Corbus Pharmaceuticals Holdings, Inc. (CRBP) Q1 2019 Earnings Call Transcript

As we approach the completion of RESOLVE-1 study, over the next year, we will focus on developing commercialization strategies for Lenabasum globally. Importantly, our unencumbered global patent rights for Lenabasum increase the opportunities for strategic partnership for commercialization of lenabasum. As a reminder, we see significant commercial potential for lenabasum, targeting about 350,000 patients in the major markets. Our first major expansion for lenabasum outside the US remains on track. Our partnership in Japan with Kaken Pharmaceuticals presents an important opportunity for Corbus, as Japan itself represents a market of about 28,000 systemic sclerosis patients and 9,000 dermatomyositis patients, who have limited therapeutic options.

Our Japan deal with -- the Japan deal we announced in the first quarter has already resulted in a $27 million upfront payment, with additional milestone payments due of up to $173 million as well as royalties. We continue to evaluate other partnership strategies in international markets and as I've noted previously, we view the Kaken agreement as a model for pursuing similar licensing deals in geographies less conducive to development by a US company of our size, while providing near and longer term capital to fund our growth.

Looking ahead, we anticipate that CRB-4001 will enter Phase 1 safety testing at the end of 2019. Upon a successful completion of this Phase 1 study, the National Institutes of Health has committed to sponsor and conduct a follow-on early Phase 2 study to test CRB-4001 for safety and effects on metabolism and other biomarkers in patients with metabolic syndrome or NASH. It is our intention to develop CRB-4001 for the treatment of NAFLD or NASH. We are on track to select our next candidates for pre-IND development. We are excited about the potential of the endocannabinoid system targeting compounds in our library and we'll describe some of these compounds to you in the near future. Our clinical development and commercialization opportunities continue to be supported by the strength of our balance sheet which will fund our operations through the release of our pivotal Phase 3 data for Lenabasum next summer and beyond to the end of 2020. We'd like to provide a more detailed update on our clinical pipeline, and with that let me turn the call over to Dr. Barbara White, our Chief Medical Officer. Barbara?

Barbara White -- Chief Medical Officer

Thank you, Yuval. Starting with our lead clinical assets, lenabasum is currently being evaluated in several late stage studies. The RESOLVE-1 Phase 3 study of lenabasum for treatment of systemic sclerosis completed enrollment on May the 1st. This was an important milestone to support potential filing of a new drug application in US and marketing authorization applications elsewhere around the world. The RESOLVE-1 Phase 3 study has 12 months of active dosing with lenabasum or placebo, plus one month follow-up. Database lock and then unblinding of treatment assignments in this study will occur in mid-2020 and we anticipate topline data will be available soon thereafter.

Following a Type C meeting with the US Food and Drug Administration, we announced that the ACR CRISS score at week 52 will be the primary efficacy endpoint in the RESOLVE-1 Phase 3 study in US, and the change in modified Rodnan Skin Score or mRSS will become a secondary efficacy outcome rather than the primary. ACR CRISS stands for American College of Rheumatology Combined Response Index in diffuse cutaneous Systemic Sclerosis. ACR CRISS was the primary endpoint in the previous Phase 2 study. No changes to size or length of the Phase 3 study are required. As a reminder, systemic sclerosis affects approximately 200,000 patients in the US, Europe and Japan.

DETERMINE is our second Phase 3 program, evaluating the efficacy and safety of lenabasum for the treatment of dermatomyositis, the study is ongoing. The Phase 3 study design is consistent with guidance from the FDA at an end of Phase 2 meeting, formal consultation with Japanese regulatory authorities and scientific advice from European regulatory authorities. Dermatomyositis affects approximately 80,000 people in the US, Europe and Japan. As for our one genetic disease indication, enrollment remains on track for our ongoing Phase 2b study of lenabasum for the treatment of cystic fibrosis, with topline data expected in 2020.

As a reminder, our Phase 2b study in CF has rate of pulmonary exacerbations as the primary endpoint. Pulmonary exacerbations are responsible for about half of long-term decline in lung function in cystic fibrosis. Despite major advances in the treatment of CF, there remains a need for safe and effective treatment to reduce number in severity of pulmonary exacerbations in people with CF. In our Phase 2b study, we are testing the opportunity for lenabasum to address this unmet need. We are grateful to the Cystic Fibrosis Foundation who to date has provided Corbus with the opportunity to receive up to $30 million in awards to fund our CF program. Cystic fibrosis affects approximately 70,000 people in the US and Europe.

With that I'll turn the call back over to Yuval.

Yuval Cohen -- Chief Executive Officer

Thank you Barbara. Now let me briefly comment on our financial position. And as I mentioned earlier, we closed the first quarter of 2019 with a strong balance sheet with $89.9 million in cash that funds our operations through lenabasum's pivotal systemic sclerosis Phase 3 data. We believe that the Company is well-funded into the fourth quarter of 2020.

Before I turn the call over to questions and answers, let me reiterate the progress that we are making against our clinical programs and in laying a solid foundation toward commercialization. During the quarter, to summarize, we bolstered our leadership team and Board with key additions that bring commercial expertise. We continue advancing our commercial expansion outside of the US, for example in Japan, and we made progress with our late stage clinical programs.

With our financial strength, strategic optionality through unencumbered global commercial rights and initial commercial planning, we are confident that Corbus is well positioned as we approach potential FDA approval for lenabasum and commercial launch. We look forward to continuing to update you on our progress and we plan to take CRB-4001 into Phase 1 testing, advance select compounds from our portfolio of novel drug candidates and develop our commercialization strategy.

On that note, I'm very pleased to announce that the Company will be hosting a Research and Development Analyst Day in York City in June. We will be releasing the date shortly and we are looking forward to seeing you there and sharing with you our roadmap to becoming the leader in the treatment of inflammatory and fibrotic diseases using novel drugs that target the endocannabinoid system.

With that I'd like to turn it over to the operator for any questions from our audience today. Operator?

Questions and Answers:

Operator

Thank you. At this time we will be conducting a question-and-answer session.

(Operator Instructions)

Our first question today is from Brian Abrahams of RBC Capital Market. Please go ahead.

Owen Ou -- RBC Capital Markets LLC -- Director

Hey, guys. This is Owen on for Brian. Thanks for taking our questions and congrats on all the progress this quarter. Couple of questions on CRISS. First question, I wonder if you could talk a little bit more about how the endpoint weights the different aspects that go into it, all of the secondaries and what sort of profile you would need to show in those secondaries to sort of validate the primary CRISS outcome?

And then secondly, are you planning on looking at the median again? And if so, are there any additional analysis you think you might conduct that would perhaps demonstrate the effect of lena on organ involvement, like looking at the percentage of patients in each group that had 0 CRISS scores or something of that nature? Thanks.

Yuval Cohen -- Chief Executive Officer

Thanks, Owen. Barbara I'm going to turn that over to you.

Barbara White -- Chief Medical Officer