By taking a risk in 2014 and building a company around a single manmade cannabinoid, drugmaker Corbus Pharmaceuticals is now ahead of its larger peers on a number of key treatments, CEO Yuval Cohen said Thursday.
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“We are a tiny company, very nimble, but because we took the risk a number of years ago — whereas big pharma, remember, they’re slower, they’re more risk-averse — we’re actually ahead of the pack,” Cohen told CNBC in an interview with Jim Cramer.
Though cannabis has largely been seen as taboo by big pharma until recently, some of the larger names are waking up to the medical benefits its derivatives can provide.
Cohen specifically referenced a 2017 deal by Johnson & Johnson subsidiary Janssen Pharmaceuticals with clinical-stage biopharmaceutical company Bird Rock Bio to explore targeting cannabinoid receptors in the liver to treat NASH, or non-alcoholic steatohepatitis. On Tuesday, Tilray CEO Brendan Kennedy told Cramer his cannabis producer struck a deal with a division of Novartis.
But Cohen took special care to distinguish Lenabasum, Corbus’ flagship cannabinoid, from the plant-derived treatments many companies are promoting in the heat of the cannabis craze.
Lenabasum is a synthetic compound that targets a network of neurotransmitters in the human body called the endocannabinoid system to temper inflammation and fibrosis. It is currently in clinical trials for dermatomyositis, cystic fibrosis and systemic sclerosis, which affects 90,000 patients in the United States.
“None of our drugs is similar to the plant-derived cannabinoids — they’re known as phytocannabinoids. Our drugs are manmade. They’re rationally designed,” he told Cramer on “Mad Money.” “So the one thing they’re not, for example, is they’re not psychoactive. They don’t change your mood or the way you feel.”
Earlier Thursday, Corbus announced a deal to buy the rights to 600 endocannabinoid-focused compounds from Jenrin Discovery, a private company funded by BioAdvance that develops cannabinoid compounds to treat metabolic diseases.
But even though Corbus, which receives funding from the Cystic Fibrosis Foundation and the National Institute of Health, did not disclose the cost of the deal, Cohen said the cost shouldn’t taper investors’ enthusiasm about Corbus.
“Our cash position is strong,” he told Cramer. “And one of the nice things about the deal is it’s fairly back-ended. In other words, it’s very generous towards Jenrin, but more in the later stages rather than the earlier stages. And so we’re sharing the risk.”
Shares of Corbus ended Thursday’s trading session up 53.62 percent at $7.95 a share.
Disclosure: Cramer’s charitable trust owns shares of Johnson & Johnson.
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