Corbus Pharmaceuticals Holdings, Inc. (CRBP) Earnings Call Transcript & Summary

Hello, and welcome to the Corbus Pharmaceuticals Conference Call. [Operator Instructions] This conference is being recorded at the company's request and will be available at the company's website approximately 2 hours following the end of the call. I would now like to turn the call to your host, Ted Jenkins, Senior Director, Investor Relations and Corporate Communications. Please go ahead, sir.

Thank you, operator. Good morning, everyone. 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 the Securities Exchange Commission's website, and we encourage you to review these documents carefully. Joining me on the call today are Dr. Yuval Cohen, our Chief Executive Officer; Dr. Barbara White, our Chief Medical Officer and Head of Research; Sean Moran, our Chief Financial Officer; and Craig Millian, our Chief Commercial Officer. With that, it is my pleasure to turn the call over to Yuval.

Thank you, Ted. It's my pleasure to welcome everyone to today's call, and thank you for joining us on such short notice. As you know, we have been emphasizing our interest in expanding our pipeline through a series of bolt-on acquisitions. The strategy is straightforward, leverage our expertise in immunology and our experience in drug development to build a diverse pipeline that mitigates risk by using multiple modalities to focus on inflammation, fibrosis, metabolism and immuno-oncology. Today, we announced our first transaction, expanding our pipeline by adding 2 novel anti-integrin monoclonal antibodies that we intend to develop for immuno-oncology and fibrosis. One from the University of California, San Francisco, and the other from Panorama Research Inc. As Barbara will detail shortly, the cytokine TGF-beta and its role in promoting inflammation, fibrosis and cancer has been the focus of extensive academic and industry research, giving rise to testing different approaches to its inhibition. One recent approach is to target specific cell surface integrins that activate TGF-beta, and we joined others who are pursuing this approach. A number of external clinical studies are underway exploring this mechanism of action in both solid tumors and fibrotic diseases, and there has been significant recent business development activity in integrin-targeting assets. The 2 antibodies we've acquired have properties we find attractive, and we believe position them favorably in the field. CRB-601 is highly specific for the integrin alpha V beta 8, licensed from UCSF and invented in the lab of Dr. Stephen Nishimura. As Barbara will review, CRB-601 has generated preclinical data related to binding and functional activity showing high potency. We believe CRB-601 could offer advantages over competitor approaches and expect to initiate Phase I clinical studies next year. CRB-602 has dual specificity for alpha V beta 6 and alpha V beta 8 integrins and is licensed from TRI. We think targeting both of these integrins may be particularly helpful in targeting fibrotic diseases. Currently, anti-alpha V beta 6 therapeutics are being developed for IPS and PSC. We also plan to start clinical studies with CRB-602 next year. These 2 new programs sit uniquely into our pipeline, alongside our existing programs, which focus on the endocannabinoid system. They align with and extend the disease areas we are pursuing and will benefit from our expertise in drug development. Lastly, we reported $125 million in cash as of March 31, which we expect to fund us through the first quarter of 2024. So we are well capitalized to advanced our expanded pipeline to several meaningful clinical milestones. I would now like to turn the call over to our Chief Medical Officer and Head of Research, Dr. Barbara White, to provide us with details of our program expansion plan and the news we announced today. Thank you, Barbara.

Thank you, Yuval. We are delighted to have licensed 2 monoclonal antibodies, or MABs, that bind to integrins and block integrin-mediated activation of transforming growth factor beta, or TGF-beta. TGF-beta needs to be activated from its latent form to exert its biologic activities. Active TGF-beta is a multifunctional cytokine involved in many cellular processes, including cell growth and differentiation, immune responses, wound healing and tissue repair. Our new MABs will be developed as treatments for solid tumors and fibrotic diseases. CRB-601 was designed in Dr. Stephen Nishimura's lab at UCSF and binds to the integrin alpha V beta 8 with high affinity with IC50 for inhibiting activation of TGF-beta in the picomolar range. Integrins on membrane-bound, alpha-beta heterodimers that mediate interactions between cells and between cells and extracellular matrix. Integrins are involved in many body processes, including cell growth, differentiation, survival, malignancy, fibrosis, immune responses, wound healing and angiogenesis. The alpha V integrins including alpha V beta 6 and alpha V beta 8 activate TGF-beta. Some human epithelial malignancies are carcinomas, express alpha V beta 8 themselves, which activates latent TGF-beta in their microenvironment. Active TGF-beta suppresses immune responses that control growth and metastases of established tumors. It converts non-regulatory CD4-positive T-cells into regulatory T-cells, which might be considered checkpoint cells because they suppress activity of other activated immune cells and turn off antitumor immune responses. Activation of TGF-beta leads to both reduction in CDA T-cell numbers and killing of tumor cells. TGF-beta has other effects beyond the immune system that promote tumor growth and metastases. Importantly, overexpression of alpha V beta 8 by tumor cells and expression of TGF-beta in tumors have both been linked to poor clinical outcomes. Thus, we and others believe that inhibiting TGF-beta activation may provide efficacy in treatment of cancers. CRB-601 is a higher affinity, humanized version of an anti-alpha V beta 8 monoclonal antibody called C-64, also developed by Dr. Nishimura's lab, which has been found to be active in animal cancer models. In the MC-38 colon carcinoma tumor model, C-64 reduced tumor volume at day 6 by nearly 50% as a single agent and nearly eliminated tumor growth when combined with anti-PD-1 monoclonal antibody. Complete response rates in the MC-38 model were 10% for C-64, 40% for anti-PD-1 and 60% when the 2 agents were combined. We look forward to sharing with you data specific to CRB-601 after they are made public by Dr. Nishimura's lab. We believe potential advantages of CRB 601 are the following: It inhibits TGF-beta from ever becoming activated; it is very potent; and it has been specifically designed to inhibit activation of TGF-beta, not only in a form that is released from its association with the TGF-beta latency associated peptide, but also in a newly described form of active TGF beta that remains associated with the TGF-beta latency associated peptide. This latter form of active TGF-beta was recently described by Dr. Nishimura and colleagues and is thought to be the predominant form of TGF-beta activated by alpha V beta 8 on tumors. We will develop CRB-601 for the treatment of solid tumors in combination with standard treatments, including checkpoint inhibitors. We expect to be in the clinic in 2022. We've also announced today that we have acquired CRB-602 from Dr. Jim Larrick and his team at Panorama Research Inc. CRB-602 is a MAB that binds both alpha V beta 6 and alpha V beta 8 to inhibit their activation of TGF-beta. The alpha V beta 6 integrin is expressed by epithelial cells during wound healing and tumors of epithelial cell origin. Over-expression of alpha V beta 6 has been linked to fibrosis in idiopathic pulmonary fibrosis. We expect that CRB-602 may provide potential therapeutic benefit in both byproduct diseases and cancer. We also expect to complete IND-enabling studies and manufacturing in 2022. With that, I'll turn the call back over to Yuval.

Thank you, Barbara. Under the combined terms of the 2 exclusive licensing agreements, Corbus will pay $2 million upfront and will make potential development and sales milestone payments, totaling up to $206 million and pay low single-digit royalties on sales. To close, I want to reiterate how excited we are about our expanding pipeline and also mentioned that we have posted a new investor presentation on our updated website that details the data and upcoming expected milestones we refer to on today's call. Given our skill set of understanding global, complex clinical programs, and our expertise in immunology, along with a strong cash position, we believe we have a significant opportunity to advance novel therapeutics that will have a meaningful impact on patient care. I would like to thank you all for your time and attention. I will now turn the call back over to the operator to open the call for questions from the audience.

[Operator Instructions] Our first question today is coming from Brian Abrahams from RBC Capital Markets.

Congrats on the transaction. And I guess maybe starting off for 601. Barbara, I was wondering if you could expand a little bit on how the high potency and the differential interactions with LAP and the TGF-beta pathway might create ultimately a differentiated mechanism and clinical profile versus other alpha V beta 8 development?

Sure. Thank you, Brian, for the question. And the work is a very recent work from Dr. Nishimura's lab and was published in 2020, in which they used some very sophisticated structural analysis and proposed that in the context of tumors where alpha V beta8 is expressed on the tumor and TGF-beta may be expressed, for example, on a T regulatory cell. That the activation which means the ability to exert its biologic effect of TGF-beta occurs without TGF-beta actually being physically released from the cage that it's in which keeps it inactive, but it remains in close proximity and that it, nonetheless, can activate TGF-beta on T regulatory cells and cause them -- on a range of T-cells and cost T regulatory cells to exert their activity and induced immunosuppression in tumors. And in this actual physically constrained environment, it would be somewhat difficult to target the TGF-beta with, for example, an anti-TGF-beta monoclonal antibody. And the antibody that they've developed is very specifically designed to have high potency to inhibit this type of activation of TGF-beta. So it's simply that very high potency inhibits the activation of TGF-beta that remains associated with its cage, which is thought by their lab at least to be the predominant form involved in activation of TGF-beta in a tumor microenvironment.

Got it. That's really helpful. And then maybe for 602. Can you talk about some of the preclinical work that you might do and some of the preclinical models you look at that might best discern the potential differentiation of the dual beta 6, beta 8 interaction and where that might be best developed?

Sure. We think that the combination of targeting beta 6 and beta 8 may be particularly important in fibrotic diseases or in cancers of epithelial cell origin, where both are expressed. We think that what we're looking for in this antibody will again be high potency. We think that's obviously reasonably important. And we will be looking for its ability to have activity in models of both fibrotic disease and tumor. And we will certainly be looking in the tumor models for its ability to augment effects of standard therapies, such as checkpoint inhibitors. And we'll be looking to see how it compares to other antibodies that are being -- or similar antibodies that are being developed in the space.

Got it. One more quick one, if I could squeeze it in. Just sort of, I guess, bigger picture. Can you talk about what this means for additional business development plans? You did mention you have a balance sheet that will take you out several more years. So I guess, how are you thinking about additional BD, potentially for later-stage assets and your appetite there? And then just your overall -- I guess, implications for your overall views and strategy with respect to lenabasum and the upcoming readout there?

Thanks, Brian. The -- so the strategy is as follows: We are looking for assets that are in immunology that we can leverage our expertise. These 2 assets we think fit uniquely with what we already have, which is the endocannabinoid system. Together, they're really focused on these 4 areas: inflammation, fibrosis, immuno-oncology and then through the CD1 work on metabolism. Having said that, we're very, very keen on additional bolt-on acquisitions. And we're particularly interested in one that would be in the clinic or ready for the clinic. But again, this is sort of the filter that we're looking at these opportunities through. It's unlikely, for example, Brian, to use sort of an extreme example. I can't see Corbus bringing anything around sort of gene therapy. It just doesn't fit who we are and what we do, but expect to look for additional acquisitions. And one of the guiding principles there as well to think about is, if you think about our pipeline as it stands now, we have programs that are, we think, have a high probability of success because they're following a validated target, and we have programs where we will be the first to use that mechanism of action. We'd like to continue having that mix, so we expect to see more of that.

Our next question today is coming from Maury Raycroft from Jefferies.

Congrats on the update today. Question I was going to ask is just whether for both antibodies, do you have rights that go beyond 601 and 602 to next-gen molecules? And do you know for sure that 601 and 602 are going to be the candidates that you eventually move into the clinic?

Maury, I wonder if you'd repeat that question again, it dropped off at least. I didn't hear it at the end?

Sure. For 601 -- can you hear me now?

Yes.