Corbus Pharmaceuticals Holdings (CRBP) is engaged in controversial yet lucrative medical cannabis sector. The company is currently working to develop  anabasum, an endocannabinoid-mimetic drug to treat inflammatory and fibrotic diseases. It recently announced the results from the previously completed Phase 2 clinical study of the lead drug candidate for the treatment of diffuse cutaneous systemic sclerosis. The company outlined its further plans with the drug as it plans to start the Phase 3 study for Systematic Sclerosis in the fourth quarter. The enrollment is expected to be completed by 2018 and the study is likely to culminate in 2019.

Anabasum is the only drug candidate in Corbus’s pipeline. However, the drug is being tested for four different indications. For systematic sclerosis, it has already advanced to Phase 3 while for cystic fibrosis, it is in Phase 2B. For two other indications, Dermatomyositis and Systematic Lupus Erythematosus, the drug is in Phase 2. The global market size for cystic fibrosis isexpected to reach $4.5 billion by 2019. These multiple studies ensure that the company has several catalysts coming up in the near future, which may fuel the growth of the stock price. The stock price recently saw some dip as it lost nearly 7 percent of its value in the past one month. This dip offers an exciting opportunity for mid-term investors to create a position in the stock. The investment is expected to yield good results as the company progresses with its upcoming catalysts in the form of advancement in drug testing phases.

Risks

The company has only one drug in its pipeline, though the drug is being tested for multiple indications. The reliance on one drug makes this stock a slightly risky bet. The company currently has negligible revenue, which may cause some liquidity crunch. Apart from this, Corbus is engaged in developing cannabinoid based drug. Any negative action from the regulators with regard to cannabis may have adverse impact on the company’s fortunes. However, with over 100 percent growth in the past 12 months, Corbus stock has the potential to provide matching returns for its high risk profile.

Catalysts

The company has several catalysts coming up as it progresses with the testing of its lead drug candidate for different indications. Its earliest upcoming catalyst is in the fourth quarter as it initiates the Phase 3 study for the treatment of diffuse cutaneous systemic sclerosis.

Management

Yuval Cohen, PhD

Chief Executive Officer

Yuval Cohen, Ph.D., joined Corbus in July 2013 as Chief Executive Officer. Prior to joining Corbus, he was the President and co-founder of Celsus Therapeutics (Nasdaq CLTX) from 2005 to June 2013. Under Dr. Cohen's leadership, Celsus successfully developed five novel anti-inflammatory drug programs - including two in Phase II - focusing on allergies and autoimmune diseases of the skin, airways, digestive tract and eye. 

Sean Moran

Chief Financial Officer

Sean Moran, CPA, joined Corbus in January 2014. He has more than twenty years of senior financial experience with emerging biotechnology, drug delivery and medical device companies. Mr. Moran is a CPA and MBA by training having earned his M.B.A. and a B.S. in Accounting from Babson College.

Investment strategy

Entry - Current price point

Profit Point – at the time of announcement of Phase 3 Study start in Q4.

Hold duration – Medium Term

Price Target (consensus) - $22.25

Exit - $7

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