Good morning and welcome to the Corbus Pharmaceuticals Fourth Quarter and Year End December 31st, 2019 Earnings Conference Call. At this time, all participants are in a listen-only mode. The question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded.It is now my pleasure to introduce your host, Ted Jenkins, Senior Director of Investor Relations and Corporate Communications. Please go ahead, sir.

Thank you. Good morning, everyone. At this time, I’d like to remind our listeners that remarks made during this call may state management’s intentions, hopes, beliefs, expectations or projections for the future. These are forward-looking statements and involve risks and uncertainties.Forward-looking statements on this call are made pursuant to the Safe Harbor provisions of the federal securities laws. The forward-looking statements are based on Corbus’ current expectations, and actual results could differ materially. As a result, you should not place undue reliance on any forward-looking statements.Some of the factors that could cause actual results to differ materially from those contemplated by such forward-looking statements are discussed in the periodic reports Corbus files with the Securities and Exchange Commission. These documents are available in the investor section of the company’s website, and on the Securities and Exchange Commission’s website. We encourage you to review these documents carefully.Joining me on the call today are Dr. Yuval Cohen, our Chief Executive Officer; Dr. Barbara White, our Chief Medical Officer and Head of Research; Sean Moran, our Chief Financial Officer; and Craig Millian, our Chief Commercial Officer.With that, it is my pleasure to turn the call over to Yuval.

Thank you, Ted. Good morning, everyone and thank you for joining us on this call this morning. Overall, 2019 was marked by multiple clinical and corporate achievements. An important progress towards realizing our vision to become the leader in drug development targeting the endocannabinoid system.We presented new data, including oral presentations at the American College of Rheumatology 2019 Annual Meeting, where we introduced the two-year Phase 2 open label extension data that showed continued favorable safety and durable outcomes in our study of lenabasum for systemic sclerosis, and our study for dermatomyositis. In addition, we completed enrollment in both RESOLVE 1, our Phase 3 systemic sclerosis study and in our Phase 2b cystic fibrosis study positioning us well for top line data this coming summer.I’d like to remind you all of our vision as a company. We believe that targeting the body’s endocannabinoid system, also known as the ECS, holds the potential to provide new therapies to treat inflammatory, fibrotic and metabolic diseases. We are focused on developing potential novel medicines that modulate this powerful biological system. We have deep expertise in medicinal chemistry, endocannabinoid system biology, regulatory and patent strategy, as well as a proven track record of executing on our clinical development plan.This past year, we’ve also been focusing on laying the important groundwork for having the commercial expertise necessary to execute a successful product launch. As we look ahead to this year, we are on track for the lenabasum top line data from our Phase 3 stage study of systemic sclerosis this summer, to be followed by our Phase 2b study in cystic fibrosis. We also expect top line data from our 100 patient Phase 2 study of lenabasum in Systemic Lupus Erythematosus in the latter part of this year. That study is funded and run by the National Institutes of Health. Finally, we expect to launch our Phase 1 study of CRB-4001 this year and look forward to the key safety data that study will generate.Before Dr. White provides comments on our clinical programs, I do want to say a few words on the coronavirus or COVID-19 situation and how we’re dealing with this rapidly evolving situation. At present, we are not experiencing significant impact or delays from the coronavirus on our business or operations. Like many of our peers, we have put in place a robust risk mitigation plan to ensure the safety of our workforce and to deal with possible effects short clinical trials, supply chain and research studies. We are monitoring the situation carefully and are following guidance from local and federal health authorities.With that, I’d like to turn the call over to our Chief Medical Officer and Head of Research, Dr. Barbara White, to provide you with a quick update on our clinical and research programs.

Thank you, Yuval. Lenabasum is an oral, small molecule CB2 agonist that has been shown to reduce inflammation and fibrosis in a variety of preclinical and human models, promising safety, efficacy and biomarker data have been demonstrated in our initial Phase 2 studies in systemic sclerosis, cystic fibrosis and dermatomyositis patients.At the American College of Rheumatology or ACR Annual Meeting in November 2019, we presented Phase 2 OLE data that showed chronic dosing with lenabasum continued to have an acceptable safety and efficacy profile after 25 months of treatment. The median ACR combined response index in diffuse cutaneous systemic sclerosis or ACR CRISS score remained at or above 0.95 out of the maximum score of 1. Improvement from baseline in the Modified Rodnan Skin Score reached about minus 9 points at the time the data were presented.Our 12-month global Phase 3 RESOLVE 1 study of lenabasum for the treatment of systemic sclerosis is fully enrolled with 365 subjects dosed. Top line data are on schedule and expected this summer. You will be pleased to learn that 98% of the eligible subjects who completed the double-blind, randomized, placebo controlled part of the RESOLVE 1 study to-date have enrolled in the Phase 3 open label extension.We remain optimistic that the upcoming Phase 3 top line data will show favorable safety and positive treatment benefits for lenabasum in this rare, life-threatening disease. This optimism is based on consistency between the biologic activities of lenabasum and the underlying disease mechanisms in systemic sclerosis.Our encouraging Phase 2 safety, efficacy and biomarker data, the similarities in baseline disease characteristics between Phase 2 and Phase 3 subjects and use of the same primary [technical difficulty] endpoint, the ACR CRISS score in the Phase 2 and 3 studies. If the RESOLVE 1 efficacy data are positive and the…

Thank you, Barbara. In 2019, we began to prepare for the potential approval of lenabasum and subsequently its commercial launch. We are making very good progress with our initiatives, including the initiation of our disease educational campaign in systemic sclerosis last week.I would now like to turn the call over to our Chief Commercial Officer, Craig Millian, who’ll provide you an update on our commercial activities.

Thank you, Yuval and good morning, everyone. On our last call, I highlighted that at this point in prelaunch planning, we’re focused on three critical elements to ensure success. First, building our commercial leadership team and capabilities. Second, establishing a strong foundation of deep market insights and third, communicating a compelling narrative that provides an appropriate scientific context ahead of a potential regulatory approval.Starting with building at our team, we have established a talented group of capable leaders to drive a successful launch, including leads for marketing, market access, medical affairs, commercial analytics and operations, supply chain, public relations and patient advocacy.We continue to develop a strong foundation of market insights in both systemic sclerosis and cystic fibrosis and have conducted market research with patients, physicians and payers in both the US and in Europe. Many of these insights have been incorporated into our most recent investor deck available on the Corbus website.Now I’d like to take a moment to highlight some of our key learnings specific to systemic sclerosis. The greatest unmet need is in patients with early or active diffuse systemic sclerosis. These patients once diagnosed often have considerable challenges managing their disease and the impact of scleroderma on their lives is profound.From a go-to market perspective, there are roughly 50 scleroderma centers of excellence, and we estimate that fewer than 2,000 rheumatologists at these centers and also in the community treat the majority of scleroderma patients. Upon FDA approval, we believe we can efficiently reach potential prescribers with a small customer-facing team augmented by targeted multichannel outreach.Rheumatologists who manage scleroderma patients do the best they can with available treatments, but they have no single approved treatment to address the totality of disease. Currently used therapies address symptoms or specific organ complications, but not the underlying disease progression,…

Thank you, Craig. I’d like to provide a brief update on our financial position. Corbus has strengthened its balance sheet. In February last month, we raised $46 million in gross proceeds from a public offering, bringing the total capital raised over the past 12 months to $86 million.We expect the cash on hand of $31 million as of December 31st, 2019, together with the $43 million in net proceeds from the public offering we just did, and the remaining $7.5 million in milestone payments from the Cystic Fibrosis Foundation Award to fund operations into the fourth quarter of 2020.In closing, I want to highlight again, that our vision of focusing on novel compound that target the endocannabinoid system has the potential to yield transformative medicines that could improve the treatment of inflammatory and fibrotic diseases. This year, with our key multiple data readouts will be our most important year-to-date. We look forward to what it brings.With that, I’d like to thank you all for your time and attention, and turn it over to the operator for any questions from our listeners today.

Thank you. At this time, we’ll now be conducting a question-and-answer session. [Operator Instructions] Thank you. Our first question is from the line of Brian Abrahams with RBC Capital Markets. Please proceed with your questions.

Hi, there. Thanks so much for taking my questions. I guess first off on the Phase 3 systemic sclerosis trial. How are you guys feeling about the overall conduct as we get closer to the potential readout? It sounds like a lot of patients are rolling into the open label extension. What’s the retention look like there? Is it as high as in the Phase 2? And what’s your senses to the key CRISS subcomponents that might also be important from both the clinical and regulatory perspectives? And then I had a follow-up.

Thanks, Brian. I’ll try to remember all of those. First, how’s the trial going? Great. We’re near the end. Most of the subjects are reaching, you know, this month 11 out of 12, two thirds of the subjects are out of this study now, so we’re really closing in on the finish of the study. So far, we’ve been pleased with the conduct. And we’ve been especially pleased with the enthusiasm of the patients and the subjects.And as part of that, I think you can see that if we have, you know, 98%, 99% of the eligible people rolling over into the open label, we could not be more delighted. And in terms of retention in the open label, I think we’ve – you know, we got over 200 in it now. And we’ve had, I think, maybe 1% dropout and some of them have been in for a year or so.So again, the retention rate to-date is really quite good, the enrollment rate is great – retention rate is great. And this is important, because it’s going to give us additional safety data, it’s important to provide long-term safety data. To-date it’s been quite acceptable in the other OLEs and we’re going to have even more patients in this one. And we think that will help support the study approvability based on a single trial to help that much additional information, not only the safety but also on outcomes.We think that the regulators across the globe will look at all of the components of the ACR CRISS. The ACR CRISS gives us a tool to address the totality of the disease. Just what Craig pointed out was so important. It is a measure of is the patients’ overall better or not, and it is a regulatory outcome.In terms of what’s important to the patients. We think each of the individual components are and we think the regulators will be interested in all of them, the improvement in mRSS or skin thickening, change in lung function, change in patients global, change in patient function as well as what the physician thinks, do they think that patient has improved or not? So we expect them to pay attention to all and we will certainly do a variety of analysis to support that.

Thanks so much, Barbara. And then maybe a question for Craig, you talked about some of the interesting findings from the initial market research that you’ve done in systemic sclerosis. And I guess, obviously, it’s, you know, before the data and a label, it’s premature to talk about pricing specifically, but you did mention that some of the payers in your access work were expressing receptivity for the potential value of lenabasum and viewing it as consistent with certain other treatments for rare diseases. I was wondering if you just maybe a little bit more specific and help us understand sort of the types of treatments that payers are viewing, the value as being consistent with just to provide some framework for how they’re thinking about value? And I’ll jump back in queue. Thanks.

Yeah. So thanks for the question, Brian. You know, we are obviously very much engaged with a pricing strategy and it is early. So, you know, I appreciate that, you know, I’m not going to get into specific numbers, but I’d be happy to share some general thoughts in terms of the research that we’d conducted.You know, first we’re focusing on optimizing our value proposition in systemic sclerosis and the emphasis is on patients with diffuse disease, which as you’re aware, is the most serious form of scleroderma as well as the population in which our drugs been studied. So the prevalence of diffuse disease is about 9 diffuse systemic sclerosis patients per 100,000 in the US and that patient population clearly falls within the rare disease category, and obviously not the ultra-rare, but I – kind of this new concept of the medium rare disease category. And this is a term that I’ve heard used.Our market research was conducted independently by ClearView Consulting. And that the payers agreed that systemic sclerosis is a serious rare disease with limited treatment options, they’re aware that there were no specific treatments indicated for systemic sclerosis overall. And, you know, I’ll leave you with this thought, based on the reaction to the blinded lenabasum product profile, payers suggested that there would be quite a bit of flexibility when considering levels of access throughout a broad pricing range.And again, I’d say their thought as it would be consistent with treatment analogues from other serious diseases with prevalence rates similar to SSC. And again, diffuse is 9 per 100,000 and overall SSC is about 30 per 100,000.So, you know, at this point, and of course, as you’re aware, it’s not cut and dry in terms of access levels. So depending on pricing strategy, you know, different levels of access and reimbursement are achieved. So a lot of that depends on, you know, the goals we set. But certainly we plan to leverage these insights in the payer research.We’re just beginning our work in terms of health economic modeling, as you mentioned, until we have our data and a final label, you know, we really can’t determine our final value proposition, but we’ll certainly combine those insights with our health economic modeling and further down the road we’ll determine an optimal pricing value strategy.

Great, thank you so much.

The next question is coming from the line of Maury Raycroft with Jefferies. Please proceed with your questions.

Hi, good morning, everyone and thanks for taking my questions. To start for systemic sclerosis, or any of your other late-stage trials, are you taking regular blood samples from patients and assessing those for inflammatory or possibly fibrosis biomarkers in the blood on a blinded basis? And can you comment on what you’re seeing qualitatively on the samples?

So, first of all, we are taking samples that we’re actually taking them from involved tissue. So we think that that’s probably a little more relevant. We found in the Phase 2 study was quite informative, that in fact, many of the biomarkers are not as elevated, because our patients are in background immunosuppressives, you know, about 80% of them or so on at least some background immunosuppressives and in that group of subjects, it’s less common to find these markers elevated in the blood. That’s why we’re looking at involved tissues.So we will look at histology and gene expression in the skin of patients with systemic sclerosis and dermatomyositis. And we are certainly looking at cells and markers of inflammation in the sputum of patients with CF. As you may recall, Maury, we certainly saw very encouraging data in the Phase 2 study in the same samples with a reduction of inflammation and fibrosis in the scleroderma skin, reduction of cells and inflammatory mediators in the DM skin and a reduction in cells and inflammatory mediators in the CF skin.

Got it. And are you taking those on a serial basis over time? I guess, are there different time points that you’re getting the samples?

You know, Maury, because of their biopsies, we’re doing them at the baseline in the 12 months, we’re not doing the more often than that except in the DM study, I think some patients may volunteer for three, but mostly it’s just beginning and the end of the study. The CF you know, are easier to come by so they’re being done a little more frequently.

Got it, okay. And then 4001, just clarifying, will you include some obese individuals in your initial SAD/MAD safety and PK study? And okay –

Go ahead, sorry.

And then, or you just do one PET scan or multiple PET scans on those individuals and have you established a threshold for how much receptor occupancy would be acceptable at different time points to move to the next step to test the drug in a larger study?

So great questions. First, question about testing, safety, tolerability, pharmacokinetics and obese individuals. That is part of the Phase 1 study. There’s a potential that those parameters might be different than they would be in a normal or overweight individual. So we will test that, because if we’re targeting NASH, we’re going to be dealing with a lot of obese people. So that’s a straightforward early safety and PK understanding that we need.We will move from there. After we’ve got those studies done, we’ll move into doing the PET scan at the NIH. We’ve been working quite closely with Dr. George Kunos and his colleagues there. The way the study is done, as the patients will get some multiple doses of 4001 first, and they’ll be loaded with it and these will be obese individuals.And then we will – they will be injected with a specific CB1 ligand, that is for PET scanning and will light up their brain. So first have a study at baseline before they receive anything, we know that – to see how much of the ligand bonds in their brain, they’ll get the drug, and then they’ll have another study and we’ll see if there’s any displacement of the binding of the ligand.So the results will be compared in a cohort that gets placebo for seven days and a cohort that gets 4001 for seven days, and we will look for whether or not 4001 displaces ligand – better than placebo, more than placebo. The data that are available in the literature suggests that we’re less likely to see the CNS adverse events, if the levels of displacement that would be specific binding are probably in the 10% or less range for studies and variability around that.Certainly, we would be less comfortable if we saw specific binding in the, you know, 30%, 40% range or 40% range that would that would certainly be room for caution somewhere in between, I think would be – we would need to interpret and really think about, but a little bit we would move forward, I think and a lot, no, and in between, we’ll think about it.

Got it, very good. And will you announce when you start dosing individuals in that study?

Sure we’ll announce and as I said, we’re on target and we expect it to start in Tuesday. So far so good.

Got it, okay. Thank you very much.

Our next question is from the line of Leland Gershell with Oppenheimer. Please proceed with your questions.

Hi. Good morning, everyone. Just having a two-part question which is – it relates to the variety of mechanisms and drugs that are used as anti-inflammatory and byproducts versus lenabasum and wondering, Barbara to comment on, you know, which of those other therapeutics that are often used for the kinds of conditions that you’re looking at? You know could either work very well that interfering with lenabasum or potentially interfere with its function given that some of these agents can actually go against resolution? And then I have a second part. Thanks.

So I think if I’m – if I may repeat that question. It is, what’s the potential to lenabasum in combination with other therapies? What might be synergistic efficacy or antagonist take effects? And might there be drug-drug interactions that will be a safe signal.So as you know, we are studying patients on their background treatment, whatever it is, that’s always been the approach and we felt comfortable doing that, because expression of CB2 really just on activated immune cells goes away when they’re not, that increases the safety profile. And the fact today we’ve not seen significant clinical evidence of drug-drug interactions or abnormalities in the lab tests, et cetera.Mechanistically, I think it’s possible that we could see even better efficacy in some of the patients who might be on background immunosuppressive such as MMF, we’ll know obviously when the trial is over and the subset analyses are done.But for example, the approach that we have of activating resolution of inflammation is absolutely novel. Nobody else is doing that. This is brand new. This provides a whole new approach to treating these chronic inflammatory and fibrotic diseases. So if you view the disease mechanisms, sort of as a mountain, you know perhaps a climb up the hill and the climb down the hill, lenabasum activates that going down the hill, the turning that things off. Although there certainly are some effects on the activation phases.But a potential, if you pair things, you might even see better efficacy. However, we don’t know that, we’ll find out and I have no belief that it needs to be that way, by itself. And we’ve tested lenabasum by itself and we’re testing in the current studies without concomitant immunosuppressives.We have every expectation that we will see really substantial clinical benefit. So I think that the way that we think it will be used will be either as monotherapy in early patients who have early active disease to bring it under early control, Craig can talk about that more, as well as in combination therapy, depending upon, you know, certain organ involvements and preferences with the patients and physicians.Drug-drug interaction studies, we’ve done some significant modeling of that, consistent with what the FDA likes to see. And while there are some potential drug-drug interactions with some types of compounds, they’re not the compounds that the patients usually use. So we’re not expecting significant issues there. Craig, I didn’t know if you wanted to comment about your views of commercially if you still own or in combination.

Yeah. And obviously as Barbara said, it will come down to the data. Certainly, I think there’s significant opportunity for both, but certainly most patients are on some sort of background immunosuppression and certainly that adding with the opportunity to add lenabasum without adding to the overall you know, based on the safety and tolerability profile we expect that we’ve seen today, you know, not adding significant treatment burden, while adding you know, significant incremental efficacy will be very compelling.Certainly there are also patients who experience problematic side effects on immunosuppressants. Their healthcare provider may want to try to titrate down to some degree, the amount of immunosuppression and obviously the opportunity there even for patients further along in their disease and have more stable disease is certainly that it would be a nice opportunity for lenabasum there as well and certainly the de novo patient who’s first diagnosed we would love to be top of mind in terms of the first drug that they consider for a newly diagnosed patient as well.And certainly as we think about how we construct our go-to market strategy and the insights that, you know, these patients are being diagnosed and treated often by the community rheumatologists that when you think about the profile of lenabasum being oral, again, safety and tolerability to-date looking quite reasonable. And obviously the advocacy, it’s going to – we would consider it to be very attractive potentially as the first line agent. So you know, we think it really covers multiple bases.

Thanks, that’s very helpful. But just a quick follow-up. As we look towards the RESOLVE 1 readout in systemic sclerosis, can you give indication at this point, if we’re going to see in the top line breakdown of the CRISS subcomponents, the secondary endpoints, you will be limited more to just through the top line or is it just too really [indiscernible] the patient, I mean the data? Thanks.

Definitely, you’ll see the primary. We’ll see the CRISS and I think it would be reasonable to expect, most, if not all of the secondary, that is the components of the CRISS, you’ll – because it’s each individually address on how lenabasum could provide benefit to the totality of the illness that we’re treating. So, I would, at this point, I can’t promise but I think it would be our intent to show you what the overall score in the components look like and that covers the secondary.

Great, thanks very much for taking the questions.

Our next question is from the line of Liisa Bayko with JMP Securities. Please proceed with your questions.

Hi, [John] [ph] on for Liisa. Thanks for taking the questions. I guess following up on a previous question, in RESOLVE 1, when you’re looking at these biopsies and biomarkers. Can you discuss how you think the importance of seeing correlation between the biomarker changes and what you’re seeing clinically in patients?

You know, I think there will be – certainly I would expect it to correlate. I’m not sure I would expect to see a fabulously strong correlation, because that’s the difference between, you know, skin and clinical outcomes. And as we had many discussions there – there’s variability in the clinical outcomes and so forth and so on. But I would certainly expect to see some correlation. That’s why we do it. So that we can support that the efficacy outcomes we have are very sensible when you look at impact of this drug on the underlying disease pathogenesis.

Thanks. And I guess just one more for Craig. You discussed targeting about 2,000 rheumatologists, he discussed how you’re tiering those docs and then kind of your thoughts on the size of your sales force? Thanks.

Sure. Yeah, so just you know, take a step back, I mean at launch, our goal is going to be clearly to build awareness and understanding with both the academic and community-based rheumatologists who are treating scleroderma patients and we talked about, you know, the product profile, we think you know are lending itself well, for both that those we treat at the centers of excellence as well as those community rheumatologists who often are diagnosing and getting patients, you know, our goal would be to get patients started on treatment immediately upon diagnosis.So, you know, let me caveat this by saying, we haven’t done a formal sales force sizing exercise yet, but, you know, we would envision a national footprint, ensuring coverage first and foremost of the roughly 50 scleroderma centers of excellence, and we would envision that being duly covered by a commercial customer-facing team as well as a medical – field medical team.We would also – one have the capacity to call on those community-based rheumatologists who are treating a sizable number of scleroderma patients in their practice. And, you know, right now we estimate that number to be between 1,500 and 2,000 rheumatologists. And the cutoff we’re using preliminarily is it, they have roughly 10 scleroderma patients or more in their practice, but again, this is quite preliminary and there’s going to be additional work done to validate that number.So I would expect a fairly modestly sized specialty sales team of no more than 50, but with national reach, and then, as I mentioned, we want to augment that with innovative multichannel marketing approaches and obviously also have a strong field-based medical team.

Great, thanks for taking the questions and congrats on the progress.

Thank you.

Thank you.

Thank you, everyone. This concludes our question-and-answer session in conference for today. Thank you for your participation. You may now disconnect your lines at this time and have a wonderful day.

Thank you, everyone. Take care and stay safe.