Quickster: Update on Corbus

by DrKSSMDPhD | April 2, 2017 4:00 pm

[Ed. Note: Dr. KSS writes about medicine and biotech stocks for the Irregulars. He chooses his own topics, and his words and opinions are his own. He has agreed to our trading restrictions. To see all of his column and his latest comments, go to his Stock Gumshoe page[1].]

[Author’s note: This commentary has been expanded from the version that appeared recently in the biotech discussion threads.]

Folks, let me make some comprehensive and tidying-up remarks about the situation at Corbus ($CRBP). Each event such as the one that just happens requires a burst of fresh due diligence, which I have done both on my own and in intense conversation with several people up-close to the situation that I trust. You’ve always got to take that bundle of al dente spaghetti that is your long thesis, heave against the wall, and make sure it still sticks there.

The hoo-ha mostly surrounds the fact that the endpoint on which Corbus boasts supremacy is an endpoint that wasn’t even in the original protocol. This, of course, is post-hoc analysis, where one must tread lightly. THE ONLY GENUINE CONCLUSION that can derive from this kind of analysis is that a new study, a more attuned one, is warranted. And that’s hardly a bad thing here.

I’ve been in the situation that Corbus is in—-newish company, still finding its way—and have been faced with drafting clinical trial protocols where you hope those turn out to be operas omnia, things covering ALL the bases, and yet most protocols do fall short. Possibly Corbus needs better advising as regards cystic fibrosis (CF). We cannot, however, let the perfect be the enemy of the good and shoot a company down for not having quite flown the plane into the stratosphere. And it’s with this in mind that in my view post hoc analyses should not be verboten and that in fact they energize, even galvanize, clinical research. Corbus has done nothing wrong, and they’ve done enough right things to date that I’d be the last to skeet-shoot at them now.

I’ll digress for a moment (you know I always do). I’ve said it til you’re sick of hearing it: Aurinia’s Neil Solomons, MD, is the best clinical protocol writer in a generation, and has crafted MC Escher-like protocols with deep-rooted signals, indexes, tripwires, flash points and so forth so that massive amounts of information can be extracted from a study. He’s why (in my view, though I DON’T give advice, heh heh) Aurinia ($AUPH) is the investment of a lifetime. This man is the Aleister Crowley of clinical investigation and plays—FOR YOU—to win, wielded all kinds of legitimate clever clinical black magic. Nephrologists and rheumatologists are swooning, people,—-they are, I know my sources—over voclosporin. A critic will say that KSS is all hot and bothered over a company so unstable it that it’s had three CEO’s in two and a half years, but that is OK. Zaruby was a great man, but a little too cool-breeze for the board, though hard feelings aren’t there. The second guy is too rotten to name. Glickman has the intense loyalty of Solomons and lieutenant Mike Martin. And this, by the by, is why the company won’t be acquired until things mature and it fetches a fetching good price: buy it now and you risk disrupting that team, who like each other. Solomons is just delightfully quirky enough and dogmatic to say, Buy us? Screw you, I answer only to Glickman, and walk away. A smart buyer knows this.

I don’t think you would argue with me that in all walks of life, different levels of quality emerge. I just had wood floors refinished in my house and I went with the most expensive contractor….not because money is burning a hole in my pocket, but because that guy raised so many trenchant issues about how to complete the work, things the other idiot auditioning contractors never mentioned, that I knew I’d found The Guy. His heart was in it. Now, Corbus needs to find The Guy (or The Gal) to pen its next CF study.

What does Corbus’s lead agent do? Good question. That’s still being defined. In a literal sense it stimulates the CB2 cannabinoid receptor. In a broader sense, it acts as a global dispersing agent for inflammatory cells by pathways we are still learning about. A cynic would say, well steroids do the same thing don’t they? Why not ‘roid up the patient? Resunab is more discrete, more selective, incurs none of the collateral nastinesses that ‘roids do.

Let’s look at this a little more deeply. We speak often of inflammation and of anti-inflammatory drugs (and of our need for better ones). It’s a familiar pet peeve refrain for me: what IS inflammation? We doctors all have a way of knowing what each other means when use that term, but we are at a loss to articulate its clear molecular meaning. Inflammation subsumes several biological processes, including but not limited to

(a) lipid peroxidation

(b) liberation of free fatty acids and the incomplete beta-oxidation of them. Free fatty acids are “hot” and stir things up. The elemental model of NASH put forth by my colleague and good friend Steven Caldwell, MD, chief of hepatology at University of Virginia, is that insulin resistance persuades the liver it’s not getting enough carbohydrate, and so it tries to burn fat in globules deposited within it. But despite the liver’s virtuosity, fat is not a preferred fuel…imagine the plumes of smoke that would emerge if I put lighter fluid in the tank of my aging German roadster. The liver tries to oxidize the free fatty acids released from triglyceride (fat), and but does so poorly, gunking up its own works. The core molecular lesion in NASH appears to be incompletely beta-oxidized fatty acids irking hepatocyte mitochondria.

(c) liberation of proteinases (proteolytic enzymes) from neutrophils

(d) collateral activation of coagulation

(e) activation of complement, the Great Back-up of the immune system, its understudy.

(f) stimulation of Toll-like receptors

(g) infiltration of tissues with neutrophils

(h) the secondary summoning into tissues of lymphocytes and macrophages

An important process in CF flares is lung infiltration to an exuberant degree with neutrophils, which Resunab dials back in a dose-dependent way. Let’s introduce here the vague shadowy idea of appropriate and inappropriate inflammatory responses. The CF neutrophil response, being exuberant, is inappropriate. It gets in the way. Equally inappropriate is the crazy liberation of inflammatory mediators in peanut anaphylaxis. Or the military-like occupation of kidney tissue by lymphocytes in lupus nephritis. (Comes a question from the back of the room: “Dr. KSS, are you saying Resunab might be useful in LN?” Good question…but it probably would not induce durable remission as voclosporin does and so doesn’t threaten $AUPH.)

Let’s think of other anti-inflammatory agents. Steroids are the sledgehammer agent, globally inhibitory of immune responses, but also prone to drive up blood glucose, provoke gastric ulceration in some cases, raise blood pressure and cause fairly profound adverse psychiatric reactions (in certain cases). At the opposite extreme would be ibuprofen and the NSAIDs: unlike acetaminophen, they ARE actually anti-inflammatory, but they mainly work to suppress prostaglandin mediators of inflammation; in so doing, they abate fever and kill pain. Unlike Resunab, however, they are nephrotoxic and cause antral gastric ulcers. They are far too weak to be of interest in CF. In between might be the calcineurin inhibitors (cyclosporine, tacrolimus, voclosporin). These inhibit IL-2 mediated expansion of lymphocyte activity, but have broader immune suppressive capabilities too. They are more targeted and less bombastic than steroids, but would likely worsen the clinical course in CF. They are useful in autoimmune diseases, which CF isn’t. In this framework of thinking, Resunab is the Goldilocks immunosuppressant, almost as if the drug throttles back inappropriate inflammation but not appropriate inflammation. No evidence suggests that Resunab recipients, for example, would be more prone to infections or cancer.

In the case of CF, bacteria rally and mob in the airways, mostly Gram-negative ones. In come the neutrophils, pawns on the immune system’s chessboard, as first line of defence…..ants to a picnic. Only they’re not terribly effective against Gram negatives and serve as a maladaptive response to CF’s pathophysiology. They gunk up the tissue, impair gas exchange, provoke a crisis (“I can’t breathe” Translation: I am struggling to oxygenate). Disperse them and you do NOT undermine the body’s ability to fight. In tissue models, therapeutic doses of Resunab cause about three-fourths of neutrophils to wander away.

Now, here’s where Corbus erred. They went after FEV1 measurements. That’s how much air, what volume of air, one can whoosh at full force in a defined time. FEV1 depends a lot on airway patency, the airways being free of constrictive forces, and on the patient having plenty of muscle tone too. Maybe you can, but I can’t see a reason why Resunab should affect FEV1. It works in the tissues, not the airways….those are gunked up with mucus, biofilm, and even DNA (very viscous) from dying cells (this is why aerosol DNase helps CF). I say we forgive Corbus for having its eye on the wrong ball…..I think they didn’t know and got faulty pre-phase 2 guidance from the Califf by-the-book Torquemada incarnation of the FDA.

If you read the clinical protocol, it is sketchy, exploratory. We don’t know what we’re looking for but we’ll know it when we see it (no, we aren’t talking about pornography). Let’s measure this, measure that…..measure everything and look for a signal. They found one—-fewer hospitalizations—in secondarily selected sets. This is meaningful because one more trip to the hospital is the most quality-of-life detracting thing in a CF pt’s life. Pity they didn’t think of this up front. Now we know….now we have draft guidance for a phase 2b. Keep in mind, this study was PAN-exploratory….they were swapping up everything, including doses and regimens, making it a crazy-quilt exercise. Let’s ping CF patients with Resunab and see what happens with them.

I have a suggestion: Corbus, next time look at DLCO, a quantitative parameter that tells us how much gas exchange (lung parenchyma is where oxygen in the gaseous state traverses a barrier to attain presence in liquid (blood)) the tissue is capable of. I suspect DLCO rises with high-dose Resunab because thinning the neutrophil herd offers less opposition to gas traversing anatomic barriers.  Now get back on your horse.

I’m not prepared to kick to the curb a good company because it bungled something. And I think it’s far healthier to look for what a good company did right than to do like a certain self-seeking columnist who is prepared to wield tongue-pincers, thumbscrews and hot-glowing anal probes against a company for the slightest mishap.

We’ve not even discussed the anti-fibrotic effects of Resunab. In general organs suffer a one-two punch: chronic inflammation summons fibroblasts into tissue, which become resident and migrate about. When a snail crawls, it leaves a trail of slime. When a fibroblast migrates, it leaves a trail of collagen. Resunab appears to tame both prongs of this process. Possibly its anti-fibrotic effect owes purely to its anti-inflammatory effect, and possibly the drug has further specific and selective actions against fibrosis. More data are needed. What’s clear, however, is that if an organ is to remain fibrotic, the fibrosis process requires active maintenance. Shut down the fibroblasts, drive them away, and the fibrotic strands get scissored up with time. I’ve written it many times at Stock Gumshoe: cirrhosis, even decompensated cirrhosis, can be fully reversible (up until a very late stage) if you treat the cause of inflammation. Resunab as an adjunct to antiviral agents for HCV when cirrhosis has established itself? Maybe. The fibrosis will go away with time but if the patient is ailing from it, Resunab may hasten the resolution.

Incisive question: will the proliferating small developers of pharmaceutical cannabidiol and other cannabis derivatives come along and steal the thunder of $CRBP? My answer based on really trying to keep abreast of this field is that none, of the many I know of, are serious contenders. None are as well funded, as clinically sophisticated, or have the pre-clinical scientific foundations to back up their work. Cannabidiol may, in the hands of Kalytera ($KALY), become useful for graft-versus-host (GVH) disease post stem cell transplant, but this company has far to go. Resunab warrants a trial in GVH.

I’ll toss out a garish analogy, one taken from the Outrage franchise of Japanese yakuza films, ones where the violence is highly cinematic and tinged with self-aware irony. Watch this scene[2]. Increasingly, I have optimism that Resunab will, just like those baseballs, KEEP hitting targets across multiple inflammatory diseases. This is not blunderbuss Pollyanna optimism: the data is there in the basic science literature using many disease models. Its Goldilocks effect on inflammatory modulation suits it to be so in a way like no drug medicine has ever seen. Resunab is shaping up to be a cannonball[3], a supernova[4].

I’m staying in Corbus. Game on. Personal PT $18 in 12 months. And probably triple that at three years. This agent DOES have a biologic effect that promises much and it demands further characterization. I say let them have at it and shut up about everything else. Readers here know I can be triumphally abusive of companies where I sniff even early rottenness (I’m that way not because I’m curmudgeonly but because I’m looking out for you), but Corbus smells the like the dogwood blossoms blooming like madness now in my region.

Disclosures: I have long positions in $CRBP and $AUPH shares, but will not trade in those shares for 72 hours, reckoned in business days, after this column appears. I have never received anything of pecuniary value from any person or company ever discussed by me at Stock Gumshoe. Good luck with biotech investing, and realize that while we are happy to assist you (if you have questions, ask) in arriving at informed decisions, nothing that appears in this forum supplants the vital importance of you doing your own research and being accountable for your investing choices. Diligence is due. For updates, please be sure also to follow me on Twitter @KSSMDPhD.

**Please note: This article has been closed for discussion. Please continue the conversation on Dr. KSS’s latest article, which can always be found at the top of his Stock Gumshoe page[5].**

  1. Stock Gumshoe page: http://www.stockgumshoe.com/author/dr-kss-md-phd/
  2. this scene: https://www.youtube.com/watch?v=HlPoqpI6wUA
  3. cannonball: https://www.youtube.com/watch?v=Qpoqzt2EHaA
  4. supernova: https://www.youtube.com/watch?v=tM60GAPIXTY
  5. Stock Gumshoe page: https://www.stockgumshoe.com/author/dr-kss-md-phd/

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