Why Corbus Pharmaceuticals Holdings Inc (CRBP) Climbed 23% This Week

While the trials are double blinded, that doesn’t mean that anecdotally there isn’t anything that insiders know that we don’t. There is one portion of the scleroderma trial that Corbus was able to get open label approval for from the FDA in April, a good sign that not only does Resunab have a good safety profile, but that patients in the trial want to continue taking it, anecdotally providing evidence of efficacy.

Be that as it may, there is plenty of reason to expect a good top line readout come December for both cystic fibrosis and scleroderma besides the open label extension already granted for the latter. Resunab has already shown a very moderate side effect profile even at high doses, with mild dizziness featured at the top, a common effect of cannabinoids on naïve users. Second, cannabinoids are already known to exhibit strong anti-inflammatory characteristics by inserting themselves into a chain of cellular reactions and stopping the inflammatory response in its tracks. Resunab’s active ingredient, ajulemic acid, is estimated to be 100x more powerful than naturally-occurring cannabinoids in shutting down inflammation.

While none of the diseases that Resunab is being trialed for are caused by inflammation, inflammation is perhaps the biggest factor in worsening the symptoms of these diseases. By shutting the process down, Resunab does not cure the illnesses, but aims to make them much more manageable with less morbidities.

At this point, Corbus Pharmaceuticals Holdings Inc (NASDAQ:CRBP) is getting much too close to two critical readouts for current gains to quickly evaporate. While it is certainly possible that shares fall back down somewhat on profit taking in the coming days, we don’t see shares going back down below $3 at this point, unless December data proves disappointing in terms of efficacy in cystic fibrosis and scleroderma. Cystic fibrosis results are a little harder to estimate, but the scleroderma indication looks good considering the open label extension already granted.

If only the scleroderma indication is positive come December, Corbus could easily double from these levels by the end of the year to trade above $7. If both are positive, an overnight tripling is possible to trade over $10. With $22 million in cash on recent direct offering, Corbus has more than enough capital to make it past Phase II, and will likely recapitalize at the beginning of next year to push forward with a Phase III pivotal trial.

If both Phase II’s fail to show efficacy, Corbus Pharmaceuticals Holdings Inc (NASDAQ:CRBP) could move back to penny stock territory, though this is unlikely. For now, all rides on December readouts. Both Corbus insiders and institutional health care investors seem to be betting on good news by the end of the year.

Disclosure: The author was long CRBP at the time of writing.

Note: This article is written by Rafi Farber and was originally published at Market Exclusive.