October 25, 2016
By Alex Keown, BioSpace.com Breaking News Staff
NORWOOD, Mass. – Shares of tiny Corbus Pharmaceuticals are down more than 20 percent following the publication of an article that said the company was “headed for a big fall.”
Writing in The Street this morning, Adam Feuerstein cited his unnamed healthcare investor source who indicated he was shorting Corbus, stating the company’s only drug candidate, Resunab, does not work. His comments come less than a week after the drug received Orphan Drug designation in Europe. Resunab was granted Orphan Drug Designation for the treatment of systemic sclerosis by the FDA in June 2015.
“Corbus is disappointed that Adam did not contact the company with questions or to seek comment. At this time Corbus looks forward to reporting top line results from the systemic sclerosis study this quarter,” David Schull, a spokesperson for Corbus told BioSpace in an email this morning.
The company has been leveraging its way into the cystic fibrosis market behind its experimental drug, Resunab. The drug is currently being evaluated in three separate Phase II clinical studies in diffuse cutaneous systemic sclerosis (scleroderma), cystic fibrosis and diffuse cutaneous, skin-predominant dermatomyositis. At the end of summer, the U.S. Food and Drug Administration approved an open-label extension to the Phase II trial of Resunab for systemic sclerosis, allowing patients to receive the drug for an additional 12 months. Next year Corbus, which has 27 employees, plans to launch a Phase II trial to see how Resunab fares in treating systemic lupus erythematosus. That trial will be sponsored by the National Institute of Health.
But, Feuerstein’s source, which he said has a proven track record with shorting other companies such as Mast Therapeutics and Celldex Therapeutics , believes the drug will not work as the company hopes. Resunab is a preferential agonist to the CB2 receptor expressed on activated immune cells and fibroblasts. The source said, as cited by Feuerstein, it is “not clear what the CB2 receptor does, or if it does anything.” The source goes through the drug’s history as a pain reliever, from its origins with Sumner Burstein and Atlantic Pharmaceutical, to Indevus Pharmaceutical and then to JB Therapeutics, which merged with Corbus in 2014. Throughout its history as a pain reliever, the drug proved to be ineffective, Feuerstein’s source said. Corbus, though, changed the drug’s mechanism of action and its disease target, which it has touted as effective in treating the lung fibrosis. While the drug may have demonstrated efficacy in animal models, Feuerstein’s source said the drug has not been proven to be antifibrotic in humans. He also said the only drug that demonstrated some antifibrotic efficacy in humans, pirfenidone, failed treating scleroderma.
“What Corbus is attempting with Resunab is similar to a hunter trying to kill a rhinoceros with a BB gun,” Feuerstein’s source said. “I wish Corbus good luck. They’ll need it. Other companies have tried to develop CB2 agonists but gave up. Corbus remains. Maybe Resunab can make medical history after 30 years of failed efforts. Maybe, but I doubt it.”
Shares of Corbus have fallen this morning from Monday’s close of $8.90 per share to a low of $6.90 this morning. Over the past year shares of Corbus have skyrocketed from $1.90 per share this time last year to a high of $9.79 earlier this month. The stock performance has made Corbus the best publicly traded biotech in Massachusetts, the Boston Business Journal’s Don Seiffert, wrote last week.
Corbus will soon announce data results from its systemic sclerosis trial, as well as its looming data from the cystic fibrosis trial which is expected in early 2017. The Journal noted that company officials are certainly anticipating positive results based off company executives snapping up shares of Corbus, according to insider trading reports.
