Corbus Pharmaceuticals Holdings, Inc 10-Q for FY2024 Q1
Corbus Pharmaceuticals Holdings, Inc. (CRBP)
About this 10-Q
Corbus Pharmaceuticals Holdings, Inc filed this 10-Q on May 7, 2024, covering the quarter ended March 31, 2024 (FY2024 Q1).
Headline figures
Quarter ended March 31, 2024, as reported in this filing, compared with the same period a year earlier where the filing states it.
- Net loss
- $6.9M
- compared with a net loss of $17.74M a year earlier
- Diluted EPS
- -$0.83
- compared with -$4.24 a year earlier
s
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended
or
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from________ to_________.
Commission File Number:
(Exact name of registrant as specified in its charter)
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(Registrant’s telephone number, including area code)
(Former Name, Former Address and Former Fiscal Year if Changed Since Last Report): N/A
Securities registered pursuant to Section 12(b) of the Act:
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The |
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
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Emerging growth company |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No
As of May 3, 2024,
CORBUS PHARMACEUTICALS HOLDINGS, INC.
Quarterly Report on Form 10-Q for the Quarter Ended March 31, 2024
TABLE OF CONTENTS
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PART I |
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FINANCIAL INFORMATION |
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3 |
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Condensed Consolidated Balance Sheets as of March 31, 2024 and December 31, 2023 |
3 |
4 |
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5 |
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Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2024 and 2023 |
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2. Management’s Discussion and Analysis of Financial Condition and Results of Operations |
20 |
3. Quantitative and Qualitative Disclosures about Market Risk |
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25 |
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PART II |
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OTHER INFORMATION |
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1A. Risk Factors |
26 |
2. Unregistered Sales of Equity Securities and Use of Proceeds |
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6. Exhibits |
27 |
-2-
PART I — FINANCIAL INFORMATION
Item 1. Financial Statements.
Corbus Pharmaceuticals Holdings, Inc.
Condensed Consolidated Balance Sheets (Unaudited)
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March 31, 2024 |
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December 31, 2023 |
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ASSETS |
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Current assets: |
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Cash and cash equivalents |
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$ |
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$ |
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Investments |
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Restricted cash |
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Prepaid expenses and other current assets |
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Total current assets |
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Restricted cash |
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Property and equipment, net |
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Operating lease right-of-use assets |
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Other assets |
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Total assets |
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$ |
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$ |
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LIABILITIES AND STOCKHOLDERS’ EQUITY |
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Current liabilities: |
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Notes payable |
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$ |
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$ |
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Accounts payable |
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Accrued expenses |
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Derivative liability |
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Operating lease liabilities, current |
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Current portion of long-term debt |
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Total current liabilities |
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Other long-term liabilities |
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Operating lease liabilities, noncurrent |
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Total liabilities |
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Stockholders’ equity |
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Preferred stock, $ |
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Common stock, $ |
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Additional paid-in capital |
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Accumulated deficit |
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Accumulated other comprehensive loss |
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Total stockholders’ equity (deficit) |
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Total liabilities and stockholders’ equity |
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$ |
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$ |
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See notes to the unaudited condensed consolidated financial statements.
-3-
Corbus Pharmaceuticals Holdings, Inc.
Condensed Consolidated Statements of Operations and Comprehensive Loss
(Unaudited)
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For the Three Months |
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2024 |
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2023 |
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Operating expenses: |
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Research and development |
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$ |
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$ |
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General and administrative |
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Total operating expenses |
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Operating loss |
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Other income (expense), net: |
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Other income, net |
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Interest expense, net |
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Change in fair value of derivative liability |
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Foreign currency transaction (loss) gain, net |
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Other income (expense), net |
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( |
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Net loss |
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$ |
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$ |
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Net loss per share, basic and diluted |
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$ |
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$ |
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Weighted average number of common shares outstanding, basic and diluted |
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Comprehensive loss: |
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Net loss |
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$ |
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$ |
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Other comprehensive (loss) income : |
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Change in unrealized (loss) gain on marketable debt securities |
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Total other comprehensive (loss) income |
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Total comprehensive loss |
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$ |
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$ |
( |
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See notes to the unaudited condensed consolidated financial statements.
-4-
Corbus Pharmaceuticals Holdings, Inc.
Condensed Consolidated Statements of Stockholders’ Equity
(Unaudited)
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For the Three Months Ended March 31, 2024 |
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Common Stock |
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Additional |
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Accumulated |
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Accumulated |
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Total |
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Shares |
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Amount |
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Capital |
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Deficit |
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Loss |
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Equity |
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Balance at December 31, 2023 |
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$ |
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$ |
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$ |
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$ |
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$ |
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Issuance of common stock, net of issuance costs of $ |
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— |
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— |
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Issuance of common stock upon conversion of K2 Loan and Security Agreement |
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— |
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— |
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Issuance of common stock upon exercise of stock options |
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— |
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— |
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Issuance of common stock upon vesting of restricted stock |
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— |
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— |
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— |
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— |
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— |
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Stock-based compensation expense |
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— |
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— |
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— |
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— |
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Change in unrealized gain (loss) on marketable debt securities |
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— |
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— |
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— |
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— |
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( |
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Net loss |
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— |
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— |
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— |
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( |
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— |
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Balance at March 31, 2024 |
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$ |
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$ |
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$ |
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$ |
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$ |
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For the Three Months Ended March 31, 2023 |
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Common Stock |
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Additional |
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Accumulated |
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Accumulated |
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Total |
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Shares |
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Amount |
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Capital |
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Deficit |
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Loss |
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Equity |
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Balance at December 31, 2022 |
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$ |
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$ |
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$ |
( |
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$ |
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$ |
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Stock-based compensation expense |
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— |
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— |
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— |
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— |
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Issuance of common stock upon exercise of stock options |
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— |
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— |
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Change in unrealized gain (loss) on marketable debt securities |
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— |
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— |
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— |
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— |
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Net loss |
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— |
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— |
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— |
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( |
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— |
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( |
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Balance at March 31, 2023 |
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$ |
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$ |
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$ |
( |
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$ |
( |
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$ |
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See notes to the unaudited condensed consolidated financial statements.
-5-
Corbus Pharmaceuticals Holdings, Inc.
Condensed Consolidated Statements of Cash Flows
(Unaudited)
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Three Months Ended |
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2024 |
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2023 |
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Cash flows from operating activities: |
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Net loss |
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$ |
( |
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$ |
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Adjustments to reconcile net loss to net cash used in operating activities: |
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Stock-based compensation expense |
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Depreciation expense |
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Net amortization on discount of investments |
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Loss (gain) on foreign currency transaction |
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Amortization of debt discount |
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Change in fair value of derivative liability |
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Realized loss on investments |
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Changes in operating assets and liabilities: |
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Decrease (increase) in prepaid expenses and other current assets |
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Decrease (increase) in other assets |
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Decrease in operating lease right-of-use asset |
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(Decrease) increase in other long-term liabilities |
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Decrease in accounts payable |
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( |
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( |
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(Decrease) increase in accrued expenses |
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( |
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Decrease in operating lease liabilities |
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( |
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( |
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Net cash used in operating activities |
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( |
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( |
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Cash flows from investing activities: |
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Purchases of investments |
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( |
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Proceeds from sales and maturities of investments |
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Net cash (used in) provided by investing activities |
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Cash flows from financing activities: |
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Proceeds from issuance of common stock |
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Repayment of notes payable |
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( |
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Repayment of long-term borrowings |
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( |
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Issuance costs paid for common stock financings |
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( |
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Net cash provided by (used in) financing activities |
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( |
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Net increase (decrease) in cash, cash equivalents, and restricted cash |
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( |
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Cash, cash equivalents, and restricted cash at beginning of the period |
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Cash, cash equivalents, and restricted cash at end of the period |
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$ |
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$ |
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Supplemental disclosure of cash flow information and non-cash transactions: |
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Cash paid during the period for interest |
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$ |
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$ |
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Proceeds from issuance of common stock not yet received |
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$ |
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$ |
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Common stock issuance costs not yet paid |
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$ |
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$ |
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Issuance of common stock for conversion of convertible debt |
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$ |
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$ |
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See notes to the unaudited condensed consolidated financial statements.
-6-
Corbus Pharmaceuticals Holdings, Inc.
Notes to Unaudited Condensed Consolidated Financial Statements
March 31, 2024
1. NATURE OF OPERATIONS AND BASIS OF PRESENTATION
Business
Corbus Pharmaceuticals Holdings, Inc. (the "Company" or "Corbus") is a precision oncology company with a diversified portfolio and is committed to helping people defeat serious illness by bringing innovative scientific approaches to well-understood biological pathways. Corbus’ pipeline is comprised of two experimental drugs targeting solid tumors: CRB-701, a next-generation antibody drug conjugate ("ADC") that targets the expression of Nectin-4 on cancer cells to release a cytotoxic payload and CRB-601, an anti-integrin monoclonal antibody that blocks the activation of TGFβ expressed on cancer cells. The pipeline also includes CRB-913, a highly peripherally restricted cannabinoid type-1 ("CB1") receptor inverse agonist for the treatment of obesity. Since its inception, the Company has devoted substantially all of its efforts to business planning, research and development, recruiting management and technical staff, acquiring operating assets and raising capital. The Company’s business is subject to significant risks and uncertainties and the Company will be dependent on raising substantial additional capital before it becomes profitable, and it may never achieve profitability.
Basis of Presentation
The accompanying unaudited financial statements have been prepared in accordance with generally accepted accounting principles in the United States (“U.S. GAAP") for interim financial reporting. In the opinion of management of the Company, the accompanying unaudited condensed consolidated interim financial statements reflect all adjustments (which include only normal recurring adjustments) necessary to present fairly, in all material respects, the condensed consolidated financial position of the Company as of March 31, 2024 and the results of its operations and changes in stockholders’ equity for the three months ended March 31, 2024 and 2023 and its cash flows for the three months ended March 31, 2024 and 2023. The December 31, 2023 condensed consolidated balance sheet was derived from audited financial statements. The Company prepared the condensed consolidated financial statements following the requirements of the U.S. Securities and Exchange Commission (the “SEC”) for interim reporting. Accordingly, certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted. It is suggested that these condensed consolidated financial statements be read in conjunction with the financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023, filed on March 12, 2024 (the “2023 Annual Report”). The results of operations for such interim periods are not necessarily indicative of the operating results for the full fiscal year.
Basis of Consolidation
The condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All significant intercompany transactions and accounts have been eliminated in consolidation.
The significant accounting policies used in preparation of these condensed consolidated financial statements in this Form 10-Q are consistent with those discussed in Note 3, “Significant Accounting Policies,” in our 2023 Annual Report.
2
The accompanying condensed consolidated financial statements have been prepared assuming the Company will continue as a going concern, which contemplates continuity of operations, realization of assets and the satisfaction of liabilities and commitments in the normal course of business. The Company has incurred recurring losses since inception and as of March 31, 2024, had an accumulated deficit of approximately $
The source, timing and availability of any future financing will depend principally upon market conditions, and, more specifically, on the progress of the Company’s clinical development programs. Funding may not be available when needed, at all, or on terms acceptable to the Company. Lack of necessary funds may require the Company to, among other things, delay, scale back or eliminate some or all of the Company’s planned clinical or pre-clinical trials.
-7-
On May 31, 2023, the Company entered into Amendment No. 1 to the Open Market Sale Agreement originally dated August 6, 2020 (the “Open Market Sale Agreement”) with Jefferies LLC (“Jefferies”), as sales agent, pursuant to which the Company may issue and sell, from time to time, through Jefferies, shares of its common stock, and pursuant to which Jefferies may sell the common stock by any method permitted by law deemed to be an “at-the-market offering” as defined by Rule 415(a)(4) promulgated under the Securities Act of 1933, as amended. The Company will pay Jefferies a commission of
On January 31, 2024, the Company entered into an underwriting agreement with Jefferies, as representative of the several underwriters, relating to an underwritten public offering of
The Company filed a new shelf registration statement and prospectus supplement effective March 20, 2024 for which the Company is authorized to offer and sell up to $
3
The Company considers only those investments which are highly liquid, readily convertible to cash, and that mature within 90 days from the date of purchase to be cash equivalents. At March 31, 2024 and December 31, 2023, cash equivalents were comprised of money market funds, commercial paper, and other debt securities with maturities less than 90 days from the date of purchase.
Restricted cash as of March 31, 2024 included security for a stand-by letter of credit issued in favor of a landlord for $
Cash, cash equivalents, and restricted cash consist of the following:
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March 31, 2024 |
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December 31, 2023 |
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Cash |
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$ |
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$ |
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Cash equivalents |
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Cash and cash equivalents |
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Restricted cash, current |
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Restricted cash, noncurrent |
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Restricted cash |
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Total cash, cash equivalents, and restricted cash shown in the statement of cash |
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$ |
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$ |
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As of March 31, 2024, the Company’s cash and cash equivalents held in the United States ("U.S.") was approximately $
Our foreign subsidiaries in the United Kingdom and Australia may qualify for refundable research and development tax credits in the form of cash that were earned on certain research and development expenses incurred primarily outside of the U.S. In the period ending March 31, 2024, the Company received refundable research and development credits from foreign tax authorities of approximately $
-8-
4
The following table summarizes the Company’s investments as of March 31, 2024:
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Amortized Cost |
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Gross |
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Gross |
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Fair Value |
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Debt Securities: |
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Commercial paper |
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$ |
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$ |
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$ |
( |
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$ |
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Corporate debt securities |
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( |
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Total |
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$ |
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$ |
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$ |
( |
) |
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$ |
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The following table summarizes the amortized cost and fair value of the Company’s available-for-sale marketable debt securities by contractual maturity as of March 31, 2024:
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Amortized Cost |
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Fair Value |
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Maturing in one year or less |
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$ |
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$ |
|
||
Maturing after one year but less than three years |
|
|
|
|
|
|
||
|
|
$ |
|
|
$ |
|
||
The following table summarizes the Company’s investments as of December 31, 2023:
|
|
Amortized Cost |
|
|
Gross |
|
|
Gross |
|
|
Fair Value |
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Debt Securities: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Corporate debt securities |
|
|
|
|
|
|
|
|
( |
) |
|
|
|
|||
Total |
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|||
The following table summarizes the amortized cost and fair value of the Company’s available-for-sale marketable debt securities by contractual maturity as of December 31, 2023:
|
|
Amortized Cost |
|
|
Fair Value |
|
||
|
|
|
|
|
|
|
||
Maturing in one year or less |
|
$ |
|
|
$ |
|
||
|
|
$ |
|
|
$ |
|
||
-9-
5
The following tables present information about the Company’s financial assets and liabilities measured at fair value on a recurring basis and indicate the level of the fair value hierarchy utilized to determine such fair values as of March 31, 2024:
|
|
Level 1 |
|
|
Level 2 |
|
|
Level 3 |
|
|
Total |
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Assets: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Cash equivalents: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Money market funds |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Corporate debt securities |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Investments: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Commercial paper |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Corporate debt securities |
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Derivative liabilities |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
The following tables present information about the Company’s financial assets and liabilities measured at fair value on a recurring basis and indicate the level of the fair value hierarchy utilized to determine such fair values as of December 31, 2023:
|
|
Level 1 |
|
|
Level 2 |
|
|
Level 3 |
|
|
Total |
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Assets: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Cash Equivalents: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Money market funds |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Corporate debt securities |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Investments: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Corporate debt securities |
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Derivative liabilities |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
6
The Company entered into a license agreement (the “Jenrin License Agreement”) with Jenrin Discovery, LLC ("Jenrin"), a privately-held Delaware limited liability company, effective September 20, 2018. Pursuant to the Jenrin License Agreement, Jenrin granted the Company exclusive worldwide rights to develop and commercialize the Licensed Products (as defined in the Jenrin Agreement) which includes the Jenrin library of over 600 compounds and multiple issued and pending patent filings. The compounds are designed to treat inflammatory and fibrotic diseases by targeting the endocannabinoid system.
In consideration of the license and other rights granted by Jenrin, the Company paid Jenrin a $
-10-
The Company entered into a license agreement (the “Milky Way License Agreement”) with Milky Way BioPharma, LLC (“Milky Way”), a subsidiary of Panorama Research Inc., effective May 25, 2021. Pursuant to the Milky Way License Agreement, the Company received an exclusive license, under certain patent rights and know-how owned or controlled by Milky Way, to develop, commercialize, and otherwise exploit products containing antibodies against integrin αvβ6 and/or integrin αvβ8 (“Licensed Products”), one of which the Company is referring to as CRB-602. Under the terms of the Milky Way License Agreement, the Company will have sole responsibility for research, development, and commercialization of any Licensed Products, and Company has agreed to use commercially reasonable efforts to perform these activities. The Milky Way Agreement may be terminated earlier in specified situations, including termination for material breach or termination by the Company with advance notice. A notice of termination without reason was executed by the Company and sent to Milky Way on January 25, 2024, terminating the Milky Way Agreement effective as of July 23, 2024.
The Company entered into a license agreement (the “UCSF License Agreement”) with the Regents of the University of California (“The Regents”) effective May 26, 2021. Pursuant to the UCSF License Agreement, the Company received an exclusive license to certain patents relating to humanized antibodies against integrin αvβ8, one of which the Company is referring to as CRB-601, along with non-exclusive licenses to certain related know-how and materials. The Company amended the UCSF License Agreement with The Regents effective November 17, 2022 adding additional antibody patents to the agreement.
In consideration for the license and other rights granted to the Company under the UCSF License Agreement, the Company paid The Regents a license issue fee of $
The Company further amended the UCSF License Agreement with The Regents effective August 14, 2023 to incorporate certain new technology rights and amend the payment schedule for the development milestone for the filing of patent rights and the development milestone for the filing of an Investigational New Drug ("IND").
In addition to the license issuance fees, the Company is obligated to pay an annual license maintenance fee, as well as up to $
The Company entered into a license agreement (the “CSPC License Agreement”) with CSPC Megalith Biopharmaceutical Co., Ltd ("CSPC"), a subsidiary of CSPC Pharmaceutical Group Limited, effective February 12, 2023. Pursuant to the CSPC License Agreement, the Company received an exclusive license to develop and commercialize a novel clinical stage antibody drug conjugate targeting Nectin-4, which the Company is referring to as CRB-701, in the U.S., Canada, the European Union (including the European Free Trade Area), the United Kingdom, and Australia.
In consideration for the license granted to the Company under the CSPC License Agreement, the Company will pay CSPC an upfront payment of $
-11-
The Company determined that substantially all of the fair value of the Jenrin License Agreement and CSPC License Agreement was attributable to a single in-process research and development asset which did not constitute a business. The Company determined that substantially all of the fair value of the Milky Way License Agreement and the UCSF License Agreement was attributable to separate groups of in-process research and development assets which did not constitute a business. The Company concluded that it did
7
Property and equipment consisted of the following:
|
|
March 31, |
|
|
December 31, |
|
||
Computer hardware and software |
|
$ |
|
|
$ |
|
||
Office furniture and equipment |
|
|
|
|
|
|
||
Leasehold improvements |
|
|
|
|
|
|
||
Property and equipment, gross |
|
|
|
|
|
|
||
Less: accumulated depreciation |
|
|
( |
) |
|
|
( |
) |
Property and equipment, net |
|
$ |
|
|
$ |
|
||
Depreciation expense was $
The Company notes
8
Operating Lease Commitment
Pursuant to the terms of the Company’s non-cancelable lease agreements in effect at March 31, 2024, the following table summarizes the Company’s maturities of operating lease liabilities as of March 31, 2024:
2024 |
|
$ |
|
|
2025 |
|
|
|
|
2026 |
|
|
|
|
Total lease payments |
|
|
|
|
|
|
|
|
|
Less: imputed interest |
|
|
( |
) |
Total |
|
$ |
|
|
Sublease Commitment
-12-
9
D&O Financing
In November 2023, the Company entered into a loan agreement with a financing company for $
Loan and Security Agreement with K2 HealthVentures LLC
On July 28, 2020, the Company, with its subsidiary, Corbus Pharmaceuticals, Inc., as borrower, entered into a secured Loan and Security Agreement with K2 HealthVentures LLC (“K2HV”), an unrelated third party (the “Loan and Security Agreement”) and received $
In accordance with ASC Topic No. 470-50, “Debt – Modifications and Extinguishments” (Topic No. 470), the amendment noted above was determined to be a modification, thus no gain or loss was recorded.
Pursuant to the Loan and Security Agreement, K2HV may elect to convert up to $
In connection with the Loan and Security Agreement, on July 28, 2020, the Company issued K2HV a warrant to purchase up to
The Company is required to make a final payment in excess of the stated principal equal to $
The total principal amount of the loan under the Amended Loan and Security Agreement outstanding at March 31, 2024, including the $
-13-
Upon the occurrence of an Event of Default (as defined in the Loan and Security Agreement), and during the continuance of an Event of Default, the applicable rate of interest, described above, will be increased by
The total debt discount related to the Amended Loan and Security Agreement of approximately $
The net carrying amounts of the liability components consists of the following:
|
|
March 31, 2024 |
|
|
December 31, 2023 |
|
||
|
|
|
|
|
|
|
||
Principal |
|
$ |
|
|
$ |
|
||
Less: debt discount |
|
|
( |
) |
|
|
( |
) |
Accretion of debt discount |
|
|
|
|
|
|
||
Net carrying amount |
|
$ |
|
|
$ |
|
||
Less: current portion of long-term debt |
|
|
( |
) |
|
|
( |
) |
Total long-term debt, net of discount |
|
$ |
|
|
$ |
|
||
The following table summarizes the future principal payments, including the $
Quarterly Periods Ending |
|
Principal Payments and final payment on Loan Agreement |
|
||||
|
|
|
|
|
|
||
June 30, 2024 |
|
$ |
|
|
|
||
September 30, 2024 |
|
|
|
|
|
||
December 31, 2024 |
|
|
|
|
|
||
Total Fiscal Year Ending 2024 |
|
|
|
$ |
|
||
10. ACCRUED EXPENSES
Accrued expenses consisted of the following:
|
|
March 31, |
|
|
December 31, |
|
||
|
|
|
|
|
|
|
||
Accrued pre-clinical and clinical costs |
|
$ |
|
|
$ |
|
||
Accrued product development costs |
|
|
|
|
|
|
||
Accrued license costs |
|
|
|
|
|
|
||
Accrued compensation |
|
|
|
|
|
|
||
Accrued administrative costs |
|
|
|
|
|
|
||
Accrued interest |
|
|
|
|
|
|
||
Total |
|
$ |
|
|
$ |
|
||
For the three months ended March 31, 2024 and 2023, there were
-14-
11. NET LOSS PER COMMON SHARE
The following table sets forth the computation of basic and diluted earnings per share for the three months ended March 31, 2024 and 2023:
|
|
Three Months Ended |
|
|
|||||
|
|
2024 |
|
|
2023 |
|
|
||
Net loss |
|
$ |
( |
) |
|
$ |
( |
) |
|
Weighted average number of common shares-basic |
|
|
|
|
|
|
|
||
Net loss per share of common stock-basic |
|
$ |
( |
) |
|
$ |
( |
) |
|
Stock options and warrants that have not been exercised and unvested restricted stock units (see Notes 13 and 14) have been excluded from the diluted calculation as all periods presented have a net loss and the impact of these securities would be anti-dilutive.
12. STOCKHOLDERS' EQUITY
Preferred Stock
The Company has authorized
Common Stock
The Company has authorized
On May 31, 2023, the Company entered into the Open Market Sale Agreement with Jefferies pursuant to which Jefferies is serving as the Company’s sales agent to sell shares of the Company’s common stock through an “at the market offering.” As of January 29, 2024, the Company was authorized to offer and sell up to $
On January 31, 2024, the Company entered into an underwriting agreement with Jefferies, as representative of the several underwriters, relating to an underwritten public offering of
The Company filed a new shelf registration statement and prospectus supplement effective March 20, 2024 for which the Company is authorized to offer and sell up to $
During the three months ended March 31, 2024 and 2023, the Company issued
During the three months ended March 31, 2024 and 2023, the Company issued
During the three months ended March 31, 2024 and 2023, the Company issued
-15-
13. STOCK-BASED COMPENSATION AWARDS
In April 2014, the Company adopted the Corbus Pharmaceuticals Holdings, Inc. 2014 Equity Incentive Plan (the “2014 Plan”). Pursuant to the 2014 Plan, the board of directors may grant incentive and nonqualified stock options and restricted stock to employees, officers, directors, consultants, and advisors. On March 14, 2024, the board of directors adopted the 2024 Equity Compensation Plan (the “2024 Plan”), subject to stockholder approval at the annual meeting of stockholders scheduled for May 16, 2024.
Pursuant to the terms of an annual evergreen provision in the 2014 Plan, the number of shares of common stock available for issuance under the 2014 Plan automatically increased on January 1 of each year by at least seven percent (
In accordance with the terms of the 2014 Plan, and pursuant to the annual evergreen provision contained in the 2014 Plan, effective as of January 1, 2023, the number of shares of common stock available for issuance under the 2014 Plan increased by
In accordance with the terms of the 2014 Plan, effective as of January 1, 2024, the number of shares of common stock available for issuance under the 2014 Plan increased by
Stock-based Compensation Expense
In connection with all stock-based compensation awards, total non-cash, stock-based compensation expense recognized in the condensed consolidated statements of operations and comprehensive loss was as follows:
|
|
Three Months Ended March 31, |
|
|
|||||
|
|
2024 |
|
|
2023 |
|
|
||
|
|
|
|
|
|
|
|
||
Research and development expenses |
|
$ |
|
|
$ |
|
|
||
General and administrative expenses |
|
|
|
|
|
|
|
||
Total stock-based compensation |
|
$ |
|
|
$ |
|
|
||
The total stock-based compensation expense recognized by award type was as follows:
|
|
Three Months Ended March 31, |
|
|
|||||
|
|
2024 |
|
|
2023 |
|
|
||
|
|
|
|
|
|
|
|
||
Stock options |
|
$ |
|
|
$ |
|
|
||
Restricted stock units |
|
|
|
|
|
|
|
||
Total stock-based compensation |
|
$ |
|
|
$ |
|
|
||
Stock Options
The fair value of each option award is estimated on the date of grant using the Black-Scholes option pricing model that uses the assumptions noted in the following table, except for the expected term for non-employees as noted in the following paragraph. The expected term of employee options granted under the 2014 Plan, all of which qualify as “plain vanilla” per SEC Staff Accounting Bulletin 107, is determined based on the simplified method due to the Company’s limited operating history and is
-16-
The weighted average assumptions used principally in determining the fair value of stock options granted to employees were as follows:
|
|
Three Months Ended March 31, |
|
|||||
|
|
2024 |
|
|
2023 |
|
||
Risk-free interest rate |
|
|
% |
|
|
% |
||
Expected dividend yield |
|
|
% |
|
|
|||
Expected term in years (employee options) |
|
|
|
|
|
|||
Expected volatility |
|
|
% |
|
|
% |
||
A summary of stock option activity for the three months ended March 31, 2024 is presented below:
Stock Options |
|
Shares |
|
|
Weighted |
|
|
Weighted Average |
|
|
Aggregate |
|
||||
Outstanding at December 31, 2023 |
|
|
|
|
$ |
|
|
|
|
|
|
|
||||
Granted |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Exercised |
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|||
Forfeited or canceled |
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|||
Expired |
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|||
Outstanding at March 31, 2024 |
|
|
|
|
$ |
|
|
|
|
|
$ |
|
||||
Exercisable at March 31, 2024 |
|
|
|
|
$ |
|
|
|
|
|
$ |
|
||||
The weighted average grant-date fair value of stock options granted during the three months ended March 31, 2024 and 2023 was $
Restricted Stock Units
A RSU represents the right to receive one share of our common stock upon vesting of the RSU. The fair value of each RSU is based on the closing price of our common stock on the date of grant. Pursuant to the 2014 Plan, the Company grants RSUs with service conditions that vest in four equal annual installments provided that the employee remains employed with the Company on the vesting date.
A summary of RSU activity for the three months ended March 31, 2024 is presented below:
RSU's |
|
Number of Shares Underlying RSUs |
|
|
Weighted |
|
||
Unvested at December 31, 2023 |
|
|
|
|
$ |
|
||
Granted |
|
|
|
|
$ |
|
||
Forfeited |
|
|
( |
) |
|
$ |
|
|
Vested |
|
|
( |
) |
|
$ |
|
|
Unvested at March 31, 2024 |
|
|
|
|
$ |
|
||
As of March 31, 2024, there was $
14. WARRANTS
-17-
At March 31, 2024, there were warrants outstanding to purchase
On January 26, 2018, the Company entered into an Investment Agreement with the Cystic Fibrosis Foundation ("CFF") that included issuance of a warrant to purchase an aggregate of
Risk-free interest rate |
|
|
% |
|
Expected dividend yield |
|
|
% |
|
Expected term in years |
|
|
|
|
Expected volatility |
|
|
% |
On July 28, 2020, the Company entered into the Loan and Security Agreement with K2HV and in connection with the funding of $
Risk-free interest rate |
|
|
% |
|
Expected dividend yield |
|
|
% |
|
Expected term in years |
|
|
|
|
Expected volatility |
|
|
% |
On October 16, 2020, the Company entered into a professional services agreement with an investor relations service provider. Pursuant to the agreement, the Company issued warrants exercisable for a total of
Risk-free interest rate |
|
|
% |
|
Expected dividend yield |
|
|
% |
|
Expected term in years |
|
|
|
|
Expected volatility |
|
|
% |
-18-
15. DERIVATIVE LIABILITY
On July 28, 2020, the Company, with its subsidiary, Corbus Pharmaceuticals, Inc., as borrower, entered into the secured Loan and Security Agreement with K2HV and received $
The value of these features is determined each reporting period by taking the present value of net cash flows with and without the prepayment features. The significant assumption used to determine the fair value of the debt without any features is the discount rate which has been estimated by using published market rates of CCC-rated public companies. All other inputs are taken from the Loan and Security Agreement. The additional significant assumptions used when valuing the prepayment feature is the probability of a change of control event. The Company has determined the probability from December 31, 2023 to March 31, 2024 has stayed consistent at
A roll forward of the fair value of the derivative liability for the three months ended March 31, 2024 is presented below.
|
|
March 31, 2024 |
|
|
Beginning balance, December 31, 2023 |
|
$ |
|
|
Change in fair value of derivative liabilities |
|
|
( |
) |
Ending balance, March 31, 2024 |
|
$ |
|
|
16. SUBSEQUENT EVENTS
Open Market Sale Agreement
From April 1, 2024, through the date hereof, the Company has sold
-19-
Item 2. |
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS. |
The following discussion and analysis of our financial condition and results of operations should be read together with our financial statements and the related notes and the other financial information included elsewhere in this Quarterly Report. This discussion contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those anticipated in these forward-looking statements as a result of various factors, including those discussed below and elsewhere in this Quarterly Report, particularly those under “Risk Factors.”
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This report on Form 10-Q contains forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 under Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements include statements with respect to our beliefs, plans, objectives, goals, expectations, anticipations, assumptions, estimates, intentions and future performance, and involve known and unknown risks, uncertainties and other factors, which may be beyond our control, and which may cause our actual results, performance or achievements to be materially different from future results, performance or achievements expressed or implied by such forward-looking statements. All statements other than statements of historical fact are statements that could be forward-looking statements. You can identify these forward-looking statements through our use of words such as “may,” “can,” “anticipate,” “assume,” “should,” “indicate,” “would,” “believe,” “contemplate,” “expect,” “seek,” “estimate,” “continue,” “plan,” “point to,” “project,” “predict,” “could,” “intend,” “target,” “potential” and other similar words and expressions of the future.
There are a number of important factors that could cause the actual results to differ materially from those expressed in any forward-looking statement made by us. These factors include, but are not limited to:
● |
our history of operating losses; |
● |
our current and future capital requirements and our ability to satisfy our capital needs; |
● |
our ability to complete required clinical trials of our product and obtain approval from the FDA or other regulatory agents in different jurisdictions; |
● |
our ability to internally develop new product candidates, intellectual property, and other product candidates we may acquire and/or license; |
● |
our ability to maintain or protect the validity of our patents and other intellectual property; |
● |
our ability to retain key executive members; |
● |
interpretations of current laws and the passages of future laws; |
● |
acceptance of our business model by investors; |
● |
the accuracy of our estimates regarding expenses and capital requirements; and |
● |
our ability to adequately support growth. |
The foregoing does not represent an exhaustive list of matters that may be covered by the forward-looking statements contained herein or risk factors that we are faced with that may cause our actual results to differ from those anticipated in our forward-looking statements. Please see “Risk Factors” for additional risks which could adversely impact our business and financial performance.
All forward-looking statements are expressly qualified in their entirety by this cautionary notice. You are cautioned not to place undue reliance on any forward-looking statements, which speak only as of the date of this report or the date of the document incorporated by reference into this report. We have no obligation, and expressly disclaim any obligation, to update, revise or correct any of the forward-looking statements, whether as a result of new information, future events or otherwise. We have expressed our expectations, beliefs and projections in good faith and we believe they have a reasonable basis. However, we cannot assure you that our expectations, beliefs, or projections will result or be achieved or accomplished.
-20-
Overview
Corbus Pharmaceuticals Holdings, Inc. (the “Company,” “Corbus,” “we,” “us,” or “our”) is a precision oncology company with a diversified portfolio and is committed to helping people defeat serious illness by bringing innovative scientific approaches to well-understood biological pathways. Our pipeline is comprised of two experimental drugs targeting solid tumors: CRB-701, a next-generation antibody drug conjugate (“ADC”) that targets the expression of Nectin-4 on cancer cells to release a cytotoxic payload; and CRB-601, an anti-integrin monoclonal antibody that blocks the activation of TGFβ expressed on cancer cells. The pipeline also includes CRB-913, a highly peripherally restricted cannabinoid type-1 (“CB1”) receptor inverse agonist for the treatment of obesity.
Our oncology pipeline:
Our obesity pipeline:
Recent Developments
Continued Listing on The Nasdaq Capital Markets
On November 10, 2023, we received a notice from the Listing Qualifications Staff (the “Staff”) of The Nasdaq Stock Market LLC (“Nasdaq”) indicating that we were not in compliance with the $2.5 million minimum stockholders’ equity requirement for continued listing of our common stock on The Nasdaq Capital Market, as set forth in Nasdaq Listing Rule 5550(b)(1) (the “Minimum Stockholders’ Equity Rule”) because our reported stockholders’ equity of $311,016 in our Quarterly Report on Form 10-Q for the period ended September 30, 2023 was below the required minimum of $2.5 million, and because, as of November 9, 2023 we did not meet the alternative compliance standards relating to the market value of listed securities of $35.0 million or net income from continuing operations of $500,000 in the most recently completed fiscal year or in two of the last three most recently completed fiscal years.
We submitted a plan of compliance to the Staff on December 26, 2023. On January 8, 2024, the Staff notified us that it granted an extension until May 8, 2024 to regain compliance, conditioned upon achievement of certain milestones included in the plan of compliance previously submitted to the Staff, including a plan to raise additional capital.
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On February 8, 2024, we received a notice from the Staff that we had regained compliance with the alternative continued listing standard because our market value of listed securities was $35.0 million or greater for at least 10 consecutive business days and that the matter was closed.
Open Market Sale Agreement
On May 31, 2023, we entered into the Open Market Sale Agreement with Jefferies pursuant to which Jefferies is serving as the sales agent to sell shares of our common stock through an “at-the-market offering.” As of January 29, 2024, we were authorized to offer and sell up to $75,000,000 of our common stock pursuant to the Open Market Sale Agreement and during the three months ended March 31, 2024, we sold 939,388 shares of our common stock and received gross proceeds of approximately $21,123,000.
Public Offering
On January 31, 2024, we entered into an underwriting agreement with Jefferies, as representative of the underwriters, relating to an underwritten public offering of 4,325,000 shares of our common stock at a price to the public of $19.00 per share. The underwriters were also granted a 30-day option to purchase up to an additional 648,750 shares of common stock at the public offering price. On January 31, 2024, Jefferies gave notice of the underwriters’ election to exercise the option to purchase additional shares, in full. On February 2, 2024, we completed the public offering raising gross proceeds of approximately $94,500,000 and net proceeds of $88,600,000 after deducting underwriting discounts and commissions and other offering expenses payable by us.
Shelf Registration Statement
We filed a new shelf registration statement and prospectus supplement effective March 20, 2024 for which we are authorized to offer and sell up to $150,000,000 of our common stock pursuant to the Open Market Sale Agreement. During the three months ended March 31, 2024, we did not make any sales under this shelf registration statement and prospectus supplement.
K2 HealthVentures LLC Debt Conversion
On March 6, 2024, K2HV converted $1,125,000 of the outstanding loan balance into 142,857 shares of our common stock at a conversion price of $7.875 per share.
Financial Operations Overview
We are a precision oncology company and have not generated any revenues from the sale of products. We do not expect to generate revenue from product sales unless and until we successfully complete development and obtain regulatory approval for the marketing of one of our product candidates, which we expect will take a number of years and is subject to significant uncertainty. We have never been profitable and at March 31, 2024, we had an accumulated deficit of approximately $443,583,000. Our net losses for the three months ended March 31, 2024 and 2023, were approximately $6,899,000 and $17,745,000, respectively.
We expect to continue to incur significant expenses for the foreseeable future. We expect our expenses to decline in 2024 as compared to 2023 as the upfront cost to license CRB-701 in 2023 of $7,500,000 will not recur and we incurred significant expenses in 2023 to manufacture CRB-601 for clinical studies. We will continue to incur significant operating losses as we move into the clinical phase and, accordingly, we will need additional financing to support our continuing operations. We will seek to fund our operations through public or private equity, debt financings or other sources, which may include government grants and collaborations with third parties. Adequate additional financing may not be available to us on acceptable terms, or at all. Our failure to raise capital as and when needed would have a negative impact on our financial condition and our ability to pursue our business strategy. We will need to generate significant revenues to achieve profitability, and we may never do so.
We expect to continue to incur operating losses for at least the next several years in connection with our ongoing activities, as we:
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Critical Accounting Policies and Estimates
Our condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the U.S. The preparation of these financial statements requires management to make estimates, assumptions, and judgments that affect the reported amounts of assets, liabilities, revenue, costs of expenses and related disclosures in the condensed consolidated financial statements. On an ongoing basis, we evaluate our estimates and judgments. We base our estimates and judgments on historical experience, current economic and industry conditions and on various other factors that are believed to be reasonable under the circumstances. This forms the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.
There have been no changes to the critical accounting estimates we identified in Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations in our 2023 Annual Report.
Results of Operations
Comparison of Three Months Ended March 31, 2024 and 2023
Research and Development. Research and development expenses for the three months ended March 31, 2024 totaled approximately $5,761,000, a decrease of $7,627,000 from approximately $13,388,000 recorded for the three months ended March 31, 2023. The decrease in first quarter 2024 as compared to first quarter 2023 was primarily attributable to a decrease of $7,500,000 in upfront licensing costs associated with the CSPC License Agreement and $1,200,000 associated with the achievement of the first development milestone under the UCSF License Agreement. These decreases were offset by an increase in contract research organizations ("CROs") costs associated with the start of the CRB-701 clinical trial in the U.S.
During 2018, we formed subsidiaries in the United Kingdom and Australia and approximately 30% and 16% of research and development expenses recorded for the three months ended March 31, 2024 and 2023, respectively, were recorded in these entities.
General and Administrative. General and administrative expense for the three months ended March 31, 2024 totaled approximately $3,861,000, a decrease of $48,000 from approximately $3,909,000 recorded for the three months ended March 31, 2023. The decrease in first quarter 2024 as compared to first quarter 2023 was primarily attributable to a decrease in salary expense of $287,000 due to permanent reductions in headcount taken in previous periods offset by an increase in franchise taxes of $151,000 as the assumed par value of the Company's capital has increased as a result of fewer shares outstanding due to the reverse stock split that occurred in 2023.
Other Income (Expense), Net. Other income (expense), net for the three months ended March 31, 2024 was income of approximately $2,724,000, an increase of $3,172,000 from an expense of approximately $448,000 recorded for the three months ended March 31, 2023. The increase in first quarter 2024 as compared to first quarter 2023 was primarily attributable to receipt of refundable research and development credits from a foreign tax authority of approximately $2,500,000, as well as higher investment income.
Liquidity and Capital Resources
Since inception, we have experienced negative cash flows from operations. We have financed our operations primarily through sales of equity-related securities. At March 31, 2024, our accumulated deficit since inception was approximately $443,583,000.
At March 31, 2024, we had total current assets of approximately $121,696,000 and current liabilities of approximately $25,923,000, resulting in working capital of approximately $95,773,000. Of our total cash, cash equivalents, investments, and restricted cash of $120,773,000 at March 31, 2024, approximately $115,944,000 was held within the U.S.
Net cash used in operating activities for the three months ended March 31, 2024 was approximately $7,967,000, which includes a net loss of approximately $6,899,000, adjusted for non-cash expenses of approximately $418,000 primarily related to stock-based compensation expense, and approximately $1,487,000 of cash used by net working capital items principally due to decreases in accounts payable and accrued expenses offset by an increase in prepaid expenses and other current assets.
Cash used in investing activities for the three months ended March 31, 2024 totaled approximately $98,236,000, which was principally related to purchases of marketable securities.
Cash provided by financing activities for the three months ended March 31, 2024 totaled approximately $106,583,000, which was principally related to proceeds from the issuance of common stock.
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We expect our cash, cash equivalents, and investments of approximately $120,103,000 at March 31, 2024 will be sufficient to meet our operating and capital requirements to support our operations through the first quarter of 2027, based on current planned expenditures.
We will need to raise significant additional capital to continue to fund operations, including pre-clinical and clinical costs for our product candidates. If we are unable to raise sufficient capital in the future, we may be required to undertake cost-cutting measures, including delaying or discontinuing certain clinical activities. We may seek to sell common stock, preferred stock, or convertible debt securities, enter into a credit facility or another form of third-party funding or seek other debt financing. In addition, we may seek to raise cash through collaborative agreements or from government grants. The sale of equity and convertible debt securities may result in dilution to our stockholders and certain of those securities may have rights senior to those of our common shares. If we raise additional funds through the issuance of preferred stock, convertible debt securities or other debt financing, these securities or other debt could contain covenants that would restrict our operations. Any other third-party funding arrangement could require us to relinquish valuable rights.
The source, timing and availability of any future financing will depend principally upon market conditions, and, more specifically, on the progress of our clinical development programs.
Funding may not be available when needed, at all, or on terms acceptable to us. Lack of necessary funds may require us, among other things, to delay, scale back or eliminate expenses including some or all of our planned clinical trials.
Off-Balance Sheet Arrangements
We do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors, other than future royalty payments under license agreements discussed as follows:
License Agreement with Jenrin
Pursuant to the terms of the license agreement (the "Jenrin License Agreement") with Jenrin Discovery, LLC (“Jenrin”), we are obligated to pay potential milestone payments to Jenrin totaling up to $18.4 million for each compound we elect to develop based upon the achievement of specified development and regulatory milestones. In addition, we are obligated to pay Jenrin royalties in the mid, single digits based on net sales of any Licensed Products, as defined in the Jenrin License Agreement, subject to specified reductions.
The Jenrin License Agreement terminates on a country-by-country basis and product-by-product basis upon the expiration of the royalty term for such product in such country. Each royalty term begins on the date of the first commercial sale of the licensed product in the applicable country and ends on the later of seven years from such first commercial sale or the expiration of the last to expire of the applicable patents in that country. The Jenrin License Agreement may be terminated earlier in specified situations, including termination for uncured material breach of the Jenrin License Agreement by either party, termination by Jenrin in specified circumstances, termination by Corbus with advance notice, and termination upon a party’s insolvency or bankruptcy.
License Agreement with Milky Way
Pursuant to the terms of the license agreement (the "Milky Way License Agreement") with Milky Way BioPharma, LLC (“Milky Way”), we are obligated to pay potential milestone payments to Milky Way totaling up to $53.0 million based upon the achievement of specified development and regulatory milestones. In addition, we are obligated to pay Milky Way royalties in the lower, single digits based on net sales of any Licensed Products, as defined in the Milky Way License Agreement.
The Milky Way License Agreement will remain in effect on a Licensed Product-by-License Product and country-by-country basis, until the expiration of the Royalty Term of the Licensed Product in the country. The "Royalty Term" means the period beginning from the First Commercial Sale of the Licensed Product in the country until the expiration of the last-to-expire Valid Claim in any Licensor Patent in the country that covers the composition of matter of the Licensed Product, the manufacture of the Licensed Product in the country, or a method of use of the Licensed Product for an indication for which Regulatory Approval has been obtained in the country. The Milky Way License Agreement may be terminated earlier in specified situations, including termination for material breach or termination by us with advance notice. A notice of termination without reason was executed by us and sent to Milky Way on January 25, 2024, terminating the Milky Way Agreement effective as of July 23, 2024.
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License Agreement with UCSF
Pursuant to the terms of the license agreement (the "UCSF License Agreement") with the Regents of the University of California, we are obligated to pay potential milestone payments totaling up to $153.15 million based upon the achievement of specified development and regulatory milestones, excluding indication milestones for antibodies used for diagnostic products and services that will be an additional $50,000 for each new indication. In addition, we are obligated to pay royalties in the lower, single digits based on net sales of any Licensed Products, as defined in the UCSF License Agreement, and any diagnostic products and services.
The UCSF License Agreement will remain in effect until the expiration or abandonment of the last of the Patent Rights licensed. The Royalty Term is the duration of Patent Rights in that country covering the applicable Licensed Product or Licensed Services Sold in the country. The UCSF License Agreement may be terminated earlier in specified situations, including termination for material breach, termination by us with advance notice, and termination upon a party's bankruptcy.
License Agreement with CSPC
Pursuant to the terms of the CSPC License Agreement with CSPC, we are obligated to pay potential milestone payments to CSPC totaling up to $130.0 million based upon the achievement of specified development and regulatory milestones and $555.0 million in potential commercial milestone payments. In addition, we are obligated to pay CSPC royalties in the low, double digits based on net sales of any Licensed Products, as defined in the CSPC License Agreement.
The CSPC License Agreement will remain in effect on a Licensed Product and on a country-by-country basis, until the expiration of the Royalty Term of the Licensed Product in the country. The Royalty Term is the period beginning from the First Commercial Sale of the Licensed Product in the country until the later of the expiration of the last-to-expire Valid Claim in any Licensor Patent in the country that Covers the Licensed product, 10 years after the date of the First Commercial Sale in the country, or expiration of the Regulatory Exclusivity for the Licensed Product in the country. The CSPC License Agreement may be terminated earlier in specified situations, including termination for material breach, termination by Corbus with advance notice, and termination upon a party's bankruptcy.
Item 3. Quantitative and Qualitative Disclosures About Market Risk.
Not Applicable.
Item 4. Controls and Procedures.
Evaluation of Our Disclosure Controls and Procedures
We maintain disclosure controls and procedures that are designed to provide reasonable assurance that material information required to be disclosed in our periodic reports filed under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms and to provide reasonable assurance that such information is accumulated and communicated to our management, our principal executive officer and our principal financial officer, to allow timely decisions regarding required disclosure. Our management, with the participation of our Chief Executive Officer and our Chief Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) of the Exchange Act, as amended) as of the end of the period covered by this report.
Based on that evaluation, our Chief Executive Officer and our Chief Financial Officer concluded that our disclosure controls and procedures as of the end of the period covered by this report were effective in ensuring that information required to be disclosed by us in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and that the information required to be disclosed by us in such reports is accumulated and communicated to our management, including our Chief Executive Officer and our Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.
Changes in Internal Control over Financial Reporting
There were no changes in our internal control over financial reporting (as defined in Rule 13a-15(f) of the Exchange Act) that occurred during the period to which this report relates that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
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PART II — OTHER INFORMATION
Item 1. Legal Proceedings.
We are not currently subject to any material legal proceedings. However, we may from time to time become a party to various legal proceedings arising in the ordinary course of our business.
Item 1A. Risk Factors.
There have been no material changes in or additions to the risk factors included in our Annual Report on Form 10-K for the year ended December 31, 2023.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
None.
Item 3. Defaults Upon Senior Securities.
None.
Item 4. Mine Safety Disclosures.
Not applicable.
Item 5. Other Information.
Director and Officer Trading Arrangements
On
Also on
No other directors or officers
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Item 6. Exhibits.
The exhibits listed below are filed or furnished as part of this Quarterly Report on Form 10-Q.
EXHIBIT INDEX
Exhibit No. |
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Description |
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3.1 |
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3.2 |
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10.1 |
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Form of Service Agreement between Corbus International Limited and Dominic Smethurst, dated February 27, 2024 (incorporated by reference to Exhibit 10.33 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2023 filed with the SEC on March 12, 2024). |
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31.1 |
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Certification of Chief Executive Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a).* |
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31.2 |
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Certification of Chief Financial Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a).* |
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32.1 |
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Certification of Chief Executive Officer pursuant to Rule 13a-14(b) or Rule 15d-14(b).** |
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32.2 |
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Certification of Chief Financial Officer pursuant to Rule 13a-14(b) or Rule 15d-14(b).** |
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101.INS |
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Inline XBRL Instance Document.* - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document |
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101.SCH |
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Inline XBRL Taxonomy Extension Schema Document.* |
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101.CAL |
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Inline XBRL Taxonomy Extension Calculation Linkbase Document.* |
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101.DEF |
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Inline XBRL Taxonomy Extension Definition Linkbase Document.* |
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101.LAB |
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Inline XBRL Taxonomy Extension Label Linkbase Document.* |
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101.PRE |
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Inline XBRL Taxonomy Extension Presentation Linkbase Document.* |
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104 |
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The cover page from the Company’s Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2024 is formatted in iXBRL* |
* |
Filed herewith. |
** |
Furnished, not filed. |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
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Corbus Pharmaceuticals Holdings, Inc. |
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Date: May 7, 2024 |
By: |
/s/ Yuval Cohen |
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Name: |
Yuval Cohen |
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Title: |
Chief Executive Officer |
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(Principal Executive Officer) |
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Date: May 7, 2024 |
By: |
/s/ Sean Moran |
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Name: |
Sean Moran |
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Title: |
Chief Financial Officer |
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(Principal Financial Officer and Chief Accounting Officer) |
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Exhibit 31.1
CERTIFICATION OF CHIEF EXECUTIVE OFFICER PURSUANT
TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Yuval Cohen, certify that:
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Date: May 7, 2024 |
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/s/ Yuval Cohen |
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Yuval Cohen |
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Chief Executive Officer |
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(Principal Executive Officer) |
Exhibit 31.2
CERTIFICATION OF CHIEF FINANCIAL OFFICER PURSUANT
TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Sean M. Moran, certify that:
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Date: May 7, 2024 |
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/s/ Sean Moran |
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Sean Moran |
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Chief Financial Officer |
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(Principal Financial Officer and Chief Accounting Officer) |
Exhibit 32.1
Certification of Chief Executive Officer Pursuant to
18 U.S.C. Section 1350,
as Adopted Pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002
This Certification is being filed pursuant to 18 U.S.C. Section 1350, as adopted by Section 906 of the Sarbanes-Oxley Act of 2002. This Certification is included solely for the purposes of complying with the provisions of Section 906 of the Sarbanes-Oxley Act and is not intended to be used for any other purpose. In connection with the accompanying Quarterly Report on Form 10-Q for the quarter ended March 31, 2024 (the “Quarterly Report”) of Corbus Pharmaceuticals Holdings, Inc. (the “Company”), the undersigned hereby certifies in his capacity as an officer of the Company that to such officer’s knowledge:
(1) The Quarterly Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
(2) The information contained in the Quarterly Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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By: |
/s/ Yuval Cohen |
Dated: May 7, 2024 |
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Yuval Cohen |
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Chief Executive Officer |
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(Principal Executive Officer) |
Exhibit 32.2
Certification of Chief Financial Officer Pursuant to
18 U.S.C. Section 1350,
as Adopted Pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002
This Certification is being filed pursuant to 18 U.S.C. Section 1350, as adopted by Section 906 of the Sarbanes-Oxley Act of 2002. This Certification is included solely for the purposes of complying with the provisions of Section 906 of the Sarbanes-Oxley Act and is not intended to be used for any other purpose. In connection with the accompanying Quarterly Report on Form 10-Q for the quarter ended March 31, 2024, (the “Quarterly Report”) of Corbus Pharmaceuticals Holdings, Inc. (the “Company”), the undersigned hereby certifies in his capacity as an officer of the Company that to such officer’s knowledge:
(1) The Quarterly Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
(2) The information contained in the Quarterly Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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By: |
/s/ Sean Moran |
Dated: May 7, 2024 |
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Sean Moran |
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Chief Financial Officer |
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(Principal Financial Officer and Chief Accounting Officer) |