. Phase 2 trials typically involve studies in disease-affected patients to
determine the dose required to produce the desired benefits, common short-term side effects and risks. Phase 2 studies are typically
well-controlled, closely monitored, and conducted in a relatively small number of patients, usually involving no more than several
hundred subjects. Phase 3 trials are intended to gather the additional information about effectiveness and safety that is needed
to evaluate the overall benefit-risk relationship of the drug and to provide an adequate basis for physician labeling. Phase 3
studies usually include from several hundred to several thousand subjects and are closely controlled and monitored. In addition
to these Phase 1-3 trials, other trials may be conducted to gather additional safety, pharmacokinetic and pharmacodynamic information.,
Pharmaceutical products with active ingredients equal or similar to those already approved by the FDA often have more streamlined
development programs than compounds entirely new to the agency, often skipping Phase 1 and 2 trials.
A
clinical plan must be submitted to the FDA prior to commencement of a clinical trial. If the FDA has concerns about the clinical
plan or the safety of the proposed studies, they may suspend or terminate the study at any time. Studies must be conducted in
accordance with good clinical practice and reporting of study progress and any adverse experiences is required. Studies are also
subject to review by independent institutional review boards responsible for overseeing studies at particular sites and protecting
human research study subjects. An independent institutional review board may also suspend or terminate a study once initiated.
Accordingly, we cannot be sure that submission of an IND will result in the FDA allowing clinical trials to begin, or that once
begun, issues will not arise that could cause the trial to be suspended or terminated.
Post-approval
studies, sometimes referred to as Phase 4 clinical trials, may be conducted after initial marketing approval. Sometimes, these
studies are used to gain additional experience from the treatment of patients in the intended therapeutic condition. In certain
instances, the FDA may mandate the performance of Phase 4 studies. In other situations, post-approval studies aim to gain additional
indications for a medication.
Special
Protocol Assessment
The
Federal Food, Drug, and Cosmetic Act directs the FDA to meet with sponsors, pursuant to a sponsor’s written request, for
the purpose of reaching agreement on the design and size of clinical trials intended to form the primary basis of an efficacy
claim in an NDA. If an agreement is reached, the FDA will reduce the agreement to writing and make it part of the administrative
record. This agreement is called a special protocol assessment, or SPA. While the FDA’s guidance on SPAs states that documented
SPAs should be considered binding on the review division, the FDA has latitude to change its assessment if certain exceptions
apply. Exceptions include public health concerns emerging that were unrecognized at the time of the protocol assessment, identification
of a substantial scientific issue essential to the safety or efficacy testing that later comes to light, a sponsor’s failure
to follow the protocol agreed upon, or the FDA’s reliance on data, assumptions or information that are determined to be
wrong.
Review
and Approval in the United States
Following
pivotal or Phase 3 trial completion, data are analyzed to determine safety and efficacy. Data are then filed with the FDA in a
New Drug Application, or an NDA, along with proposed labeling for the product and information about the manufacturing and testing
processes and facilities that will be used to ensure product quality. In the United States, FDA approval of an NDA must be obtained
before marketing a pharmaceutical product. The NDA must contain proof of safety, purity, potency and efficacy, which entails extensive
pre-clinical and clinical testing.
The
FDA will likely re-analyze the clinical trial data, which could result in extensive discussions between the FDA and us during
the review process. The review and evaluation of applications by the FDA is extensive and time consuming and may take several
years to complete. The FDA may conduct a pre-approval inspection of the manufacturing facilities for the new product to determine
whether they comply with current good manufacturing practice requirements and may also audit data from clinical and pre-clinical
trials.
There
is no assurance that the FDA will act favorably or quickly in making such reviews and significant difficulties or costs may be
encountered in our efforts to obtain FDA approvals. The FDA may require that certain contraindications, warnings or precautions
be included in the product labeling, or may condition the approval of the NDA on other changes to the proposed labeling,
development of adequate controls and specifications, or a commitment to conduct post-marketing testing or clinical trials and
surveillance programs to monitor the safety of approved products that have been commercialized. Further, the FDA may place conditions
on approvals including the requirement for a risk evaluation and mitigation strategy, or REMS, to assure the safe use of the drug.
If the FDA concludes a REMS is needed, the sponsor of the NDA must submit a proposed REMS; the FDA will not approve the NDA without
an approved REMS, if required. A REMS could include medication guides, physician communication plans, or elements to assure safe
use, such as restricted distribution methods, patient registries and other risk minimization tools. Any of these limitations on
approval or marketing could restrict the commercial promotion, distribution, prescription or dispensing of products. Product approvals
may be withdrawn for non-compliance with regulatory standards or if problems occur.
Orphan
Drug Designation
Under
the Orphan Drug Act, the FDA may grant orphan drug designation to a drug intended to treat a rare disease or condition, which
is generally a disease or condition that affects fewer than 200,000 individuals in the United States. Orphan product designation
must be requested before submitting an NDA. After the FDA grants orphan drug designation, the identity of the therapeutic agent
and its potential orphan use are disclosed publicly by the FDA. Orphan product designation does not convey any advantage in or
shorten the duration of regulatory review and approval process. In addition to the potential period of exclusivity, orphan designation
makes a company eligible for grant funding of up to $400,000 per year for four years to defray costs of clinical trial expenses,
tax credits for clinical research expenses and potential exemption from the FDA application user fee.
If
a product that has orphan designation subsequently receives the first FDA approval for the disease or condition for which it has