Edited Transcript of CRBP earnings conference call or presentation 8-Nov-18 1:30pm GMT

As a company, we've come a long way since we launched Corbus 4.5 years ago. From the start, we believe that there will be strong therapeutic rationale to target the body's endocannabinoid system to modulate inflammation and fibrosis. We're pleased that our core thesis is being validated and that our vision is becoming a reality: to be a leader in the treatment of inflammatory and fibrotic diseases with small molecules specifically designed to target the endocannabinoid system.

At Corbus, we have assembled a team of leading industry experts, from R&D to manufacturing to patient advocacy to regulatory affairs, who enables us to -- who enable us to move forward with a focus on innovation and quality. Our senior leadership team is supported by a dedicated team of professionals across the company who are a most valuable asset. I want to thank everyone on the Corbus team for their hard work and commitment to our mission and to the patients that we seek to serve.

As we think about the future, there are a few key points I would like to highlight today about our therapeutic approach, research pipeline and significant market opportunity. The endocannabinoid system is a master regulator of inflammation and fibrosis in the human body. Its major receptors are CB2 and CB1. These are GPCRs that are -- that have broad applicability throughout the body. The pathways involved have been the focus of extensive research for the past 20 years and are very well understood. What's been missing are drug candidates that can very specifically target this biology safely and efficiently.

At Corbus, we've taken on this challenge and approached it in a novel way by coupling the well-understood biology of these receptors with traditional pharmaceutical rational drug design approaches. We begin -- we began these efforts at our inception with our drug candidate lenabasum and recently expanded it dramatically with the Jenrin transaction. We now have a truly diversified pipeline with late- and early-stage programs and the industry's leading library of more than 600 unique compounds targeting the endocannabinoid system. With assets ranging from early- to late-stage development, strong intellectual property and global commercial rights, Corbus is positioned to take advantage of this significant market opportunity for endocannabinoid system-targeting drugs designed to potentially treat a multitude of inflammatory and fibrotic diseases.

We believe the timing of our own pipeline, with our recent patent extended into the -- well into the mid-2030s and our goal of commercial launch in 2021, is shaping up to be very advantageous since 4 of the current top drugs that are used to target multiple inflammatory indications are finding themselves at the end of their patent protection, bringing to an end combined annual sales of over $40 billion. Lenabasum is a drug candidate with a unique mechanism of action, activating the CB2 receptor in immune and other cells, coupled with applicability across a range of potential rare indications. We have demonstrated with lenabasum that rationally designed synthetic small molecules can be successfully applied to target the endocannabinoid system and that there are considerable advantages to doing so. We are excited about lenabasum and the potential it has to treat inflammation and fibrosis in several rare inflammatory indications, affecting hundreds of thousands of people. I will review the progress we are making in the clinic shortly.

With the Jenrin transaction, Corbus has transformed from a single-asset company to a multi-asset company with what we believe is one of the industry's most innovative pipelines. We believe we are now positioned to be the leader in the treatment of inflammatory and fibrotic diseases with small molecules that's specifically designed to target the endocannabinoid system.

As part of this 600-compound transaction, we have chosen to focus first on CRB-4001, a second-generation peripherally restricted CB1 inverse agonist. Initial target for potential development are fibrotic liver, lung, heart and kidney diseases. While both lenabasum and CRB-4001 targe the endocannabinoid system, they do so through differentiated mechanisms of action. Importantly, CRB-4001's unique mechanism of action opens the door to evaluating potential efficacy in additional indications, including common ones like NASH. While lenabasum is a CB2 agonist targeting immune cells in rare inflammatory diseases, CRB-4001 targets the second endocannabinoid receptor, CB1, and rather than activating it, it inhibits its activity. This is a known biological mechanism for reversing inflammation in specific organs such as the liver.

CRB-4001 is also the first time we find ourselves competing directly with a big pharma. CRB-4001 is competing directly with an experimental CB1-targeting drug for NASH from Johnson & Johnson. Their program has just completed Phase Ib, but we are confident that we will catch up with them soon. We believe CRB-4001 has several advantages, primarily because it is a synthetic oral drug rather than an injectable monoclonal antibody.

Now let me provide more details on lenabasum's key indications, the clinical pipeline and the anticipated market opportunity. Lenabasum continues to progress through the clinical -- to the clinic in late-stage clinical studies for 4 indications. To set the stage in terms of overall market opportunity, earlier this year, we engaged the market research firm Health Advances to provide detailed demographic and market opportunity research on our targeted indications for lenabasum, including systemic sclerosis, dermatomyositis and cystic fibrosis. Health Advances determined that, combined, there are approximately 350,000 individuals in the U.S., Europe and Japan suffering from these 3 rare diseases, with a total estimated potential annual peak sales of up to $5 billion. This excludes the potential market for systemic lupus erythematosus or SLE, which we will discuss later on.

For the orphan disease systemic sclerosis, the most lethal of the systemic sclerosis -- of the systematic autoimmune diseases, causing organ inflammation, fibrosis and vascular damage, we are currently conducting a single Phase III registrational study titled RESOLVE-3 (sic) [RESOLVE-1]. Enrollment remains on track, with top line data expected in 2020.

Systemic sclerosis, which affects approximately 200,000 patients in the U.S., Europe and Japan, has an estimated annual market opportunity of roughly $2.2 billion. These -- there are no approved drugs for systemic sclerosis, and the standard of care involves potent and often toxic immunosuppressive therapies. Sadly, mortality rates for SSC is about 50%.

We recently also presented 18 months data from our systemic sclerosis Phase II open-label extension study at the American College of Rheumatology 2018 Annual Meeting in Chicago. As a reminder, a reduction of 5 points on the mRSS score is considered medically meaningful. At the 6-month mark, mRSS reached a minus of 8.4; at the 12-month, minus 9.8. And now at 18 months, it has reached a minus 10.7 points.

Similarly, the ACR CRISS at 6 months reached 65%. At 12 months, it was as low as -- high as 77%. And at 18 months, it has reached a high of 99%. Furthermore, at the 18-month time point, 87% of patients have now shown a decrease in mRSS of at least 5 points, and 50% of patients have reached a CRISS score of 100%.

For dermatomyositis, another orphan autoimmune disease, characterized by chronic muscle inflammation accompanied by skin and internal organ damage, our development program is currently on truck -- track for a Phase III study, expected to commence at the end of 2018. Dermatomyositis affects approximately 80,000 patients in the U.S., Europe and Japan and represents an annual market opportunity of up to $2 billion. Like systemic sclerosis, no drugs are approved for dermatomyositis.

At the recent 2018 ACR Annual Meeting, we also presented 12-month data from our dermatomyositis Phase II open-label extension study, in which mean improvement in CDASI activity score now reached a minus of 17.6 points, following the 6-month time point of 15.4 points. To put this in context, an improvement of just minus 4 to 5 points in CDASI activity score is considered medically meaningful. In fact, at the 12-month time point, 84% of patients have now shown a decrease in CDASI of at least 10 points.

Turning to the cystic -- to cystic fibrosis, an orphan genetic disease characterized by chronic lung inflammation that leads to lung damage and fibrosis. Our program is currently in its second Phase II study, evaluating pulmonary exacerbations as the primary efficacy endpoint, the first time the FDA has agreed to this endpoint for use as a registrational endpoint. It takes into account the specific clinical expected benefits from the use of drugs targeting inflammation.

The study also remains on track, and we expect to report top line data in 2020.