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Synthetic cannabinoid firm halves workforce since 77% stock drop

Synthetic cannabinoid firm halves workforce since 77% stock drop
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October 9th, 2020

Conor O’Brien


 

Source: Prohibition Partners, EODdata.com

Corbus Pharmaceuticals CRBP (NASDAQ), based in Massachusetts has been one of the most promising companies in the field of synthetic cannabinoids for a number of years now. Synthetic cannabinoids are artificial versions of cannabis molecules, which may have several advantages over natural cannabinoids as they are easier to obtain in a pure and chemically precise product. It is also easier to isolate cannabinoids which occur at low concentrations in cannabis plants and offers the potential to develop novel cannabinoids with properties that are different from natural molecules.

Corbus has focused on developing therapies which leverage synthetic cannabinoids to treat a range of conditions. The company has been of particular interest for a number of reasons:

  • Firm financial backing from institutional investors such as BlackRock, as well as partnerships with pharmaceutical firms such as Kaken in Japan
  • A focus on novel and synthetic cannabinoids
  • A lead drug Lenabasum which has had success in treating several conditions in early-stage clinical trials

Corbus has been potentially the most well funded synthetic cannabinoid firm in the world, having a peak market capitalisation as high as US$766 million in September 2020, and has had one of the most promising drug candidates in Lenabasum. Lenabasum has been tested for treating a range of auto-immune diseases as well as cystic fibrosis. In the past, Corbus has estimated that approval for all conditions for which the drug reached stage II trials could mean sales of over US$5 billion per year.

However, Corbus has had two major setbacks this year. The more severe of the two came in September when Lenabasum failed in phase III clinical trials to treat symptoms of a condition called diffuse cutaneous systemic sclerosis. The results wiped 77% percent of the share value from the company, entailing a reduction of hundreds of millions from the company’s market cap. Earlier this week, Corbus released more disappointing news, that Lenabasum had failed to show a significant reduction in a key symptom of cystic fibrosis in a phase IIb trial.

On Thursday October 8, Corbus announced that it would reduce its workforce by 54% and refocus its remaining assets to ongoing clinical and preclinical trials. The most advanced of these are the phase III trials of Lenabasum for dermatomyositis. This condition has an incidence rate of around 9.63 cases per million people and causes muscle weakness and skin rashes. A favourable safety profile and positive results in early clinical stages suggest there may still be hope for the drug and consequently, the success of a pioneering cannabinoid company.

The developments underline the inherent financial risk in the development of new pharmaceuticals. However, pharmaceutical cannabinoids are still a relatively new tool in treating diseases and there is still massive potential in cannabis-based medicines to treat a wide range of conditions. The race is now on for companies to get their products developed, patented and approved by groups like the Food and Drugs Administration and the European Medicines Agency. In our upcoming Pharmaceutical Cannabis Report, we have identified over 40 clinical trials being run by the top cannabis companies in the world such as Aurora and Canopy Growth. The prize for the company who gets their pharmaceutical cannabis product to market will be that significant portion of the medicinal cannabis market which will belong to medicines more closely resembling traditional, single molecule pharmaceuticals which have passed through rigorous clinical trials. The success of Epidiolex® in establishing 9-figure annual sales is a strong testament to this.

For an analysis of all of the latest developments in the field of pharmaceutical cannabinoids, including an overview of the most advanced cannabis drugs undergoing clinical trials, and the 25+ groups working to produce commercially scalable synthetic cannabinoids, look out for Prohibition Partners’ upcoming Pharmaceutical Cannabis Report.

For more in-depth information, market data and strategic support, contact the Prohibition Partners consultancy team at info@prohibitionpartners.com or download one of our industry-leading reports.

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