What's in the Cards for Corbus (CRBP) This Earnings Season?

Shares of Corbus Pharmaceuticals Holdings, Inc. CRBP have slumped 9.8% compared with the industry’s decline of 16.1% in the past year.

In the last reported quarter, the company’s incurred loss that was wider than the Zacks Consensus Estimate. Moreover, Corbus has missed earnings estimates in all of the trailing four quarters, the average negative earnings surprise being 54.08%.

Let’s see how things are shaping up prior to the announcement of the upcoming fourth-quarter and full-year 2018 results.

Factors Likely to Impact Q4 Results

Corbus Pharmaceuticals is a clinical-stage drug development company focused on treating inflammatory and fibrotic diseases through the endocannabinoid system (“ECS”) pathways.

The company’s lead product, lenabasum is a novel synthetic, oral, endocannabinoid drug designed to resolve chronic inflammation and fibrotic processes. The candidate is being developed to treat four life-threatening diseases — systemic sclerosis (SSc), cystic fibrosis (CF), dermatomyositis (DM) and systemic lupus erythematosus (SLE).

Corbus expects to report top-line results from the phase III RESOLVE-1 study on SSc in 2020. 

Enrollment and dosing are ongoing in a phase IIb study for the treatment of CF and the company expects to report top-line data from the study in 2020. 

In December 2018, the company initiated the phase III DETERMINE study designed to evaluate the efficacy and safety of lenabasum for the treatment of DM. We expect more updates on this study in the fourth-quarter conference call. The company recently presented safety and efficacy data from the 12-month open-label extension (OLE) of the phase II study on lenabasum for the treatment of DM at American College of Rheumatology (ACR), demonstrating a favorable safety profile and further improvement in efficacy endpoints.

The company is also enrolling and dosing patients in a phase II study of lenabasum for the treatment of SLE.

In September 2018, the company entered into a license agreement with private company Jenrin Discovery to acquire exclusive global rights to candidates from more than 600 compounds, targeting the endocannabinoid system. The key pre-clinical candidate acquired from this deal is CRB-4001, which is expected to enter clinical stage of development in 2019 for nonalcoholic steatohepatitis, or NASH. 

Investors’ focus will be on pipeline updates in the fourth quarter.

What Does the Zacks Model Unveil?

Our proven model does not conclusively show a potential earnings beat for Corbus in the to-be-reported quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) to be able to beat estimates. But that is not the case here, as you will see below.

Earnings ESP: Corbus has an Earnings ESP of 0.00% as both the Most Accurate Estimate and the Zacks Consensus Estimate stand at a loss of 24 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Corbus currently has a Zacks Rank #1, which increases the predictive power of ESP. However, we need to have a positive Earnings ESP to be confident of an earnings beat.

Note that Sell-rated stocks (Zacks Rank #4 or 5) going into an earnings announcement are best avoided.