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)
|
||
(State or other jurisdiction of incorporation or organization) |
|
(I.R.S. Employer Identification Number) |
|
||
(Address of principal executive offices) |
|
(Zip code) |
(
(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:
Title of Each Class |
|
Trading Symbol |
|
Name of Each Exchange on Which Registered |
|
|
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.
Large accelerated filer |
☐ |
|
Accelerated filer |
☐ |
☒ |
|
Smaller reporting company |
||
|
|
|
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
|
Page |
PART I |
|
|
|
FINANCIAL INFORMATION |
|
|
|
3 |
|
Condensed Consolidated Balance Sheets as of March 31, 2024 and December 31, 2023 |
3 |
4 |
|
5 |
|
Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2024 and 2023 |
6 |
7 |
|
2. Management’s Discussion and Analysis of Financial Condition and Results of Operations |
20 |
3. Quantitative and Qualitative Disclosures about Market Risk |
25 |
25 |
|
|
|
PART II |
|
|
|
OTHER INFORMATION |
|
|
|
26 |
|
1A. Risk Factors |
26 |
2. Unregistered Sales of Equity Securities and Use of Proceeds |
26 |
26 |
|
26 |
|
26 |
|
6. Exhibits |
27 |
-2-
PART I — FINANCIAL INFORMATION
Item 1. Financial Statements.
Corbus Pharmaceuticals Holdings, Inc.
Condensed Consolidated Balance Sheets (Unaudited)
|
|
March 31, 2024 |
|
|
December 31, 2023 |
|
||
|
|
|
|
|
|
|
||
ASSETS |
|
|
|
|
|
|
||
Current assets: |
|
|
|
|
|
|
||
Cash and cash equivalents |
|
$ |
|
|
$ |
|
||
Investments |
|
|
|
|
|
|
||
Restricted cash |
|
|
|
|
|
|
||
Prepaid expenses and other current assets |
|
|
|
|
|
|
||
Total current assets |
|
|
|
|
|
|
||
Restricted cash |
|
|
|
|
|
|
||
Property and equipment, net |
|
|
|
|
|
|
||
Operating lease right-of-use assets |
|
|
|
|
|
|
||
Other assets |
|
|
|
|
|
|
||
Total assets |
|
$ |
|
|
$ |
|
||
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
|
|
|
||
Current liabilities: |
|
|
|
|
|
|
||
Notes payable |
|
$ |
|
|
$ |
|
||
Accounts payable |
|
|
|
|
|
|
||
Accrued expenses |
|
|
|
|
|
|
||
Derivative liability |
|
|
|
|
|
|
||
Operating lease liabilities, current |
|
|
|
|
|
|
||
Current portion of long-term debt |
|
|
|
|
|
|
||
Total current liabilities |
|
|
|
|
|
|
||
Other long-term liabilities |
|
|
|
|
|
|
||
Operating lease liabilities, noncurrent |
|
|
|
|
|
|
||
Total liabilities |
|
|
|
|
|
|
||
Stockholders’ equity |
|
|
|
|
|
|
||
Preferred stock, $ |
|
|
|
|
|
|
||
Common stock, $ |
|
|
|
|
|
|
||
Additional paid-in capital |
|
|
|
|
|
|
||
Accumulated deficit |
|
|
( |
) |
|
|
( |
) |
Accumulated other comprehensive loss |
|
|
( |
) |
|
|
( |
) |
Total stockholders’ equity (deficit) |
|
|
|
|
|
( |
) |
|
Total liabilities and stockholders’ equity |
|
$ |
|
|
$ |
|
||
See notes to the unaudited condensed consolidated financial statements.
-3-
Corbus Pharmaceuticals Holdings, Inc.
Condensed Consolidated Statements of Operations and Comprehensive Loss
(Unaudited)
|
|
For the Three Months |
|
|
|||||
|
|
2024 |
|
|
2023 |
|
|
||
Operating expenses: |
|
|
|
|
|
|
|
||
Research and development |
|
$ |
|
|
$ |
|
|
||
General and administrative |
|
|
|
|
|
|
|
||
Total operating expenses |
|
|
|
|
|
|
|
||
Operating loss |
|
|
( |
) |
|
|
( |
) |
|
Other income (expense), net: |
|
|
|
|
|
|
|
||
Other income, net |
|
|
|
|
|
|
|
||
Interest expense, net |
|
|
( |
) |
|
|
( |
) |
|
Change in fair value of derivative liability |
|
|
|
|
|
|
|
||
Foreign currency transaction (loss) gain, net |
|
|
( |
) |
|
|
|
|
|
Other income (expense), net |
|
|
|
|
|
( |
) |
|
|
Net loss |
|
$ |
( |
) |
|
$ |
( |
) |
|
Net loss per share, basic and diluted |
|
$ |
( |
) |
|
$ |
( |
) |
|
Weighted average number of common shares outstanding, basic and diluted |
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
||
Comprehensive loss: |
|
|
|
|
|
|
|
||
Net loss |
|
$ |
( |
) |
|
$ |
( |
) |
|
Other comprehensive (loss) income : |
|
|
|
|
|
|
|
||
Change in unrealized (loss) gain on marketable debt securities |
|
|
( |
) |
|
|
|
|
|
Total other comprehensive (loss) income |
|
|
( |
) |
|
|
|
|
|
Total comprehensive loss |
|
$ |
( |
) |
|
$ |
( |
) |
|
See notes to the unaudited condensed consolidated financial statements.
-4-
Corbus Pharmaceuticals Holdings, Inc.
Condensed Consolidated Statements of Stockholders’ Equity
(Unaudited)
|
|
For the Three Months Ended March 31, 2024 |
|
|||||||||||||||||||||
|
|
Common Stock |
|
|
Additional |
|
|
Accumulated |
|
|
Accumulated |
|
|
Total |
|
|||||||||
|
|
Shares |
|
|
Amount |
|
|
Capital |
|
|
Deficit |
|
|
Loss |
|
|
Equity |
|
||||||
Balance at December 31, 2023 |
|
|
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|||
Issuance of common stock, net of issuance costs of $ |
|
|
|
|
|
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
||||
Issuance of common stock upon conversion of K2 Loan and Security Agreement |
|
|
|
|
|
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
||||
Issuance of common stock upon exercise of stock options |
|
|
|
|
|
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
||||
Issuance of common stock upon vesting of restricted stock |
|
|
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
Stock-based compensation expense |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
||
Change in unrealized gain (loss) on marketable debt securities |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
Net loss |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
Balance at March 31, 2024 |
|
|
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
||||
|
|
For the Three Months Ended March 31, 2023 |
|
|||||||||||||||||||||
|
|
Common Stock |
|
|
Additional |
|
|
Accumulated |
|
|
Accumulated |
|
|
Total |
|
|||||||||
|
|
Shares |
|
|
Amount |
|
|
Capital |
|
|
Deficit |
|
|
Loss |
|
|
Equity |
|
||||||
Balance at December 31, 2022 |
|
|
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
||||
Stock-based compensation expense |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
||
Issuance of common stock upon exercise of stock options |
|
|
|
|
|
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
||||
Change in unrealized gain (loss) on marketable debt securities |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
||
Net loss |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
— |
|
|
|
( |
) |
Balance at March 31, 2023 |
|
|
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
||||
See notes to the unaudited condensed consolidated financial statements.
-5-
Corbus Pharmaceuticals Holdings, Inc.
Condensed Consolidated Statements of Cash Flows
(Unaudited)
|
|
Three Months Ended |
|
|||||
|
|
2024 |
|
|
2023 |
|
||
Cash flows from operating activities: |
|
|
|
|
|
|
||
Net loss |
|
$ |
( |
) |
|
$ |
( |
) |
Adjustments to reconcile net loss to net cash used in operating activities: |
|
|
|
|
|
|
||
Stock-based compensation expense |
|
|
|
|
|
|
||
Depreciation expense |
|
|
|
|
|
|
||
Net amortization on discount of investments |
|
|
( |
) |
|
|
( |
) |
Loss (gain) on foreign currency transaction |
|
|
|
|
|
( |
) |
|
Amortization of debt discount |
|
|
|
|
|
|
||
Change in fair value of derivative liability |
|
|
( |
) |
|
|
|
|
Realized loss on investments |
|
|
|
|
|
|
||
Changes in operating assets and liabilities: |
|
|
|
|
|
|
||
Decrease (increase) in prepaid expenses and other current assets |
|
|
|
|
|
( |
) |
|
Decrease (increase) in other assets |
|
|
|
|
|
( |
) |
|
Decrease in operating lease right-of-use asset |
|
|
|
|
|
|
||
(Decrease) increase in other long-term liabilities |
|
|
( |
) |
|
|
|
|
Decrease in accounts payable |
|
|
( |
) |
|
|
( |
) |
(Decrease) increase in accrued expenses |
|
|
( |
) |
|
|
|
|
Decrease in operating lease liabilities |
|
|
( |
) |
|
|
( |
) |
Net cash used in operating activities |
|
|
( |
) |
|
|
( |
) |
Cash flows from investing activities: |
|
|
|
|
|
|
||
Purchases of investments |
|
|
( |
) |
|
|
( |
) |
Proceeds from sales and maturities of investments |
|
|
|
|
|
|
||
Net cash (used in) provided by investing activities |
|
|
( |
) |
|
|
|
|
Cash flows from financing activities: |
|
|
|
|
|
|
||
Proceeds from issuance of common stock |
|
|
|
|
|
|
||
Repayment of notes payable |
|
|
( |
) |
|
|
( |
) |
Repayment of long-term borrowings |
|
|
( |
) |
|
|
|
|
Issuance costs paid for common stock financings |
|
|
( |
) |
|
|
|
|
Net cash provided by (used in) financing activities |
|
|
|
|
|
( |
) |
|
Net increase (decrease) in cash, cash equivalents, and restricted cash |
|
|
|
|
|
( |
) |
|
Cash, cash equivalents, and restricted cash at beginning of the period |
|
|
|
|
|
|
||
Cash, cash equivalents, and restricted cash at end of the period |
|
$ |
|
|
$ |
|
||
Supplemental disclosure of cash flow information and non-cash transactions: |
|
|
|
|
|
|
||
Cash paid during the period for interest |
|
$ |
|
|
$ |
|
||
Proceeds from issuance of common stock not yet received |
|
$ |
|
|
$ |
|
||
Common stock issuance costs not yet paid |
|
$ |
|
|
$ |
|
||
Issuance of common stock for conversion of convertible debt |
|
$ |
|
|
$ |
|
||
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:
|
|
March 31, 2024 |
|
|
December 31, 2023 |
|
||
Cash |
|
$ |
|
|
$ |
|
||
Cash equivalents |
|
|
|
|
|
|
||
Cash and cash equivalents |
|
|
|
|
|
|
||
|
|
|
|
|
|
|
||
Restricted cash, current |
|
|
|
|
|
|
||
Restricted cash, noncurrent |
|
|
|
|
|
|
||
Restricted cash |
|
|
|
|
|
|
||
Total cash, cash equivalents, and restricted cash shown in the statement of cash |
|
$ |
|
|
$ |
|
||
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:
|
|
Amortized Cost |
|
|
Gross |
|
|
Gross |
|
|
Fair Value |
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Debt Securities: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Commercial paper |
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|||
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 March 31, 2024:
|
|
Amortized Cost |
|
|
Fair Value |
|
||
|
|
|
|
|
|
|
||
Maturing in one year or less |
|
$ |
|
|
$ |
|
||
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-