Is Corbus Pharmaceuticals $CRBP stock a good buy? Corbus CRBP stock analysis & stock valuation
I’m Jeffrey Cohen. Now I’m going to talk about Corbus $CRBP. Corbus Pharmaceuticals. This is the second video in our series and what do you want to talk about? First thing we want to do is talk about is the valuation of the company. We did a spreadsheet and so hopefully you can see this nicely.
There are 125 million shares outstanding at 38 cents apiece as of the close last night. That values the firm at $47.6 million dollars. Remember that, $47.6 million valuation. They raised $60 million not long ago by selling stock at $2.38. That was two dollars higher. There is an at the money (ATM) program in effect so they could sell more. There’s no preferred stock. We don’t know how many institutional holders there are anymore. It’s hard to know with the stock falling so much. Debt: the company has $18.7 million dollars in debt at valuation. Net of the debt discount which i think is two or three million dollars. They arranged a $50 million loan agreement of which they borrowed $20 million plus paying interest. You have $20 million in debt all the other liabilities which I’ve added back. The debt before discount is $20 million so they owe about $39 million dollars in total liabilities.
What they have on hand is $97.8 million in cash (and MS). It’s alot of cash and marketable securities. That includes restricted cash that they’re holding.
They have other assets. Intangibles, whatever. Some lab equipment. $10 million dollars. Building owned? Maybe. The valuation or equity of the firm (assets — liabilities) is $21 million dollars.
When you buy a share of Corbus stock, you’re actually getting money because if they took the cash and bought back all the stock there’d actually be money left over. The company is trading at a discount. The price to book value is 0.69. This company is trading at a 31% discount to book value. I believe this is an unfair discount price to cash. It’s trading at 49% of the cash on hand. What’s going on Jeffrey? Why is the stock so inexpensive? I’m going to walk you through some points. I went through the 10-K. It just came out.
I’m going to talk you through some pictures. They put pictures in the 10-K which is unusual (except in biotech). The company’s down to 41 employees. They’ve hired some high-end people. Some real winners out there. Look at who they’re recruiting. They’re recruiting top-line talent, like data analysts who are going to figure out how to find the right drugs.
They have a diverse drug pipeline so you’re not just buying Lenabasum. It used to be that was their phase 3 (candidate) and it’s going to be great. They’re going to make money. Well, lenabasum has got a National Institute of Health Phase 2 study which should have top-line results in the next three months. But they’ve spent $150 million developing this drug. They’re only going to develop it further with a partner. That makes sense. Maybe it works only as an add-on to other treatments. It’s like an ingredient of a treatment cocktail. They’re focused on cannabinoid receptor type one, what they call inverse agonist. Not that you do, but if you were to smoke marijuana what would happen is you get the munchies. The munchies come from this cannabinoid receptor turning on. It’s like a joke, right? If you smoke pot, you get hungry.
The truth is that it has that kind of an effect. To diet, you don’t want that. What you want is you want to turn it off. In lab mice where they feed them a high fat, high caloric intake diet, they’re able to make the mice skinny by turning off the cannabinoid receptor number one. That’s fine, and you can also do things around fibrotic diseases and inflammation by turning that off too. The human cannabinoid system.
I’m not a doctor, right? I’m a money guy. I’m a financial analyst. i work with quantum computing. I build big models. I’ve got a huge model running right now.
If you can stop inflammation, if you can stop fibrosis, if you can speed up the metabolism without the hunger. The model works. The cannabinoid system is that survival system. If a bear scratched you and you’re laying on the ground and you’re gonna die it’s the cannabinoid system that works… not on your brain…not on your nervous system, but your cannabinoid system. It is a survival system.
The third type of drug that they’re building and they’re in big competition right now with Pfizer, so a big area right. It’s immune resistant cancer. Normally there’s a communication that goes like this. You get a cancer cell. I’m out in the sun too much. Maybe you get a little thing on your face. Normally, it tells your body that it is bad. Go fight it . What happens is your body fights it. The immune response comes in and it reduces or eliminates that cancer. They have a drug (candidate) right now that turns up that communication. It works on solid tumors and it makes a body reduce the size, weight and volume of the solid tumor. I can show you some pictures from their 10-K.
In-vitro, in a lab it works. They’re not treating people yet so that’s interesting immuno-oncology cannabinoid system research. That’s why it’s called a pot stock. This is pretty cool. You got some good stuff here.
Now let’s be real. You’re getting the whole company at a huge discount. It’s trading at $47.6 million dollars for the company that spent much more developing all these drugs and candidates and marketing and hiring great people. So Jeff, where’s the catch? Storytime. I met someone last week and I was talking with them about Corbus $CRBP. I said,
it’s either going to the moon or it goes to zero. I don’t think there’s middle ground here. They will need to raise additional capital or borrow more money to keep going. They have money now and they say they’re funded through the first quarter of 2024. Let’s be real. If they need money at $0.38 a share it’s going to be very expensive to dilute the stock. They can borrow money. They can partner with someone like a Pfizer, right? They have an At The Market (ATM) program where they can sell stock whenever they want. They raised $82 million at $2.38 cents a share so that was a good sale. Now it’s $0.38 cents a share. They’ve already spent $350 million dollars developing their drug pipeline lenabasum.
It’s done. They’re not going to spend more money on it without a partner unless of course the NIH and the FDA come back and say “you know what, it really does work” and “we got a serious drug candidate here”. Corbis has cut their operating expenses in half. Love it. Their interest expense is going up a little but they’ve cut their operating expense in half.
By cutting expenses by half, by not having Phase 3 trial expenses, they will survive longer. Big competition with Pfizer so I see that as a positive. If I go back to the to the valuation again, they have $97.8 million dollars cash on hand plus restricted cash plus marketable securities. $100 million dollars. Stock trades at $48 million. You have a stock trading at a discount to cash.
If you Google SEC EDGAR Search, add your ticker CRBP, then the 10-K just came out a couple days ago. I have ownership disclosures too. First ownership disclosure is that the CEO bought
a couple of shares. He owns about as many as I do. CEO bought them at $0.37 a share. The CFO owns twice as many shares. The CFO would know about the discounts and the valuation. The CFO is buying stock. Not a lot, five grand, but then again if you work for Corbus you’re probably not making much money. That’s great to see insider CFO & CEO buying stock like yesterday, two days ago, wednesday.
I love it. They just filed 3/10 and 3/9 they bought the stock. It’s not a lot, but then again it makes me want to buy a few hundred more shares, or maybe a few thousand more shares. To be honest, I could buy a lot more than that. Let’s take a look at the 10-K and also the press release. Maybe I will go through the press release quickly.
The first thing is they are going to initiate clinical studies they believe in 2023 so they like the new drug pipeline. They want to do a strategic transaction to expand their pipeline because they know that there’s something there. Again, they have $98.3 million. They hired Dr. Rachael Brake as the Chief Scientific Officer. That’s a good hire.
They have an anti-integrin monoclonal antibodies program targeting the inhibition of the beta cells to go after solid tumors. They think it works in a lab. Then they have crb 602 which is going after fibrosis. They’ve got the second generation cannabinoid receptor type 1 inverse agonist going after the metabolism.
BTW I think that’s good. Anything that’s going to help people lose weight it’s like a migraine drug it’s a it’s gonna be good. We’ve got an obesity and diabetes problem if you can solve it with a pill or with a shot just go for it. And top-line data everyone’s been waiting for from the NIH to come back. There was in the arthritis magazine a recent publication about how lenabasum works. It may not be enough to be its own standalone drug but it works and they go through the clinical process of how it works. That’s great
They have no revenue. They basically have no revenue. no one’s reimbursing them. they didn’t win any awards. BTW, SBIR guys, let’s go get some funding right or let’s go get some government grants something. I think you guys are being a little lazy there. Go get some money, okay? Net loss of $10 million so they reduced dramatically their burn rate which I love. That’s what I see in the press release and the presentation.
Let’s look at the 10-K. When I go through the 10-K, the first thing i see is they’ve got their immuno-oncology is all pre-clinical. Solid tumors with fibrosis their lenabasum is back to Phase 2 for the NIH-funded program. Their metabolism work which they’re is wrapping up pre-clinical.
Immune evasion so that the drugs cut the cancers. They come in and somehow they’ve blocked the communication. They compare themselves against Pfizer and other drugs and they talk about how if you’re going to activate the receptor and so a hundred percent inhibition is a problem. Pfizer maybe takes down it to 90 percent or 80 inhibition. Their molecule takes it down to almost zero inhibition so it works. Tumor volume using CRB 601 at 10 milligrams per kilogram of body weight the tumor volume drops. Control group here one thousand to three thousand takes it down to what it looks like about 500 or 300 tumor weight by gram, 1:3 or 1:1.25 Let’s take a three gram tumor drops down to between zero and a half. That’s great work guys. Let’s bring this to people. Let’s talk about inverse agonist for the treatment of metabolic and fibrotic high fat diet. What happens is you’re able to have a short term reduction in body weight. You don’t want to go to zero of course because then you’d have nothing you would turn matter into energy, Albert Einstein e = mc squared. We don’t want to go that far. We’re not going to make the mouse disappear but we can cut body weight 10 or 15 percent in 5 to 10 days.
Can you imagine a pill where I could lose 15 pounds? I love it. Just don’t lose muscle and don’t please don’t take my bones like in Harry Potter. The good thing about this drug is it doesn’t give you adverse side effects in your brain because this particular drug doesn’t stay in your head. That’s part of the problem with the metabolic drugs is they they they cause really bad side effects. I’m not going to make a joke out of it because it’s not funny.
Someone’s calling my work phone. That’s terrific guys, thank you so much. Just to go back to solid tumors, Pfizer in the lead. Okay, they have to compete with Pfizer. Hopefully Corbus is quick enough to do this or else Corbus is going to be second or third to market. Going after the av beta 8 with a monoclonal antibody is the Corbus approach.
Going after colon cancer & breast cancer. This is what we talked about
inhibiting or getting it to activate, right? So, if you reduce the inhibition so when they looked at other things like the precursor that they had was the diamonds (in the chart) and now crb-601 which they’ve licensed looks very effective. It works in a lab and is it going to work in people? Let’s talk about the metabolics. Obesity is a big problem and diet obesity is a big problem. We eat we eat because we’re hungry. Sometimes we eat because we think we’re hungry. Sometimes we eat because of a diabetic response. You can fight it with this inverse agonist against cannabinoid receptor one. There were shortcomings. That’s what I wanted to talk about. The shortcoming was it had side effects, depression and suicidality. The whole drug class was abandoned. This drug
doesn’t accumulate in the brain. That’s very important so then you don’t have the side effect and this is when we talk about the change in the body weight. Nothing’s forever as the body changes but
it’s amazing how this thing could work. you could lose 5% to 10% body weight just by taking a pill.
I thought it was interesting to note they’ve got intellectual property protection which is important. We may just wrap this video up right now.
If we look at Corbus over the year, it’s traded way, way down.
Way, way down
It dropped like a rock look over the last five days though showing a little bit of strength. It could be showing strength on the fact that the company executives have been buying it back. I’m not sure, but it’s nice to see so we bought our last tranche of stock around $0.32 cents a share and
it’s coming up but at $0.40 cents I think this stock is still a rock bottom discount.
To wrap it up, Corbus traded last night, market close, at a 69% valuation to book and 49% of cash on hand. It’s like the market is paying you $21.5 million dollars to buy the stock. They are currently down to 41 employees. They cut their operating expense in half. They’ve already spent $350 million dollars developing the pipeline. They’ve got a diverse drug pipeline, it looks like they got a lot of options here. They’re going to work with a partner to further develop Lenabasum because they just spent $150 million dollars in the last year and a half on it. You’re not going to spend much more unless of course the NIH comes back with good data. They have an At The Market program so be careful. The last time they sold the stock it was at $2.38 and they raised $60 million dollars They’re smart, but they will need to raise additional capital or borrow in order to keep going. It looks like they have $30 million dollars of borrowing capacity, but that’s going to be expensive money. I like the stock, and I think it’s great. Today it’s up 6.5% and so maybe the market’s with me here
All right, thank you very much for watching. I appreciate it. We’re going to end the stream. There were no questions. Bye-bye now
Here is the original video on YouTube.
