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What changed in Corbus Pharmaceuticals Holdings, Inc.'s 10-K — 2022 vs 2023

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Paragraph-level year-over-year comparison of Corbus Pharmaceuticals Holdings, Inc.'s 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+365 added−334 removedSource: 10-K (2024-03-12) vs 10-K (2023-03-07)

Top changes in Corbus Pharmaceuticals Holdings, Inc.'s 2023 10-K

365 paragraphs added · 334 removed · 240 edited across 6 sections

Item 1. Business

Business — how the company describes what it does

70 edited+71 added−33 removed57 unchanged
Biggest changePost-Marketing Requirements Following approval of a new product, a pharmaceutical company and the approved product are subject to continuing regulation by the FDA and other federal and state regulatory authorities, including, among other things, monitoring and recordkeeping activities, reporting to applicable regulatory authorities of adverse experiences with the product, providing the regulatory authorities with updated safety and efficacy information, product sampling and distribution requirements, and complying with promotion and advertising requirements, which include, among others, standards for direct-to-consumer advertising, restrictions on promoting drugs for uses or in patient populations not described in the drug’s approved labeling (known as “off-label use”), and limitations on industry-sponsored scientific and educational activities.
Biggest changeDecentralized Procedure — The most recently introduced of the three processes for obtaining approval of new medicinal processes in the European Union, the decentralized procedure is similar to the mutual recognition procedure described above, but with differences in the timing that key documents are provided to concerned member states by the reference member state, the overall timing of the procedure and the possibility of, among other things, “clock stops” during the procedure. 21 Post-Marketing Requirements Following approval of a new product, a pharmaceutical company and the approved product are subject to continuing regulation by the FDA and other federal and state regulatory authorities, including, among other things, monitoring and recordkeeping activities, reporting to applicable regulatory authorities of adverse experiences with the product, providing the regulatory authorities with updated safety and efficacy information, product sampling and distribution requirements, and complying with promotion and advertising requirements, which include, among others, standards for direct-to-consumer advertising, restrictions on promoting drugs for uses or in patient populations not described in the drug’s approved labeling (known as “off-label use”), and limitations on industry-sponsored scientific and educational activities.
In addition, we utilize and will continue to utilize consultants, clinical research organizations and third parties to perform our pre-clinical studies, clinical studies, manufacturing, and regulatory functions. Corporate Information Corbus Pharmaceuticals, Inc. (formerly known as JB Therapeutics Inc.), was incorporated on April 24, 2009 under the laws of the State of Delaware.
In addition, we utilize and will continue to utilize consultants, clinical research organizations and third parties to perform our pre-clinical studies, clinical studies, manufacturing, and regulatory functions. 24 Corporate Information Corbus Pharmaceuticals, Inc. (formerly known as JB Therapeutics Inc.), was incorporated on April 24, 2009 under the laws of the State of Delaware.
These regulations include: • the federal healthcare program anti-kickback law which prohibits, among other things, persons from soliciting, receiving or providing remuneration, directly or indirectly, to induce either the referral of an individual, for an item or service or the purchasing or ordering of a good or service, for which payment may be made under federal healthcare programs such as the Medicare and Medicaid programs; • federal false claims laws which prohibit, among other things, individuals or entities from knowingly presenting, or causing to be presented, claims for payment from Medicare, Medicaid, or other government reimbursement programs that are false or fraudulent.
These regulations include: 22 • the federal healthcare program anti-kickback law which prohibits, among other things, persons from soliciting, receiving or providing remuneration, directly or indirectly, to induce either the referral of an individual, for an item or service or the purchasing or ordering of a good or service, for which payment may be made under federal healthcare programs such as the Medicare and Medicaid programs; • federal false claims laws which prohibit, among other things, individuals or entities from knowingly presenting, or causing to be presented, claims for payment from Medicare, Medicaid, or other government reimbursement programs that are false or fraudulent.
In cancer, TGFβ mediates immune evasion (Figure 6) and plays a key role in promoting cancer cell growth and metastasis via its immunosuppressive effects in the tumor microenvironment. When overexpressed in the tumor milieu, TGFβ is linked to poor clinical outcomes (Figure 7).
In cancer, TGFβ mediates immune evasion and plays a key role in promoting cancer cell growth and metastasis via its immunosuppressive effects in the tumor microenvironment. When overexpressed in the tumor milieu, TGFβ is linked to poor clinical outcomes (Figure 7).
For this and more comprehensive risks related to our intellectual property, please see “Risk Factors—Risks Relating to Our Intellectual Property Rights.” In addition to patent protection, we rely on trade secrets and know-how to develop and maintain our competitive position.
For this and more comprehensive risks related to our intellectual property, please see “Risk Factors—Risks Relating to Our Intellectual Property Rights.” 14 In addition to patent protection, we rely on trade secrets and know-how to develop and maintain our competitive position.
The Jenrin intellectual property portfolio includes eight granted United States patents and nine granted patents outside of the United States. The portfolio includes U.S. Patent No. 8,853,252 which granted with claims relating to the cannabinoid receptor blocker CRB-913 and methods of using the same for treating obesity, diabetes, hepatic disorders, and/or cardiometabolic disorders.
The Jenrin intellectual property portfolio includes eight granted U.S. patents and nine granted patents outside of the U.S. The portfolio includes U.S. Patent No. 8,853,252 which granted with claims relating to the cannabinoid receptor blocker CRB-913 and methods of using the same for treating obesity, diabetes, hepatic disorders, and/or cardiometabolic disorders.
We do not intend our use or display of other companies’ trade names, service marks or trademarks to imply a relationship with, or endorsement or sponsorship of us by, any other companies. Other trademarks, trade names and service marks appearing in this report are the property of their respective owners. 20
We do not intend our use or display of other companies’ trade names, service marks or trademarks to imply a relationship with, or endorsement or sponsorship of us by, any other companies. Other trademarks, trade names and service marks appearing in this report are the property of their respective owners. 25
For example, the two-year spending law signed by the President of United States on February 9, 2018 includes a provision raising the manufacturer discount to 70% in 2019 in the Medicare Part D coverage gap, also known as the “donut hole.” Under prior law, manufacturers were required to provide a 50% discount on prescription drugs purchased in the donut hole.
For example, the two-year spending law signed by the President of U.S. on February 9, 2018 includes a provision raising the manufacturer discount to 70% in 2019 in the Medicare Part D coverage gap, also known as the “donut hole.” Under prior law, manufacturers were required to provide a 50% discount on prescription drugs purchased in the donut hole.
In both the United States and foreign markets, our ability to commercialize our product candidates successfully, and to attract commercialization partners for our product candidates, depends in significant part on the availability of adequate financial coverage and reimbursement from third-party payers, including, in the United States, governmental payers such as the Medicare and Medicaid programs, managed care organizations, and private health insurers.
In both the U.S. and foreign markets, our ability to commercialize our product candidates successfully, and to attract commercialization partners for our product candidates, depends in significant part on the availability of adequate financial coverage and reimbursement from third-party payers, including, in the U.S., governmental payers such as the Medicare and Medicaid programs, managed care organizations, and private health insurers.
We also seek and will continue to seek trademark protection in the United States and outside of the United States where available and when appropriate. We use and intend to use these registered marks in connection with our pharmaceutical research and development as well as our product candidates.
We also seek and will continue to seek trademark protection in the U.S. and outside of the U.S. where available and when appropriate. We use and intend to use these registered marks in connection with our pharmaceutical research and development as well as our product candidates.
Similar filings are required in other countries. The clinical stage of development can generally be divided into three sequential phases that may overlap: Phase 1, Phase 2, and Phase 3 clinical trials. In Phase 1, generally, small numbers of healthy volunteers are initially exposed to single escalating doses and then multiple escalating doses of the product candidate.
The clinical stage of development can generally be divided into three sequential phases that may overlap: Phase 1, Phase 2, and Phase 3 clinical trials. In Phase 1, generally, small numbers of healthy volunteers are initially exposed to single escalating doses and then multiple escalating doses of the product candidate.
(the “Company” or “Corbus”) is a precision oncology company committed to helping people defeat serious illness by bringing innovative scientific approaches to well understood biological pathways.
(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.
The United States Congress and state legislatures may, from time to time, propose and adopt initiatives aimed at cost containment, which could impact our ability to sell our product candidates profitably.
The U.S. Congress and state legislatures may, from time to time, propose and adopt initiatives aimed at cost containment, which could impact our ability to sell our product candidates profitably.
CRB-701 is a monoclonal antibody attached to an MMAE cytotoxic payload using a proprietary linker technology. CSPC has developed a manufacturing process under current good manufacturing practice (“cGMP”) to produce batches of drug substance and drug product for pre-clinical and clinical studies. CSPC will supply drug substance and drug product in support of clinical and commercial activities.
CRB-701 is a monoclonal antibody attached to an MMAE cytotoxic payload using a proprietary linker technology. CSPC has developed a manufacturing process under current good manufacturing practice (“cGMP”) to produce batches of drug substance and drug product for pre-clinical and clinical studies.
TGFβ is held in an inactive state in association with latency associate peptide (LAP) and is presented on cell surfaces by latent transforming growth factor β binding proteins (e.g., LTBP1, GARP); these three components comprising the large latent complex (LLC).
TGFβ is normally stored in the extracellular matrix as an inactive latent pro-protein complex. TGFβ is held in an inactive state in association with latency associate peptide (LAP) and is presented on cell surfaces by latent transforming growth factor β binding proteins (e.g., LTBP1, GARP); these three components comprising the large latent complex ("LLC").
PADCEV® toxicity and safety limitations include serious and potentially life-threatening skin reactions and peripheral neuropathy, which negatively impact tolerability and dose intensity (Figure 2). Figure 1: Nectin-4 is a clinically validated target with untapped potential 5 Figure 2: PADCEV ® safety limitations CRB-701 is designed to be an improved next generation site-specific Nectin-4 targeting ADC (Figure 3).
PADCEV® toxicity and safety limitations include serious and potentially life-threatening skin reactions and peripheral neuropathy, which negatively impact tolerability and dose intensity (Figure 1). 5 Figure 1: PADCEV ® safety limitations CRB-701 is designed to be an improved next-generation site-specific Nectin-4 targeting ADC (Figure 2).
The last of the licensed patent applications, if granted, is projected to expire in 2043. 12 CRB-913: Second Generation CB1 Inverse Agonist On September 20, 2018, we entered into an exclusive license agreement with Jenrin Discovery, LLC which provides us with an exclusive worldwide license to develop and market cannabinoid compounds covered by the Jenrin issued patents and patent applications that cover the composition and method of use of selective cannabinoid receptor modulators.
CRB-913: Second Generation CB1 Receptor Inverse Agonist On September 20, 2018, we entered into an exclusive license agreement with Jenrin Discovery, LLC which provides us with an exclusive worldwide license to develop and market cannabinoid compounds covered by the Jenrin issued patents and patent applications that cover the composition and method of use of selective cannabinoid receptor modulators.
In pre-clinical models, CRB-601 demonstrates enhanced anti-tumor activity when combined with anti-PD-1 checkpoint inhibitor therapy compared to either single agent alone. Pre-clinical data suggests that blockade of latent TGFβ production by CRB-601 can lead to changes in immune cell infiltration in the tumor microenvironment, potentially enhancing the benefit of PD-1 blockade.
In pre-clinical models, CRB-601 demonstrates enhanced anti-tumor activity when combined with an anti-PD-1 checkpoint inhibitor compared to each single agent on its own. The data suggests that blockade of latent TGFβ production by CRB-601 can lead to changes in immune cell infiltration in the tumor microenvironment thus potentially enhancing the benefit of PD-1 blockade.
Drug substance for CRB-601 will be produced by a contract manufacturer through recombinant DNA technology utilizing genetically engineered host cells, upstream cell culture processes and downstream purification methods as required to manufacture the drug substance.
CRB-601 is produced by a contract manufacturer through recombinant DNA technology utilizing genetically engineered host cells, upstream cell culture processes and downstream purification methods as required to manufacture the drug substance for use in the manufacture of the drug product.
In February 2023, the Company obtained a license from CSPC, a subsidiary of CSPC Pharmaceutical Group Limited, to develop and commercialize the drug in the United States, Canada, the European Union (including the European Free Trade Area), the United Kingdom, and Australia. The IND for CRB-701 has been cleared by the U.S.
In February 2023, we obtained a license from CSPC to develop and commercialize the drug in the U.S., Canada, the European Union (including the European Free Trade Area), the United Kingdom and Australia. The IND for CRB-701 has been cleared by the U.S.
After the FDA grants orphan drug designation, the identity of the therapeutic agent and its potential orphan use are disclosed publicly by the FDA. Orphan product designation does not convey any advantage in or shorten the duration of regulatory review and approval process.
Orphan product designation must be requested before submitting an NDA or BLA. After the FDA grants orphan drug designation, the identity of the therapeutic agent and its potential orphan use are disclosed publicly by the FDA. Orphan product designation does not convey any advantage in or shorten the duration of regulatory review and approval process.
CRB-601 is a monoclonal antibody and we are in the process of developing a manufacturing process under cGMP to produce batches of drug substance and drug product for pre-clinical and clinical studies.
CRB-601 is a monoclonal antibody and we have developed a manufacturing process under cGMP to produce batches of drug substance and drug product for pre-clinical and clinical studies.
Distribution of pharmaceutical products is subject to additional requirements and regulations, including extensive record-keeping, licensing, traceability, and storage and security requirements intended to prevent the unauthorized sale of pharmaceutical products The handling of any controlled substances must comply with the U.S. Controlled Substances Act and the Controlled Substances Import and Export Act.
Distribution of pharmaceutical products is subject to additional requirements and regulations, including extensive record-keeping, licensing, traceability, and storage and security requirements intended to prevent the unauthorized sale of pharmaceutical products. Moreover, some pharmaceutical products may be classified as controlled substances and the handling of any controlled substances must comply with the U.S.
In other situations, post-approval studies aim to gain additional indications for a medication or develop new dosage forms for a medication. 15 Special Protocol Assessment The Federal Food, Drug, and Cosmetic Act directs the FDA to meet with sponsors, pursuant to a sponsor’s written request, for the purpose of reaching agreement on the design and size of clinical trials intended to form the primary basis of an efficacy claim in a New Drug Application (NDA) or a Biologic Licensing Application (BLA).
Special Protocol Assessment The Federal Food, Drug, and Cosmetic Act directs the FDA to meet with sponsors, pursuant to a sponsor’s written request, for the purpose of reaching agreement on the design and size of clinical trials intended to form the primary basis of an efficacy claim in a New Drug Application (NDA) or a Biologic Licensing Application (BLA).
CRB-601: Anti-Integrin Monoclonal Antibody 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, as amended to include additional inventions effective November 17, 2022.
CRB-601: Anti-Integrin Monoclonal Antibody We entered into a license agreement (the “UCSF License Agreement”) with the Regents of the University of California (“The Regents”) effective May 26, 2021, as amended to include additional inventions effective November 17, 2022, and further amended to include certain new technology rights effective August 14, 2023.
Similarly, the a v b 8 integrin appears to be the only TGFβ activating integrin expressed on regulatory T-cells, highlighting the key contribution of this integrin to immunosuppression. Tumor cells can also evade host immunity by activating TGF b via integrin a v b 8.
Similarly, the a v b 8 integrin appears to be the only TGFβ activating integrin expressed on regulatory T-cells, highlighting the key contribution of this integrin to immunosuppression.
A REMS could include medication guides, physician communication plans, or elements to assure safe use, such as restricted distribution methods, patient registries and other risk minimization tools. Any of these limitations on approval or marketing could restrict the commercial promotion, distribution, prescription or dispensing of products. Product approvals may be withdrawn for non-compliance with regulatory standards or if problems occur.
A REMS could include medication guides, physician communication plans, or elements to assure safe use, such as restricted distribution methods, patient registries and other risk minimization tools. Any of these limitations on approval or marketing could restrict the commercial promotion, distribution, prescription or dispensing of products.
Pursuant to the UCSF License Agreement, the Company received an exclusive worldwide license to certain patent applications relating to humanized antibodies against integrin αvβ8, an antibody for diagnostic use, along with non-exclusive licenses to certain related know-how and materials.
Pursuant to the UCSF License Agreement, we received an exclusive worldwide license to certain patent applications relating to humanized antibodies against integrin αvβ8, an antibody for diagnostic use, along with non-exclusive licenses to certain related know-how and materials. The last of the licensed patent applications, if granted, is projected to expire in 2043.
The FDA may conduct a pre-approval inspection of the manufacturing facilities for the new product to determine whether they comply with current good manufacturing practice requirements and may also audit data from clinical and pre-clinical trials.
The review and evaluation of applications by the FDA is extensive and time consuming and may take several years to complete. The FDA may conduct a pre-approval inspection of the manufacturing facilities for the new product to determine whether they comply with current good manufacturing practice requirements and may also audit data from clinical and pre-clinical trials.
We and our manufacturing vendors and clinical sites must also obtain separate state registrations, permits or licenses in order to be able to obtain, handle, and distribute controlled substances for clinical trials or commercial sale, and failure to meet applicable regulatory requirements could lead to enforcement and sanctions by the states in addition to those from the DEA or otherwise arising under federal law.
We and our manufacturing vendors and clinical sites must also obtain separate state registrations, permits or licenses to be able to obtain, handle, and distribute controlled substances for clinical trials or commercial sale, and failure to meet applicable regulatory requirements could lead to enforcement and sanctions by the states in addition to those from the DEA or otherwise arising under federal law. 23 Third-Party Payer Coverage and Reimbursement Significant uncertainty exists as to the coverage and reimbursement status of any of our drug candidates that ultimately may obtain regulatory approval.
There can be no assurance that we will receive orphan drug designation for our products. 16 Drug Development in Europe In the European Union, our future products may also be subject to extensive regulatory requirements. Similar to the U.S., the marketing of medicinal products is subject to the granting of marketing authorizations by regulatory agencies.
Drug Development in Europe In the European Union, our future products may also be subject to extensive regulatory requirements. Similar to the U.S., the marketing of medicinal products is subject to the granting of marketing authorizations by regulatory agencies.
Corbus’ internal development pipeline includes 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.
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.
If a drug designated as an orphan product receives marketing approval for an indication broader than what is designated, it may not be entitled to orphan drug exclusivity. We have received orphan drug designation for lenabasum for cystic fibrosis, systemic sclerosis, and dermatomyositis.
If a drug designated as an orphan product receives marketing approval for an indication broader than what is designated, it may not be entitled to orphan drug exclusivity.
The targeted delivery of CRB-701 is designed to maximize delivery of MMAE while minimizing toxicity to normal tissues. CRB-701's longer half-life and low free plasma payload supports less frequent dosing. The complexity and cost of manufacturing for CRB-701 has also been reduced by the drug’s single enzyme and improved linker technology. CRB-701 may also offer immune-mediated tumor destruction functionality.
MMAE is then released upon internalization within the target cell. The targeted delivery of CRB-701 is designed to maximize delivery of MMAE while minimizing toxicity to healthy tissues. CRB-701's longer half-life and lower free plasma payload supports less frequent dosing. The complexity and cost of manufacturing CRB-701 has also been reduced by the drug’s single enzyme and improved linker technology.
FDA and the drug is currently being investigated by CSPC in a Phase 1 dose escalation clinical trial in patients with advanced solid tumors in China. Corbus is planning to bridge data from the Phase 1 trial in China to support a U.S. clinical trial starting in mid-2024.
FDA and the drug is currently being investigated by CSPC in a Phase 1 dose escalation clinical trial in patients with advanced solid tumors in China. We are on schedule to bridge data from this Phase 1 clinical trial in China to commence a Phase 1 clinical trial in the U.S. during the first quarter of 2024.
Pursuant to the CSPC License Agreement, the Company received an exclusive license to CRB-701 for the prevention and treatment of all oncology indications in the United States, Canada, the European Union (including the European Free Trade Area), the United Kingdom, and Australia. The last of the licensed patent applications, if granted, is projected to expire in 2042.
Pursuant to the CSPC License Agreement, we received an exclusive license to CRB-701 for the prevention and treatment of all oncology indications in the U.S., Canada, the European Union (including the European Free Trade Area), the United Kingdom, and Australia.
Sometimes, these studies are used to gain additional experience from the treatment of patients in the intended therapeutic condition. In certain instances, the FDA may mandate the performance of Phase 4 studies.
Sometimes, these studies are used to gain additional experience from the treatment of patients in the intended therapeutic condition. In certain instances, the FDA may mandate the performance of Phase 4 studies. In other situations, post-approval studies aim to gain additional indications for a medication or develop new dosage forms for a medication.
Orphan drug status provides seven years of market exclusivity in the U.S. and ten years in Europe and Japan beginning on the date of drug approval. 13 Other Intellectual Property Matters Our commercial success depends in part on our ability to obtain and maintain patent and other proprietary protection for our technologies and to operate without infringing the proprietary right of others and to prevent others from infringing our proprietary rights.
Other Intellectual Property Matters Our commercial success depends, in part, on our ability to obtain and maintain patent and other proprietary protection for our technologies and to operate without infringing the proprietary right of others and to prevent others from infringing our proprietary rights.
These firms are subject to inspections by the FDA at any time, and the discovery of violative conditions could result in enforcement actions that interrupt the operation of any such facilities or the ability to distribute products manufactured, processed or tested by them. 17 Other Regulatory Matters Manufacturing, sales, promotion and other activities following product approval are also subject to regulation by numerous regulatory authorities in addition to the FDA, including, in the United States, the Centers for Medicare & Medicaid Services, or CMS, other divisions of the Department of Health and Human Services, the Drug Enforcement Administration, the Consumer Product Safety Commission, the Federal Trade Commission, the Occupational Safety & Health Administration, the Environmental Protection Agency, and state and local governments.
Other Regulatory Matters Manufacturing, sales, promotion and other activities following product approval are also subject to regulation by numerous regulatory authorities in addition to the FDA, including, in the U.S., the Centers for Medicare & Medicaid Services, or CMS, other divisions of the Department of Health and Human Services, the Drug Enforcement Administration, the Consumer Product Safety Commission, the Federal Trade Commission, the Occupational Safety & Health Administration, the Environmental Protection Agency, and state and local governments.
In February 2023, the Company obtained a license from CSPC Megalith Biopharmaceutical Co., Ltd ("CSPC"), a subsidiary of CSPC Pharmaceutical Group Limited, to develop and commercialize the drug in the United States ("U.S."), Canada, the European Union (including the European Free Trade Area), the United Kingdom, and Australia (the “CSPC License Agreement”).
Ltd ("CSPC"), a subsidiary of CSPC Pharmaceutical Group Limited, to develop and commercialize the drug in the United States ("U.S."), Canada, the European Union (including the European Free Trade Area), the United Kingdom and Australia (the “CSPC License Agreement”). The Investigational New Drug (“IND”) application for CRB-701 was cleared by the U.S.
The licensed intellectual property portfolio provides intellectual property protection in the United States for CRB-913 and these uses through November 2028. Corbus owns a patent application covering CRB-913 that can result in patent rights projected to expire in 2043. Lenabasum Program We have filed patent applications directed to lenabasum, compositions and methods for treating disease using lenabasum.
The licensed intellectual property portfolio provides intellectual property protection in the U.S. for CRB-913 and these uses through November 2028. We own a patent application covering CRB-913 that can result in patent rights projected to expire in 2043.
Manufacturing and Supply of CRB-701, CRB-601, and CRB-913 We do not own or operate manufacturing facilities and rely on third-party contract manufacturing organizations or licensing partners to supply Corbus with drugs for pre-clinical and clinical studies. CRB-701 is designed to be an improved next generation site-specific Nectin-4 targeting antibody drug conjugate.
Manufacturing and Supply of CRB-701, CRB-601, and CRB-913 We do not own or operate manufacturing facilities and rely on third-party contract manufacturing organizations or licensing partners to supply us with drugs for pre-clinical and clinical studies and commercial activities.
There can be no assurance that any country that has price controls or reimbursement limitations for pharmaceutical products will allow favorable reimbursement and pricing arrangements for any of our products.
There can be no assurance that any country that has price controls or reimbursement limitations for pharmaceutical products will allow favorable reimbursement and pricing arrangements for any of our products. Historically, products launched in the European Union do not follow price structures of the U.S. and generally tend to be significantly lower.
Review and Approval in the United States Following pivotal or Phase 3 trial completion, data are analyzed to determine safety and efficacy. Data are then filed with the FDA in an NDA or BLA, along with proposed labeling for the product and information about the manufacturing and testing processes and facilities that will be used to ensure product quality.
Data are then filed with the FDA in an NDA or BLA, along with proposed labeling for the product and information about the manufacturing and testing processes and facilities that will be used to ensure product quality. In the U.S., FDA approval of an NDA or BLA must be obtained before marketing a pharmaceutical product.
Corbus is planning to bridge data from this Phase 1 trial to support a U.S. clinical trial starting in mid-2024. • CRB-601 is an anti-αvβ8 monoclonal antibody that blocks the activation of TGFβ expressed on cancer cells in the tumor microenvironment.
We are on schedule to bridge data from this Phase 1 clinical trial in China to commence a Phase 1 clinical trial in the U.S. during the first quarter of 2024. • CRB-601 is a potent and selective anti-αvβ8 monoclonal antibody that blocks the activation of latent TGFβ found on cancer cells.
Research and development expenses are incurred for the development of our drug candidates and consist primarily of payroll and payments to contract research and development companies. To date, these costs are related to generating pre-clinical data and the cost of manufacturing drug product for clinical trials and conducting clinical trials.
These expenses include cash and non-cash expenses relating to the development of our clinical and pre-clinical programs for our pipeline. Research and development expenses are incurred for the development of our drug candidates and consist primarily of payroll and payments to contract research and development companies.
Intellectual Property Our commercial success depends in part on our ability to obtain and maintain patent and other proprietary protection for our technologies, products and processes, including proprietary protection for CRB-701, CRB-601, CRB-913, and lenabasum. CRB-701: Antibody Drug Conjugate (ADC) Targeting Nectin-4 The Company entered into the CSPC License Agreement with CSPC effective February 12, 2023.
Intellectual Property Our commercial success depends, in part, on our ability to obtain and maintain patent and other proprietary protection for our technologies, products and processes, including proprietary protection for CRB-701, CRB-601, and CRB-913.
The drug leverages site specific conjugation and novel linker technology to enable homogeneous payload incorporation. The linker technology attaches the MMAE cytotoxic payload to the monoclonal antibody and is designed to keep the MMAE attached to the monoclonal antibody until it binds to the Nectin-4 receptor on the target cell. MMAE is then released upon internalization within the target cell.
The drug benefits from site specific conjugation and novel linker technology to create a stable linker and enable homogeneous payload incorporation with a reproducible drug-to-antibody ration (“DAR”) of 2. The linker technology attaches the MMAE cytotoxic payload to the monoclonal antibody and is designed to hold on to the ADC until it binds to Nectin-4 on the target cell.
Failure to comply with the applicable requirements at any time during the product development process, approval process or after approval, may subject an applicant to administrative or judicial sanctions.
The process of obtaining regulatory approvals and the subsequent compliance with appropriate federal, state, local and foreign statutes and regulations require the expenditure of substantial time and financial resources. Failure to comply with the applicable requirements at any time during the product development process, approval process or after approval may subject an applicant to administrative or judicial sanctions.
CRB-701 CRB-701 is a novel clinical stage ADC that targets the expression of Nectin-4 on cancer cells to release a cytotoxic payload of monomethyl auristatin E (MMAE).
We are currently conducting IND enabling studies and we expect to file an IND in the fourth quarter of 2024. 4 Our pipeline is as follows: CRB-701 CRB-701 is a novel clinical stage ADC that targets the expression of Nectin-4 on cancer cells to release a cytotoxic payload of monomethyl auristatin E (“MMAE”).
Orphan Drug Designation Under the Orphan Drug Act, the FDA may grant orphan drug designation to a drug intended to treat a rare disease or condition, which is generally a disease or condition that affects fewer than 200,000 individuals in the United States. Orphan product designation must be requested before submitting an NDA or BLA.
As a result, the ultimate effect, implementation, and meaning of the BPCIA is subject to uncertainty. Orphan Drug Designation Under the Orphan Drug Act, the FDA may grant orphan drug designation to a drug intended to treat a rare disease or condition, which is generally a disease or condition that affects fewer than 200,000 individuals in the U.S.
Competition The biotechnology and pharmaceutical industries are characterized by a rapid pace of new innovation and discoveries, fierce competition and strong defense of intellectual property. We face competition from major pharmaceutical and biotechnology companies, academic institutions, governmental agencies and public and private research institutions, among others. Competitors to CRB-701 who are targeting Nectin-4 include Seagen, Bicycle Therapeutics, and Mabwell.
We face competition from major pharmaceutical and biotechnology companies, academic institutions, governmental agencies, and public and private research institutions, among others. Competitors to CRB-701 who are targeting Nectin-4 include Pfizer, Eli Lilly, Bicycle Therapeutics, Mabwell and Adcentrx Therapeutics, in addition to Pfizer and its approved PADCEV product.
The requirement for state registrations could also result in delay of the manufacturing, distribution of lenabasum or in the completion of our current clinical studies.
While some states automatically schedule a drug based on federal action, other states schedule drugs through rulemaking or a legislative action. The requirement for state registrations could also result in delay of the manufacturing, distribution of our drugs or in the completion of our current clinical studies.
CRB-601 is being developed as a potential treatment for patients with solid tumors in combination with existing therapies, including checkpoint inhibitors, and is scheduled for an IND submission in the second half of 2023.
CRB-601 is being developed as a potential treatment for patients with solid tumors in combination with existing therapies, including checkpoint inhibitors. On January 9, 2024, we announced that the FDA cleared the IND for CRB-601 and we expect to enroll the first patient in a Phase 1 study in the summer of 2024.
The targeting of Nectin-4 on cancer cells to release the cytotoxic payload MMAE is a clinically validated target as Enfortumab vedotin (PADCEV®) has been approved for the treatment of urothelial cancer (Figure 1). However, PADCEV® is also associated with serious adverse events and has a corresponding black box warning in its label.
Additional sites in the United Kingdom and Europe will be added to the program thereafter. The targeting of Nectin-4 on cancer cells to release the cytotoxic payload MMAE is a clinically validated target as enfortumab vedotin ("EV" or "PADCEV®") has been approved for the treatment of metastatic urothelial cancer ("mUC").
CRB-913 is a second-generation cannabinoid receptor type 1 (CB1) inverse agonist and we have developed a manufacturing process under cGMP to produce batches of drug substance for pre-clinical and IND-enabling studies. Drug substance for CRB-913 has been produced by a contract manufacturer to initiate drug product studies.
CRB-913 is a second-generation CB1 receptor inverse agonist and we are developing manufacturing processes with a contract manufacturer under cGMP to produce batches of drug substance and drug product for pre-clinical and IND-enabling studies. Competition The biotechnology and pharmaceutical industries are characterized by a rapid pace of new innovation and discoveries, fierce competition and strong defense of intellectual property.
Upon binding of the LAP-TGFβ complex to the αvβ8 integrin TGF b is released and can now activate the TGF b receptor and the associated SMAD signaling pathway that leads to a related transcription translation program of TGF b target genes.
Upon binding of the LAP-TGFβ complex to the αvβ8 integrin, TGF b is released and binds to TGF b receptors triggering a kinase ("SMAD") signaling pathway that leads to a related transcription translation program of TGF b- targeted genes. CRB-601 was specifically designed to bind at the latent TGFβ activation site on αvβ8 (Figure 8), thereby blocking αvβ8-dependent activation.
In the diet-induced obesity mice model (DIO), CRB-913 demonstrates a reduction in weight, food consumption, and fat deposits in the liver and improvement in insulin resistance and leptinemia. CRB-913 induces weight loss both as a monotherapy (Figure 10) and in combination with the incretin analogs liraglutide (Saxenda TM ), semaglutide (Wegovy TM ) and tirzepatide (Mounjaro TM ) (Figure 11).
In a DIO mouse model, CRB-913, as a monotherapy and in combination with incretin analogs ( tirzepatide, semaglutide, or liraglutide), demonstrates a reduction in body weight in DIO mice and improvements were observed in body fat content, leptinemia, insulin resistance, liver triglycerides, liver fat deposits, and liver histology.
Though state-controlled substances laws often mirror federal law because the states are separate jurisdictions, they may separately schedule drugs, as well. While some states automatically schedule a drug based on federal action, other states schedule drugs through rulemaking or a legislative action.
Controlled Substances Act and the Controlled Substances Import and Export Act. Individual states have also established controlled substance laws and regulations. Though state-controlled substances laws often mirror federal law because the states are separate jurisdictions, they may separately schedule drugs, as well.
Competitors to CRB-913 who are also targeting obesity include Eli Lilly, Novo Nordisk, Amgen, and Pfizer. 14 Regulatory Matters Government Regulation The process of obtaining regulatory approvals and the subsequent compliance with appropriate federal, state, local and foreign statutes and regulations require the expenditure of substantial time and financial resources.
CRB-701 and CRB-601 are regulated as biologics; and CRB-913 is regulated as a drug. The process of obtaining regulatory approvals and the subsequent compliance with appropriate federal, state, local and foreign statutes and regulations requires the expenditure of substantial time and financial resources.
Historically, products launched in the European Union do not follow price structures of the United States and generally tend to be significantly lower. 19 Employees We had 33 full-time employees at December 31, 2022. All our employees are engaged in administration, finance, clinical, manufacturing, regulatory and business development functions. We believe our relations with our employees are good.
Employees We had 19 full-time employees at December 31, 2023. All our employees are engaged in administration, finance, clinical, biology, and manufacturing functions. We believe our relations with our employees are good.
The FDA will likely re-analyze the clinical trial data, which could result in extensive discussions between the FDA and us during the review process. The review and evaluation of applications by the FDA is extensive and time consuming and may take several years to complete.
The NDA or BLA must contain proof of safety, purity, potency, and efficacy, which entails extensive pre-clinical and clinical testing. The FDA will likely re-analyze the clinical trial data, which could result in extensive discussions between the FDA and us during the review process.
The αvβ8 integrin is a key regulator of TGFβ that is co-opted in many late-stage metastatic cancers to function as a pro-cancer cytokine. TGFβ is normally stored in the extracellular matrix as an inactive latent pro-protein complex.
Tumor cells can also evade host immunity by activating TGF b via integrin a v b 8. 9 Figure 7: TGFβ predicts poor clinical outcomes in a subset of cancer patients The αvβ8 integrin is a key regulator of TGFβ that is co-opted in many late-stage metastatic cancers to function as a pro-cancer cytokine.
Any product development activities related to products that we may develop or acquire in the future will be subject to extensive regulation by various government authorities, including the FDA, other federal, state and local agencies and comparable regulatory authorities in other countries, which regulate the design, research, clinical and pre-clinical development, testing, manufacturing, storage, distribution, import, export, labeling, advertising and marketing of pharmaceutical products and devices.
Food and Drug Administration, or FDA, in the U.S. and by comparable authorities in other countries. These entities regulate, among other things, the design, research, pre-clinical and clinical development, testing, manufacturing, storage, distribution, import, export, labeling, advertising and marketing of pharmaceutical products and devices.
The Investigational New Drug (IND) application for CRB-701 has been cleared by the U.S. FDA and the drug is currently being investigated by CSPC in a Phase 1 dose escalation clinical trial in patients with advanced solid tumors in China.
Food and Drug Administration (“FDA”) in 2022 and the drug is currently being investigated by CSPC in a Phase 1 dose-escalation clinical trial in patients with advanced solid tumors in China. On January 26, 2024, we presented data from the Phase 1 dose-escalation trial in China for the first eighteen patients reflective of the first six dose cohorts.
The Company in-licensed the intellectual property for CRB-601 from Dr. Stephen Nishimura’s laboratory at the University of California, San Francisco. TGFβ is a multifunctional cytokine involved in many cellular processes, including cell growth and differentiation, immune response, wound healing, and tissue repair.
On January 9, 2024, we announced that the FDA cleared the IND for CRB-601 and we expect to enroll the first patient in a Phase 1 study in the summer of 2024. TGFβ is a multifunctional cytokine involved in many cellular processes including cell growth and differentiation, immune response, wound healing and tissue repair.
In the diet-induced obesity mice model (DIO), CRB-913 demonstrates a reduction in weight and food consumption, improvement in insulin resistance and leptinemia, and reduced fat deposits in the liver.
Our obesity pipeline: • CRB-913 is a second-generation highly peripherally restricted CB1 receptor inverse agonist designed to treat obesity. In a diet-induced obesity ("DIO") mouse model, CRB-913 demonstrates a reduction in body weight, body fat content, leptinemia, insulin resistance, liver triglycerides, liver fat deposits, and improvements in liver histology.
Competitors to CRB-601 who are also targeting the TGFβ pathway in cancer include Bristol Meyers, Merck KGaA, Pfizer, Sanofi, Argenx, Morphic, Pliant and Scholar Rock.
Competitors to CRB-601 who are also targeting the latent TGFβ pathway in cancer include AbbVie, Pfizer, Argenx, Morphic, Pliant and Scholar Rock. Competitors to CRB-913 who are also targeting obesity include AstraZeneca, Eli Lilly, Novo Nordisk, Amgen, and Pfizer. 15 Regulatory Matters Government Regulation Our activities and products are significantly regulated by a number of governmental entities, including the U.S.
The Company has also developed CRB-913, an endocannabinoid small molecule drug, for the treatment of obesity and is seeking partners to fund further development. Corbus’ precision oncology internal development pipeline: • CRB-701 is a next generation ADC that targets the expression of Nectin-4 on cancer cells to release a cytotoxic payload.
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: • CRB-701 is a next-generation ADC targeting the expression of Nectin-4 on cancer cells to release a cytotoxic payload. In February 2023 we obtained a license from CSPC Megalith Biopharmaceutical Co.
Research and Development We incurred expenses of approximately $16,137,000 and $36,445,000 for research and development activities for the years ended December 31, 2022 and 2021, respectively. These expenses include cash and non-cash expenses relating to the development of our clinical and pre-clinical programs for our pipeline.
Figure 12: Enhanced combo effect with semaglutide or tirzepatide Figure 13: Demonstrated significant reduction in body fat content but not lean mass 13 Research and Development We incurred expenses of approximately $31,168,000 and $16,137,000 for research and development activities for the years ended December 31, 2023 and 2022, respectively.
Removed
The Company expects to enroll the first patient in the Phase 1 study by the end of 2023. 4 Corbus’ endocannabinoid pipeline: • CRB-913 is a second-generation cannabinoid receptor type 1 (CB1) inverse agonist designed to treat obesity and related metabolic diseases.
Added
The data was presented at ASCO-GU. The emerging clinical data shows that CRB-701 was well-tolerated and demonstrated an overall response rate ("ORR") of 43% and a disease control rate ("DCR") of 71% in the seven patients who received doses predicted to be therapeutically relevant.
Removed
The CRB-913 program is in the pre-clinical stage, and we are seeking partnerships to fund further development. • Lenabasum is a novel, synthetic, oral molecule that selectively activates cannabinoid receptor type 2 (CB2) for the treatment of inflammation and fibrosis. The drug completed Phase 3 studies in dermatomyositis and systemic sclerosis and these studies failed to meet their primary endpoints.
Added
These outcomes were further improved when CRB-913 was used in combination with incretin analogs ( tirzepatide, semaglutide, or liraglutide).
Removed
In November 2022, the National Institutes of Health released results for the Phase 2 study it sponsored in systemic lupus erythematosus and lenabasum failed to demonstrate efficacy versus placebo. We do not plan to conduct additional clinical studies for lenabasum.
Added
Figure 2: CRB-701 Next generation site-specific Nectin-4 targeting ADC 6 On January 26, 2024, we presented the first clinical data from the ongoing Phase 1 clinical trial of CRB-701 conducted by our development partner, CSPC. The data was presented at ASCO-GU.
Removed
During 2023, we plan on conducting pre-clinical translational studies and, in partnership with CSPC, plan to develop a companion diagnostic to identify tumors other than urothelial cancer that express lower levels of Nectin-4. The companion diagnostic is expected to help identify patients who are likely to respond to the therapy.
Added
The Phase 1 dose escalation study is being conducted in China and is enrolling patients with mUC, as well as patients with other solid tumors prospectively confirmed to have Nectin-4 positive tumors.
Removed
The antibody for CRB-701 binds to the Fc receptor to trigger innate immune-mediated destruction as a secondary mechanism of action (Figure 4).
Added
The study opened for enrollment in January 2023 and the data presented is through December 2023 from the first 18 patients reflective of the first 6 dose cohorts (0.2-3.6 mg/kg).

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

116 edited+38 added−21 removed243 unchanged
Biggest changeIf, for any reason, we should fail to maintain compliance with these listing standards and Nasdaq should delist our securities from trading on its exchange and we are unable to obtain listing on another national securities exchange, a reduction in some or all of the following may occur, each of which could have a material adverse effect on our stockholders: • the liquidity of our common stock; • the market price of our common stock; • our ability to obtain financing for the continuation of our operations; • the number of institutional and general investors that will consider investing in our common stock; • the number of investors in general that will consider investing in our common stock; • the number of market makers in our common stock; • the availability of information concerning the trading prices and volume of our common stock; and • the number of broker-dealers willing to execute trades in shares of our common stock. 43 Our failure to maintain compliance with Nasdaq’s continued listing requirements could result in the delisting of our common stock On January 3, 2022, we received a letter (the “Notice”) from the Listing Qualifications Staff (the “Staff) of the Nasdaq Stock Market, LLC (“Nasdaq”) indicating that, based upon the closing bid price of our common stock for the last 30 consecutive business days, we are not in compliance with the requirement to maintain a minimum bid price of $1.00 per share for continued listing on the Nasdaq Global Market, as set forth in Nasdaq Listing Rule 5550(a)(2) (the “Minimum Bid Price Requirement”).
Biggest changeIf, for any reason, we should fail to maintain compliance with these listing standards and Nasdaq should delist our securities from trading on its exchange and we are unable to obtain listing on another national securities exchange, a reduction in some or all of the following may occur, each of which could have a material adverse effect on our stockholders: • the liquidity of our common stock; • the market price of our common stock; • our ability to obtain financing for the continuation of our operations; • the number of institutional and general investors that will consider investing in our common stock; • the number of investors in general that will consider investing in our common stock; • the number of market makers in our common stock; • the availability of information concerning the trading prices and volume of our common stock; and • the number of broker-dealers willing to execute trades in shares of our common stock.
Risk Related to our Company and our Business Risks Related to Our Financial Position and Need for Capital We are a biopharmaceutical company with a limited operating history . We are a biopharmaceutical company with a limited operating history.
Risk Related to our Company and our Business Risks Related to Our Business, Financial Position and Need for Capital We are a biopharmaceutical company with a limited operating history . We are a biopharmaceutical company with a limited operating history.
All of our product candidates that we do not intend to out-license are in the discovery stage, pre-clinical, or clinical development stage. We must complete clinical studies and other development activity and receive regulatory approval of an NDA or BLA, before commercial sales of a product can commence.
All our product candidates that we do not intend to out-license are in the discovery stage, pre-clinical, or clinical development stage. We must complete clinical studies and other development activity and receive regulatory approval of an NDA or BLA, before commercial sales of a product can commence.
Determining the history of development of certain of our intellectual property is made more difficult by the fact that certain of our intellectual property was developed by other companies for other indications before being acquired by us. Consequently, we cannot be sure that we have all of the documentary records relevant to such an analysis.
Determining the history of development of certain of our intellectual property is made more difficult by the fact that certain of our intellectual property was developed by other companies for other indications before being acquired by us. Consequently, we cannot be sure that we have all the documentary records relevant to such an analysis.
There is no assurance that a jury and/or court would find in our favor on questions of infringement, validity, or enforceability. 37 We may be subject to claims that we have wrongfully hired an employee from a competitor or that we or our employees have wrongfully used or disclosed alleged confidential information or trade secrets of their former employers.
There is no assurance that a jury and/or court would find in our favor on questions of infringement, validity, or enforceability. We may be subject to claims that we have wrongfully hired an employee from a competitor or that we or our employees have wrongfully used or disclosed alleged confidential information or trade secrets of their former employers.
If we raise additional funds through collaborations and licensing arrangements, we may be required to relinquish some rights to our technologies or candidate products, or to grant licenses on terms that are not favorable to us. 39 If we are not successful in attracting and retaining highly qualified personnel, we may not be able to successfully implement our business strategy.
If we raise additional funds through collaborations and licensing arrangements, we may be required to relinquish some rights to our technologies or candidate products, or to grant licenses on terms that are not favorable to us. If we are not successful in attracting and retaining highly qualified personnel, we may not be able to successfully implement our business strategy.
Debt financing, if obtained, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, and could increase our expenses and require that our assets secure such debt. 22 Equity financing, if obtained, could result in dilution to our then existing stockholders and/or require such stockholders to waive certain rights and preferences.
Debt financing, if obtained, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, and could increase our expenses and require that our assets secure such debt. Equity financing, if obtained, could result in dilution to our then existing stockholders and/or require such stockholders to waive certain rights and preferences.
If we are unable to continue to attract and retain high-quality personnel, the rate and success at which we can develop and commercialize product candidates would be limited. If product liability lawsuits are brought against us, we may incur substantial liabilities and may be required to limit commercialization of our drug candidates.
If we are unable to continue to attract and retain high-quality personnel, the rate and success at which we can develop and commercialize product candidates would be limited. 46 If product liability lawsuits are brought against us, we may incur substantial liabilities and may be required to limit commercialization of our drug candidates.
The commencement and completion of clinical studies can be delayed for a number of reasons, including delays related to: ▪ the FDA failing to grant permission to proceed and placing the clinical study on hold; ▪ subjects failing to enroll or remain in our trials at the rate we expect; ▪ a facility manufacturing any of our drug candidates being ordered by the FDA or other government or regulatory authorities to temporarily or permanently shut down due to violations of cGMP requirements or other applicable requirements, or cross-contaminations of product in the manufacturing process; ▪ any changes to our manufacturing process that may be necessary or desired; ▪ subjects choosing an alternative treatment for the indications for which we are developing our drug candidates, or participating in competing clinical studies; ▪ subjects experiencing severe or unexpected drug-related adverse effects; ▪ reports of similar technologies and products raising safety and/or efficacy concerns; ▪ third-party clinical investigators losing their license or permits necessary to perform our clinical trials, not performing our clinical trials on our anticipated schedule or employing methods consistent with the clinical trial protocol, cGCP requirements, or other third parties not performing data collection and analysis in a timely or accurate manner; ▪ inspections of clinical study sites by the FDA or IRBs finding regulatory violations that require us to undertake corrective action, result in suspension or termination of one or more sites or the imposition of a clinical hold on the entire study, or that prohibit us from using some or all of the data in support of our marketing applications; ▪ third-party contractors becoming debarred or suspended or otherwise penalized by the FDA or other government or regulatory authorities for violations of regulatory requirements, in which case we may need to find a substitute contractor, and we may not be able to use some or any of the data produced by such contractors in support of our marketing applications; ▪ one or more IRBs refusing to approve, suspending or terminating the study at an investigational site precluding enrollment of additional subjects, or withdrawing its approval of the trial; reaching agreement on acceptable terms with prospective CROs and clinical trial sites, the terms of which can be subject to extensive negotiation and may vary significantly among different CROs and trial sites; ▪ deviations of the clinical sites from trial protocols or dropping out of a trial; ▪ adding new clinical trial sites; ▪ the inability of the CRO to execute any clinical trials for any reason; ▪ government or regulatory delays or “clinical holds” requiring suspension or termination of a trial; and ▪ delays related to the impacts of COVID-19, including slowdowns in enrollment or our ability complete our clinical trials on our expected timeline.
The commencement and completion of clinical studies can be delayed for a number of reasons, including delays related to: • the FDA failing to grant permission to proceed and placing the clinical study on hold; • subjects failing to enroll or remain in our trials at the rate we expect; • a facility manufacturing any of our drug candidates being ordered by the FDA or other government or regulatory authorities to temporarily or permanently shut down due to violations of cGMP requirements or other applicable requirements, or cross-contaminations of product in the manufacturing process; • any changes to our manufacturing process that may be necessary or desired; • subjects choosing an alternative treatment for the indications for which we are developing our drug candidates, or participating in competing clinical studies; • subjects experiencing severe or unexpected drug-related adverse effects; • reports of similar technologies and products raising safety and/or efficacy concerns; • third-party clinical investigators losing their licenses or permits necessary to perform our clinical trials, not performing our clinical trials on our anticipated schedule or employing methods consistent with the clinical trial protocol, cGCP requirements, or other third parties not performing data collection and analysis in a timely or accurate manner; • inspections of clinical study sites by the FDA or IRBs finding regulatory violations that require us to undertake corrective action, result in suspension or termination of one or more sites or the imposition of a clinical hold on the entire study, or that prohibit us from using some or all of the data in support of our marketing applications; • third-party contractors becoming debarred or suspended or otherwise penalized by the FDA or other government or regulatory authorities for violations of regulatory requirements, in which case we may need to find a substitute contractor, and we may not be able to use some or any of the data produced by such contractors in support of our marketing applications; • one or more IRBs refusing to approve, suspending or terminating the study at an investigational site precluding enrollment of additional subjects, or withdrawing its approval of the trial; reaching agreement on acceptable terms with prospective CROs and clinical trial sites, the terms of which can be subject to extensive negotiation and may vary significantly among different CROs and trial sites; • deviations of the clinical sites from trial protocols or dropping out of a trial; • adding new clinical trial sites; • the inability of the CRO to execute any clinical trials for any reason; • government or regulatory delays or “clinical holds” requiring suspension or termination of a trial; and • delays related to the impacts of pandemics, including slowdowns in enrollment or our ability to complete our clinical trials on our expected timeline.
We also cannot guarantee that we will be able to enhance and optimize output in our commercial manufacturing process. If we cannot enhance and optimize output, we may not be able to reduce our costs over time. 31 There are risks associated with scaling up manufacturing to commercial scale.
We also cannot guarantee that we will be able to enhance and optimize output in our commercial manufacturing process. If we cannot enhance and optimize output, we may not be able to reduce our costs over time. There are risks associated with scaling up manufacturing to commercial scale.
An inactive market may also impair our ability to raise capital to continue to fund operations by selling shares and may impair our ability to acquire additional intellectual property assets by using our shares as consideration. We are currently listed on The Nasdaq Capital Market.
An inactive market may also impair our ability to raise capital to continue to fund operations by selling shares and may impair our ability to acquire additional intellectual property assets by using our shares as consideration. 49 We are currently listed on The Nasdaq Capital Market.
In addition, our board of directors could authorize the issuance of a series of preferred stock that has greater voting power than our common stock or that is convertible into our common stock, which could decrease the relative voting power of our common stock or result in dilution to our existing stockholders.
In addition, our Board of Directors could authorize the issuance of a series of preferred stock that has greater voting power than our common stock or that is convertible into our common stock, which could decrease the relative voting power of our common stock or result in dilution to our existing stockholders. 53
Because of the breadth of these laws and the narrowness of the safe harbors, it is possible that some of our business activities could be subject to challenge under one or more of these laws. The U.S.
Because of the breadth of these laws and the narrowness of the safe harbors, it is possible that some of our business activities could be subject to challenge under one or more of these laws. 36 The U.S.
In addition, the global macroeconomic environment could be negatively affected by, among other things, COVID-19 or other pandemics or epidemics, instability in global economic markets, increased U.S. trade tariffs and trade disputes with other countries, instability in the global credit markets, supply chain weaknesses, instability in the geopolitical environment as a result of the withdrawal of the United Kingdom from the European Union, the Russian invasion of Ukraine and other political tensions, and foreign governmental debt concerns.
In addition, the global macroeconomic environment could be negatively affected by, among other things, pandemics or epidemics, instability in global economic markets, increased U.S. trade tariffs and trade disputes with other countries, instability in the global credit markets, supply chain weaknesses, instability in the geopolitical environment as a result of the withdrawal of the United Kingdom from the European Union, the Russian invasion of Ukraine and other political tensions, and foreign governmental debt concerns.
Increasingly, third-party payors attempt to contain health care costs in ways that are likely to impact our development of products including: ▪ failing to approve or challenging the prices charged for health-care products; ▪ introducing reimportation schemes from lower priced jurisdictions; ▪ limiting both coverage and the amount of reimbursement for new therapeutic products; ▪ denying or limiting coverage for products that are approved by the regulatory agencies but are considered to be experimental or investigational by third-party payors; and ▪ refusing to provide coverage when an approved product is used in a way that has not received regulatory marketing approval. 34 Our collaboration partners are conducting and may intend to conduct additional clinical trials for certain of our drug candidates at sites outside the United States, and the FDA may not accept data from trials conducted in such locations or may require additional U.S.-based trials.
Increasingly, third-party payors attempt to contain health-care costs in ways that are likely to impact our development of products including: • failing to approve or challenging the prices charged for health-care products; • introducing reimportation schemes from lower priced jurisdictions; • limiting both coverage and the amount of reimbursement for new therapeutic products; • denying or limiting coverage for products that are approved by the regulatory agencies but are considered to be experimental or investigational by third-party payors; and • refusing to provide coverage when an approved product is used in a way that has not received regulatory marketing approval. 41 Our collaboration partners are conducting and may intend to conduct additional clinical trials for certain of our drug candidates at sites outside the U.S., and the FDA may not accept data from trials conducted in such locations or may require additional U.S.-based trials.
We have also outsourced elements of our information technology infrastructure, and as a result a number of third-party vendors may or could have access to our confidential information.
We have also outsourced our information technology infrastructure, and as a result a number of third-party vendors may or could have access to our confidential information.
Our research and testing programs must comply with drug approval requirements both in the United States and in other countries, since we are developing our drug candidates with the intention to, or could later decide to, commercialize them both in the U.S. and abroad. A product may fail for safety or effectiveness at any stage of the testing process.
Our research and testing programs must comply with drug approval requirements both in the U.S. and in other countries, since we are developing our drug candidates with the intention to, or could later decide to, commercialize them both in the U.S. and abroad. A product may fail for safety or effectiveness at any stage of the testing process.
Additionally, the market price of our common stock may decline further, and stockholders may lose some or all of their investment. The market price of our common stock may be significantly volatile.
Additionally, the market price of our common stock may decline further, and stockholders may lose some or all of their investment. 50 The market price of our common stock may be significantly volatile.
As a result, our financial results and the commercial prospects for our drug candidates would be harmed, our costs could increase and our ability to generate revenue could be delayed. 32 Any termination or suspension of or delays in the commencement or completion of any necessary studies of our drug candidates for any indications could result in increased costs to us, delay or limit our ability to generate revenue and adversely affect our commercial prospects.
As a result, our financial results and the commercial prospects for our drug candidates would be harmed, our costs could increase and our ability to generate revenue could be delayed. 39 Any termination or suspension of or delays in the commencement or completion of any necessary studies of our drug candidates for any indications could result in increased costs to us, delay or limit our ability to generate revenue and adversely affect our commercial prospects.
Pharmaceutical product development is a highly speculative undertaking, involves a substantial degree of risk and is a capital-intensive business. 21 Accordingly, you should consider our prospects in light of the costs, uncertainties, delays and difficulties frequently encountered by companies in the early stages of development, especially clinical pharmaceutical companies such as ours.
Pharmaceutical product development is a highly speculative undertaking, involves a substantial degree of risk and is a capital-intensive business. 26 Accordingly, you should consider our prospects in light of the costs, uncertainties, delays and difficulties frequently encountered by companies in the early stages of development, especially clinical pharmaceutical companies such as ours.
In addition, if one or more clinical studies are delayed, our competitors may be able to bring products to market before we do, and the commercial viability of our drug candidates could be significantly reduced. 33 We may not be able to obtain or maintain orphan drug designation or exclusivity for our product candidates.
In addition, if one or more clinical studies are delayed, our competitors may be able to bring products to market before we do, and the commercial viability of our drug candidates could be significantly reduced. 40 We may not be able to obtain or maintain orphan drug designation or exclusivity for our product candidates.
In addition, while these clinical trials are subject to applicable local laws, FDA acceptance of the data will be dependent upon its determination that the trials also comply with all applicable U.S. laws and regulations. There can be no assurance that the FDA will accept data from trials conducted outside of the United States.
In addition, while these clinical trials are subject to applicable local laws, FDA acceptance of the data will be dependent upon its determination that the trials also comply with all applicable U.S. laws and regulations. There can be no assurance that the FDA will accept data from trials conducted outside of the U.S.
Any of the foregoing scenarios could materially harm the commercial success of our drug candidates. 26 Even if we obtain marketing approval for our drug candidates, we will be subject to ongoing obligations and continued regulatory review, which may result in significant additional expense.
Any of the foregoing scenarios could materially harm the commercial success of our drug candidates. 32 Even if we obtain marketing approval for our drug candidates, we will be subject to ongoing obligations and continued regulatory review, which may result in significant additional expense.
Under this regulation, we have to report personal data breaches to the competent supervisory authority within 72 hours of the time we become aware of a breach "unless the personal data breach is unlikely to result in a risk to the right and freedoms of natural persons" (Article 33 of the GDPR).
Under this regulation, we must report personal data breaches to the competent supervisory authority within 72 hours of the time we become aware of a breach "unless the personal data breach is unlikely to result in a risk to the right and freedoms of natural persons" (Article 33 of the GDPR).
In the ordinary course of our business, we collect, store, and transmit large amounts of confidential information, including intellectual property, proprietary business information and personal information. It is critical that we do so in a secure manner to maintain the confidentiality and integrity of such confidential information.
In the ordinary course of our business, we collect, store, and transmit confidential information, including intellectual property, proprietary business information and personal information. It is critical that we do so in a secure manner to maintain the confidentiality and integrity of such confidential information.
Countries in which our drug candidates are expected to be sold through reimbursement schemes under national health insurance programs frequently require that manufacturers and sellers of pharmaceutical products obtain governmental approval of initial prices and any subsequent price increases. In certain countries, including the United States, government-funded and private medical care plans can exert significant indirect pressure on prices.
Countries in which our drug candidates are expected to be sold through reimbursement schemes under national health insurance programs frequently require that manufacturers and sellers of pharmaceutical products obtain governmental approval of initial prices and any subsequent price increases. In certain countries, including the U.S., government-funded and private medical care plans can exert significant indirect pressure on prices.
Even if we obtain United States regulatory approval of our drug candidates for an indication, the FDA may still impose significant restrictions on their indicated uses or marketing or the conditions of approval or impose ongoing requirements for potentially costly and time-consuming post-approval studies, including Phase 4 clinical trials, and post-market surveillance to monitor safety and efficacy.
Even if we obtain U.S. regulatory approval of our drug candidates for an indication, the FDA may still impose significant restrictions on their indicated uses or marketing or the conditions of approval or impose ongoing requirements for potentially costly and time-consuming post-approval studies, including Phase 4 clinical trials, and post-market surveillance to monitor safety and efficacy.
If we identify one or more material weaknesses in our internal controls, investors could lose confidence in the reliability of our financial statements, the market price of our stock could decline and we could be subject to sanctions or investigations by The Nasdaq Stock Market, the SEC or other regulatory authorities.
If we identify additional material weaknesses in our internal controls, investors could lose confidence in the reliability of our financial statements, the market price of our stock could decline and we could be subject to sanctions or investigations by The Nasdaq Stock Market, the SEC or other regulatory authorities.
Our collaboration partners are currently conducting and may intend in the future to conduct clinical trials outside the United States, particularly in China where CSPC is conducting a Phase 1 trial. Although the FDA may accept data from clinical trials conducted outside the United States, acceptance of these data is subject to certain conditions imposed by the FDA.
Our collaboration partners are currently conducting and may intend in the future to conduct clinical trials outside the U.S., particularly in China where CSPC is conducting a Phase 1 trial. Although the FDA may accept data from clinical trials conducted outside the U.S., acceptance of these data is subject to certain conditions imposed by the FDA.
In the United States and some foreign jurisdictions, there have been a number of legislative and regulatory changes and proposed changes regarding the healthcare system that could prevent or delay marketing approval for our drug candidates, restrict or regulate post-approval activities and affect our ability to profitably sell our drug candidates.
In the U.S. and some foreign jurisdictions, there have been a number of legislative and regulatory changes and proposed changes regarding the healthcare system that could prevent or delay marketing approval for our drug candidates, restrict or regulate post-approval activities and affect our ability to profitably sell our drug candidates.
If the FDA does not accept the data from our clinical trials conducted outside the United States, it would likely result in the need for additional clinical trials, which would be costly and time-consuming and delay or permanently halt our ability to develop and market these or other drug candidates in the United States.
If the FDA does not accept the data from our clinical trials conducted outside the U.S., it would likely result in the need for additional clinical trials, which would be costly and time-consuming and delay or permanently halt our ability to develop and market these or other drug candidates in the U.S.
If we were to challenge the validity of these or any issued United States patent in court, we would need to overcome a statutory presumption of validity that attaches to every issued United States patent. This means that, in order to prevail, we would have to present clear and convincing evidence as to the invalidity of the patent’s claims.
If we were to challenge the validity of these or any issued U.S. patent in court, we would need to overcome a statutory presumption of validity that attaches to every issued U.S. patent. This means that, in order to prevail, we would have to present clear and convincing evidence as to the invalidity of the patent’s claims.
Under the Orphan Drug Act, the FDA may grant orphan drug designation to a drug intended to treat a rare disease or condition, which is generally a disease or condition that affects fewer than 200,000 individuals in the United States and for which there is no reasonable expectation that the cost of developing and making a drug available in the Unites States for this type of disease or condition will be recovered from sales of the product.
Under the Orphan Drug Act, the FDA may grant orphan drug designation to a drug intended to treat a rare disease or condition, which is generally a disease or condition that affects fewer than 200,000 individuals in the U.S. and for which there is no reasonable expectation that the cost of developing and making a drug available in the U.S. for this type of disease or condition will be recovered from sales of the product.
Even if we are successful in defending against such claims, litigation could result in substantial costs and be a distraction to management and other employees. General Company-Related Risks We will need to grow the size of our organization, and we may experience difficulties in managing this growth. As of December 31, 2022, we had 33 full-time employees.
Even if we are successful in defending against such claims, litigation could result in substantial costs and be a distraction to management and other employees. 45 General Company-Related Risks We will need to grow the size of our organization, and we may experience difficulties in managing this growth. As of December 31, 2023, we had 19 full-time employees.
The research, testing, manufacturing, labeling, packaging, storage, approval, sale, marketing, advertising and promotion, pricing, export, import and distribution of drug products are subject to extensive regulation by the FDA and other regulatory authorities in the United States and other countries, which regulations differ from country to country.
The research, testing, manufacturing, labeling, packaging, storage, approval, sale, marketing, advertising and promotion, pricing, export, import and distribution of drug products are subject to extensive regulation by the FDA and other regulatory authorities in the U.S. and other countries, which regulations differ from country to country.
In the United States, the FDA generally requires the completion of pre-clinical and clinical trials of each drug to establish its safety and efficacy and extensive pharmaceutical development to ensure its quality before an NDA or BLA is approved. Regulatory authorities in other jurisdictions impose similar requirements.
In the U.S., the FDA generally requires the completion of pre-clinical and clinical trials of each drug to establish its safety and efficacy and extensive pharmaceutical development to ensure its quality before an NDA or BLA is approved. Regulatory authorities in other jurisdictions impose similar requirements.
The process of identifying collaborators and negotiating collaboration agreements for the licensing, development, and ultimate commercialization of some of our drug candidates may cause delays and increased costs. We may not be able to enter into collaboration agreements on terms favorable to us or at all.
We may enter into co-development and commercialization partnerships for our drug candidates where appropriate. The process of identifying collaborators and negotiating collaboration agreements for the licensing, development, and ultimate commercialization of some of our drug candidates may cause delays and increased costs. We may not be able to enter into collaboration agreements on terms favorable to us or at all.
The law also contains substantial provisions affecting fraud and abuse compliance and transparency, which may require us to modify our business practices with healthcare practitioners and incur substantial costs to ensure compliance. In addition, other legislative changes that affect the pharmaceutical industry have been proposed and adopted in the United States since the ACA was enacted.
The law also contains substantial provisions affecting fraud and abuse compliance and transparency, which may require us to modify our business practices with healthcare practitioners and incur substantial costs to ensure compliance. 35 In addition, other legislative changes that affect the pharmaceutical industry have been proposed and adopted in the U.S. since the ACA was enacted.
Our future growth depends, in part, on our ability to enter into and succeed in markets outside of the United States, where we may choose to rely on third party collaborations and will be subject to additional regulatory and commercial burdens, risks and other uncertainties.
Our future growth depends, in part, on our ability to enter into and succeed in markets outside of the U.S., where we may choose to rely on third-party collaborations and will be subject to additional regulatory and commercial burdens, risks and other uncertainties.
We are not permitted to market any of our drug candidates as prescription pharmaceutical products in the United States until we receive approval of an NDA or BLA from the FDA or in foreign markets until we receive the requisite approval from comparable regulatory authorities in such countries.
We are not permitted to market any of our drug candidates as prescription pharmaceutical products in the U.S. until we receive approval of an NDA or BLA from the FDA or in foreign markets until we receive the requisite approval from comparable regulatory authorities in such countries.
We have limited experience contracting third parties to manufacture monoclonal antibodies and do not control the manufacturing processes of, and are completely dependent on, our two contract manufacturing partners for compliance with cGMPs for manufacture of all active drug substances and finished drug products.
We have limited experience contracting third parties to manufacture our drug candidates and we do not control the manufacturing processes of, and are completely dependent on, our contract manufacturing partners for compliance with cGMPs for manufacture of all active drug substances and finished drug products.
We are dependent on our licensing partner, CSPC, to manufacture antibody drug conjugates and we do not have control over their chemistry, manufacturing, and control strategy for CRB-701 to ensure successful development and supply of drug to commence clinical studies.
We are dependent on our licensing partner, CSPC, to manufacture antibody drug conjugates and we do not have control over their chemistry, manufacturing, and control strategy for CRB-701 to ensure successful development and supply of drug to commence clinical studies or support commercial demand.
Our pending patent applications may never be approved by United States or foreign patent offices and the existing patents and patent applications relating to our product candidates may be challenged, invalidated, or circumvented by third parties and may not protect us against competitors with similar products or technologies.
Our pending patent applications may never be approved by U.S. or foreign patent offices and the existing patents and patent applications relating to our product candidates may be challenged, invalidated, or circumvented by third parties and may not protect us against competitors with similar products or technologies.
If we were to challenge the validity of these or any issued United States patent in an administrative trial before the Patent Trial and Appeal Board in the United States Patent and Trademark Office, we would have to prove that the claims are unpatentable by a preponderance of the evidence.
If we were to challenge the validity of these or any issued U.S. patent in an administrative trial before the Patent Trial and Appeal Board in the U.S. Patent and Trademark Office, we would have to prove that the claims are unpatentable by a preponderance of the evidence.
We cannot be certain that any patents or patent application owned by a third party will not have priority over patents and patent applications filed by us, or that we will not be involved in interference, opposition or invalidity proceedings before United States or foreign patent offices.
We cannot be certain that any patents or patent application owned by a third party will not have priority over patents and patent applications filed by us, or that we will not be involved in interference, opposition or invalidity proceedings before U.S. or foreign patent offices.
We may seek orphan drug designation in the United States and in the European Union for our product candidates. Upon receipt of regulatory approval, orphan drug status will provide us with seven years of market exclusivity in the United States under the Orphan Drug Act.
We may seek orphan drug designation in the U.S. and in the European Union for our product candidates. Upon receipt of regulatory approval, orphan drug status will provide us with seven years of market exclusivity in the U.S. under the Orphan Drug Act.
In addition, manufacturers of drug products and their facilities are subject to continual review and periodic inspections by the FDA and other regulatory authorities for compliance with current Good Manufacturing Practices, or cGMP, requirements relating to quality control, quality assurance and corresponding maintenance of records and documents.
In addition, manufacturers of drug products and their facilities are subject to continual review and periodic inspections by the FDA and other regulatory authorities for compliance with cGMP requirements relating to quality control, quality assurance and corresponding maintenance of records and documents.
In the United States, under the Medicare Modernization Act, or MMA, Medicare Part D provides coverage to the elderly and disabled for outpatient prescription drugs by approving and subsidizing prescription drug plans offered by private insurers.
In the U.S., under the Medicare Modernization Act, or MMA, Medicare Part D provides coverage to the elderly and disabled for outpatient prescription drugs by approving and subsidizing prescription drug plans offered by private insurers.
Receipt of necessary regulatory approval is subject to a number of risks, including the following: ▪ pre-clinical testing may not yield results that justify progressing to clinical testing; ▪ the FDA or comparable foreign regulatory authorities or institutional review boards, or IRBs, may disagree with the design or implementation of our clinical trials; ▪ we may not be able to provide acceptable evidence of the safety and efficacy of our drug candidates; ▪ the results of our clinical trials may not be satisfactory or may not meet the level of statistical or clinical significance required by the FDA, the European Medicines Agency, or EMA, or other comparable foreign regulatory authorities for marketing approval; ▪ the dosing of our drug candidates in a particular clinical trial may not be at an optimal level; ▪ patients in our clinical trials may suffer adverse effects for reasons that may or may not be related to our drug candidates; ▪ the data collected from clinical trials may not be sufficient to support the submission of an NDA, BLA, or other submission or to obtain regulatory approval in the United States or elsewhere; ▪ the FDA or comparable foreign regulatory authorities may fail to approve the manufacturing processes or facilities of third-party manufacturers with which we contract for clinical and commercial supplies; ▪ the approval policies or regulations of the FDA or comparable foreign regulatory authorities may significantly change in a manner rendering our clinical data insufficient for approval; and ▪ the FDA or comparable foreign regulatory authorities may decide that the clinical trial endpoints we have chosen, the statistical analysis plans that we use, or any other parameter that we rely on to show the safety and efficacy of our drugs, are not parameters that can be used to support approval of our products.
Receipt of necessary regulatory approval is subject to a number of risks, including the following: • pre-clinical testing may not yield results that justify progressing to clinical testing; • the FDA or comparable foreign regulatory authorities or institutional review boards, or IRBs, may disagree with the design or implementation of our clinical trials; • we may not be able to provide acceptable evidence of the safety and efficacy of our drug candidates; • the results of our clinical trials may not be satisfactory or may not meet the level of statistical or clinical significance required by the FDA, the European Medicines Agency, or EMA, or other comparable foreign regulatory authorities for marketing approval; • the dosing of our drug candidates in a particular clinical trial may not be at an optimal level; • patients in our clinical trials may suffer adverse effects for reasons that may or may not be related to our drug candidates; • the data collected from clinical trials may not be sufficient to support the submission of an NDA, BLA, or other submission or to obtain regulatory approval in the U.S. or elsewhere; • the FDA or comparable foreign regulatory authorities may fail to approve the manufacturing processes or facilities of third-party manufacturers with which we contract for clinical and commercial supplies; • the approval policies or regulations of the FDA or comparable foreign regulatory authorities may significantly change in a manner rendering our clinical data insufficient for approval; and • the FDA or comparable foreign regulatory authorities may decide that the clinical trial endpoints we have chosen, the statistical analysis plans that we use, or any other parameter that we rely on to show the safety and efficacy of our drugs, are not parameters that can be used to support approval of our products. 29 Failure to obtain regulatory approval for any of our drug candidates for the foregoing or any other reasons will prevent us from commercializing such product candidate as a prescription product, and our ability to generate revenue will be materially impaired.
Generally, the patient population for any clinical trial conducted outside of the United States must be representative of the population for which we intend to seek approval in the United States.
Generally, the patient population for any clinical trial conducted outside of the U.S. must be representative of the population for which we intend to seek approval in the U.S.
We intend to obtain product liability insurance covering our clinical trials. Although we will maintain such insurance, any claim that may be brought against us could result in a court judgment or settlement in an amount that is not covered, in whole or in part, by our insurance or that is in excess of the limits of our insurance coverage.
Although we will maintain such insurance, any claim that may be brought against us could result in a court judgment or settlement in an amount that is not covered, in whole or in part, by our insurance or that is in excess of the limits of our insurance coverage.
We are currently operating at a loss and expect our operating costs will increase significantly as we incur further costs related to pre-clinical development and the clinical trials for our drug candidates. As of December 31, 2022, we held cash, cash equivalents, and investments of approximately $59.2 million.
We are currently operating at a loss and expect our operating costs will increase significantly as we incur further costs related to pre-clinical development and the clinical trials for our drug candidates. As of December 31, 2023, we held cash, cash equivalents, and investments of approximately $20,906,000.
In addition, the loss of the services of certain key employees, including Yuval Cohen, our Chief Executive Officer, Rachael Brake, our Chief Scientific Officer, and Sean Moran, our Chief Financial Officer would adversely impact our business prospects.
In addition, the loss of the services of certain key employees, including Yuval Cohen, our Chief Executive Officer, Sean Moran, our Chief Financial Officer, and Dominic Smethurst, our Chief Medical Officer, would adversely impact our business prospects.
In particular, we believe that the loss of the services of Yuval Cohen, Ph.D., our Chief Executive Officer, Rachael Brake, Ph.D., our Chief Scientific Officer, and Sean Moran, C.P.A., M.B.A., our Chief Financial Officer, would have a material adverse effect on our business.
In particular, we believe that the loss of the services of Yuval Cohen, Ph.D., our Chief Executive Officer, Sean Moran, C.P.A., M.B.A., our Chief Financial Officer, and Dominic Smethurst, MA MRCP, our Chief Medical Officer, would have a material adverse effect on our business.
The exercise of such outstanding options and warrants will result in further dilution of your investment.
The exercise of such outstanding options and warrants and vesting of restricted stock units will result in further dilution of your investment.
With respect to sales and marketing activities by us or any future partner, advertising and promotional materials must comply with FDA rules in addition to other applicable federal, state and local laws in the United States and similar legal requirements in other countries.
With respect to sales and marketing activities by us or any future partner, advertising and promotional materials must comply with FDA rules in addition to other applicable federal, state and local laws in the U.S. and similar legal requirements in other countries. In the U.S., the distribution of product samples to physicians must comply with the requirements of the U.S.
On July 28, 2020, we entered into a Loan and Security Agreement (“the Loan and Security Agreement”) with our subsidiary, Corbus Pharmaceuticals, Inc., as borrower, us, as guarantor, and each lender party thereto (the “Lenders”), K2 HealthVentures LLC, an unrelated third party, as administrative agent for the Lenders, and Ankura Trust Company, LLC, an unrelated third party, as collateral agent for the Lenders, pursuant to which K2HV may provide us with term loans in an aggregate principal amount of up to $50,000,000.
On July 28, 2020, we entered into a Loan and Security Agreement (“the Loan and Security Agreement”) with our subsidiary, Corbus Pharmaceuticals, Inc., as borrower, us, as guarantor, and each lender party thereto (the “Lenders”), K2 HealthVentures LLC ("“K2HV"), an unrelated third party, as administrative agent for the Lenders, and Ankura Trust Company, LLC, an unrelated third party, as collateral agent for the Lenders, pursuant to which K2HV provided us with a term loan of $20,000,000 upon signing.
If we fail to maintain or obtain additional patent protection or trade secret protection for our product candidates or our technologies, third parties could use our proprietary information, which could impair our ability to compete in the market and adversely affect our ability to generate revenues and attain profitability.
Moreover, our competitors may independently develop equivalent knowledge, methods, and know-how. 42 If we fail to maintain or obtain additional patent protection or trade secret protection for our product candidates or our technologies, third parties could use our proprietary information, which could impair our ability to compete in the market and adversely affect our ability to generate revenues and attain profitability.
As a result, if we earn net taxable income, our ability to use our pre-change net operating loss carryforwards and other tax attributes to offset United States federal taxable income may be subject to limitations, which could potentially result in increased future tax liability to us. 46 Legislation or other changes in U.S. tax law could adversely affect our business and financial condition.
As a result, if we earn net taxable income, our ability to use our pre-change net operating loss carryforwards and other tax attributes to offset U.S. federal taxable income may be subject to limitations, which could potentially result in increased future tax liability to us.
We expect that we will rely on third parties to assist us in conducting clinical trials for our drug candidates. If these third parties do not successfully carry out their contractual duties or meet expected deadlines, we may not be able to obtain regulatory approval for or commercialize our drug candidates and our business would be substantially harmed.
If these third parties do not successfully carry out their contractual duties or meet expected deadlines, we may not be able to obtain regulatory approval for or commercialize our drug candidates and our business would be substantially harmed.
In addition, there are risks inherent in conducting clinical trials in jurisdictions outside the United States including: • regulatory and administrative requirements of the jurisdiction where the trial is conducted that could burden or limit our ability to conduct clinical trials; • foreign exchange fluctuations; • manufacturing, customs, shipment and storage requirements; • cultural differences in medical practice and clinical research; and • the risk that patient populations in such trials are not considered representative as compared to patient populations in the United States and other markets. 35 Risks Relating to Our Intellectual Property Rights It is difficult and costly to protect our intellectual property rights, and we cannot ensure the protection of these rights.
In addition, there are risks inherent in conducting clinical trials in jurisdictions outside the U.S. including: • regulatory and administrative requirements of the jurisdiction where the trial is conducted that could burden or limit our ability to conduct clinical trials; • foreign exchange fluctuations; • manufacturing, customs, shipment and storage requirements; • cultural differences in medical practice and clinical research; and • the risk that patient populations in such trials are not considered representative as compared to patient populations in the U.S. and other markets.
As a result, we will be obligated to rely on contract manufacturers if and when our drug candidates are approved for commercialization. 30 We currently rely on a single contract supplier for manufacturing monoclonal antibodies.
As a result, we will be obligated to rely on contract manufacturers if and when our drug candidates are approved for commercialization. We currently rely on contract suppliers for the manufacturing of our drug candidates.
There can be no assurance that we will continue to maintain compliance with the Minimum Bid Price Requirement or maintain compliance with the other Nasdaq listing requirements.
There can be no assurance that we will continue to maintain compliance with the Minimum Stockholders' Equity Rule, the Minimum Market Value Requirement, or other Nasdaq listing requirements.
There can be no assurance that we will have available assets to pay to the holders of common stock, or any amounts, upon such a liquidation, dissolution or winding-up of our Company. In this event, you could lose some or all of your investment.
There can be no assurance that we will have available assets to pay to the holders of common stock, or any amounts, upon such a liquidation, dissolution or winding-up of our Company.
Our ability to use our net operating loss carryforwards and certain other tax attributes may be limited. We have incurred substantial losses during our history and do not expect to become profitable in the near future, and we may never achieve profitability.
In this event, you could lose some or all of your investment. 52 Our ability to use our net operating loss carryforwards and certain other tax attributes may be limited. We have incurred substantial losses during our history and do not expect to become profitable in the near future, and we may never achieve profitability.
Global conditions, dislocations in the financial markets, any negative financial impacts affecting United States as a result of tax reform or changes to existing trade agreements or tax conventions, may adversely impact our business.
Adverse global conditions, including economic uncertainty, may negatively impact our financial results. Global conditions, dislocations in the financial markets, any negative financial impacts affecting U.S. as a result of tax reform or changes to existing trade agreements or tax conventions, may adversely impact our business.
In all cases, we must show that a drug candidate is both safe and effective before the FDA, or drug approval agencies of other countries where we intend to sell the product, will approve it for sale.
Any future clinical trial results for our drug candidates may not be successful. 30 In all cases, we must show that a drug candidate is both safe and effective before the FDA, or drug approval agencies of other countries where we intend to sell the product, will approve it for sale.
Regardless of the merits or eventual outcome, liability claims may result in: • decreased demand for our drug candidates; • injury to our reputation; • withdrawal of clinical trial participants; • costs to defend the related litigation; • a diversion of management’s time and our resources; • substantial monetary awards to trial participants or patients; • product recalls, withdrawals or labeling, marketing or promotional restrictions; • the inability to commercialize our drug candidates; and • a decline in the value of our stock. 40 Our inability to obtain and retain sufficient product liability insurance at an acceptable cost to protect against potential product liability claims could prevent or inhibit the commercialization of products we develop.
Regardless of the merits or eventual outcome, liability claims may result in: • decreased demand for our drug candidates; • injury to our reputation; • withdrawal of clinical trial participants; • costs to defend the related litigation; • a diversion of management’s time and our resources; • substantial monetary awards to trial participants or patients; • product recalls, withdrawals or labeling, marketing or promotional restrictions; • the inability to commercialize our drug candidates; and • a decline in the value of our stock.
Such factors may include: • instability in political or economic conditions, such as inflation, recession, foreign currency exchange restrictions and devaluations, restrictive governmental controls on the movement and repatriation of earnings and capital, and actual or anticipated military or political conflicts, particularly in emerging markets; • expanded jurisdiction of the Committee for Foreign Investment in the United States (CFIUS); and • intergovernmental conflicts or actions, such as armed conflict, trade wars, retaliatory tariffs, and acts of terrorism or war.
Such factors may include: • instability in political or economic conditions, such as inflation, recession, foreign currency exchange restrictions and devaluations, restrictive governmental controls on the movement and repatriation of earnings and capital, and actual or anticipated military or political conflicts, particularly in emerging markets; • expanded jurisdiction of the Committee for Foreign Investment in the U.S.
A number of companies in the pharmaceutical industry have suffered significant setbacks in advanced clinical trials due to lack of efficacy or adverse safety profiles, notwithstanding promising results in earlier trials. Any future clinical trial results for our drug candidates may not be successful.
A number of companies in the pharmaceutical industry have suffered significant setbacks in advanced clinical trials due to lack of efficacy or adverse safety profiles, notwithstanding promising results in earlier trials.
If our manufacturers are unable to produce sufficient quantities of approved products for commercialization, either on a timely basis or at all, our commercialization efforts would be impaired, which would have a material adverse effect on our business, financial condition, results of operations and growth prospects.
If our manufacturers are unable to produce sufficient quantities of approved products for commercialization, either on a timely basis or at all, our commercialization efforts would be impaired, which would have a material adverse effect on our business, financial condition, results of operations and growth prospects. 38 We expect that we will rely on third parties to assist us in conducting clinical trials for our drug candidates.
The market price for our common stock may be volatile and subject to wide fluctuations in response to factors including the following: • actual or anticipated fluctuations in our quarterly or annual operating results; • changes in financial or operational estimates or projections; • conditions in markets generally; • changes in the economic performance or market valuations of companies similar to ours; and • general economic or political conditions in the United States or elsewhere. 44 In particular, the market prices of biotechnology companies like ours have been highly volatile due to factors, including, but not limited to: • any delay or failure to conduct a clinical trial for our product or receive approval from the FDA and other regulatory agencies; • developments or disputes concerning a company’s intellectual property rights; • technological innovations of such companies or their competitors; • changes in market valuations of similar companies; • announcements by such companies or their competitors of significant contracts, acquisitions, strategic partnerships, joint ventures, capital commitments, new technologies, or patents; and • failure to complete significant transactions or collaborate with vendors in manufacturing a product.
In particular, the market prices of biotechnology companies like ours have been highly volatile due to factors, including, but not limited to: • any delay or failure to conduct a clinical trial for our product or receive approval from the FDA and other regulatory agencies; • developments or disputes concerning a company’s intellectual property rights; • technological innovations of such companies or their competitors; • changes in market valuations of similar companies; • announcements by such companies or their competitors of significant contracts, acquisitions, strategic partnerships, joint ventures, capital commitments, new technologies, or patents; and • failure to complete significant transactions or collaborate with vendors in manufacturing a product.
We are a party to license agreements with Jenrin, The Regents, and Milky Way BioPharma, LLC (“Milky Way”) pursuant to which we licensed exclusive worldwide rights to develop, manufacture and market drug candidates. These agreements are important to our business, and we may enter into additional license agreements in the future.
We are a party to license agreements with Jenrin, The Regents, and Milky Way BioPharma, LLC (“Milky Way”) pursuant to which we licensed exclusive worldwide rights to develop, manufacture and market drug candidates. We may enter into additional license agreements in the future. Certain of our in-licensed intellectual property covers, or may cover, potential cannabinoid and monoclonal antibody developmental candidates.
We are, and may become, subject to claims that we or our employees have wrongfully used or disclosed alleged confidential information or trade secrets that, regardless of merit, could result in significant expense and loss of our intellectual property rights.
Even if we are successful in defending against these claims, litigation could result in substantial costs and be a distraction to management. 44 We are, and may become, subject to claims that we or our employees have wrongfully used or disclosed alleged confidential information or trade secrets that, regardless of merit, could result in significant expense and loss of our intellectual property rights.
We have limited experience contracting with third parties to manufacture monoclonal antibodies and will need to be able to successfully scale up and produce a batch of CRB-601 to commence clinical studies.
We have limited experience contracting with third parties to manufacture drug candidates and will need to be able to successfully scale up and produce batches of our drug candidates to commence clinical studies.
As a result of these events, our ability to obtain data or regulatory support from our China-based licensing partner may be limited or adversely affected, and we may ourselves be subject to sanctions, diminished public perception and operational constraints.
(CFIUS); and • intergovernmental conflicts or actions, such as armed conflict, trade wars, retaliatory tariffs, and acts of terrorism or war. 48 As a result of these events, our ability to obtain data or regulatory support from our China-based licensing partner may be limited or adversely affected, and we may ourselves be subject to sanctions, diminished public perception and operational constraints.
If, for any reason, these third parties are unable or unwilling to perform, we may not be able to terminate our agreements with them, and we may not be able to locate alternative manufacturers or formulators or enter into favorable agreements with them and we cannot be certain that any such third parties will have the manufacturing capacity to meet future requirements.
Failure by our contract manufacturers to comply with or maintain any of these standards could adversely affect our ability to develop, obtain regulatory approval for or market our drug candidates. 37 If, for any reason, these third parties are unable or unwilling to perform, we may not be able to terminate our agreements with them, and we may not be able to locate alternative manufacturers or formulators or enter into favorable agreements with them and we cannot be certain that any such third parties will have the manufacturing capacity to meet future requirements.
Our current business currently depends on the successful development, regulatory approval, and commercialization of our pre-clinical drug candidates, which may never occur. CRB-701 is currently in a Phase 1 clinical trial being conducted by CSPC in China. We are completing pre-clinical testing for CRB-601 in the U.S. and we expect to file an IND in 2023.
Our current business currently depends on the successful development, regulatory approval, and commercialization of our pre-clinical drug candidates, which may never occur. 28 CRB-701 is currently in a Phase 1 clinical trial being conducted by CSPC in China. The FDA cleared our IND for CRB-601 on January 9, 2024.
In such cases, we will depend greatly on our third-party collaborators to license, develop and commercialize such drug candidates, and they may not meet our expectations. We may enter into co-development and commercialization partnerships for our drug candidates where appropriate.
We have entered into, and may in the future enter into, collaboration agreements for the licensing, development, and ultimate commercialization of some of our drug candidates. In such cases, we will depend greatly on our third-party collaborators to license, develop and commercialize such drug candidates, and they may not meet our expectations.
If there is any conflict, dispute, disagreement or issue of non-performance between us and our licensing partners regarding our rights or obligations under the license agreements, including any such conflict, dispute or disagreement arising from our failure to satisfy payment obligations under any such agreement, we may owe damages, our licensor may have a right to terminate the affected license, and our ability to utilize the affected intellectual property in our product discovery and development efforts and our ability to enter into collaboration or marketing agreements for an affected product candidate may be adversely affected. 36 We are a party to a license agreement with CSPC pursuant to which we licensed the exclusive rights in the United States, Canada, the European Union (including the European Free Trade Area), the United Kingdom, and Australia to develop and market a drug candidate from CSPC.
If there is any conflict, dispute, disagreement or issue of non-performance between us and our licensing partners regarding our rights or obligations under the license agreements, including any such conflict, dispute or disagreement arising from our failure to satisfy payment obligations under any such agreement, we may owe damages, our licensor may have a right to terminate the affected license, and our ability to utilize the affected intellectual property in our product discovery and development efforts and our ability to enter into collaboration or marketing agreements for an affected product candidate may be adversely affected. 43 Our product candidates may infringe the intellectual property rights of others, which could increase our costs and delay or prevent our development and commercialization efforts.

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Item 2. Properties

Properties — owned and leased real estate

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Biggest changeEffective August 26, 2021, the Company entered into a sublease agreement with a third party to sublease 12,112 square feet of the first floor. The sublease term ends on October 31, 2026.
Biggest changeEffective August 26, 2021, we entered into a sublease agreement with a third party to sublease 12,112 square feet of the first floor. The sublease term is scheduled to end on October 31, 2026, however, we are in the process of terminating the sublease.
Item 2. PROPERTIES Our principal offices are located at 500 River Ridge Drive, Norwood, MA 02062 and consists of 63,256 square feet of leased office space at December 31, 2022. The lease term for this office space ends on November 30, 2026.
Item 2. PROPERTIES Our principal offices are located at 500 River Ridge Drive, Norwood, MA 02062 and consists of 63,256 square feet of leased office space at December 31, 2023. The lease term for this office space ends on November 30, 2026.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeThe payment of cash dividends if any, on the common stock will rest solely within the discretion of our board of directors and will depend, among other things, upon our earnings, capital requirements, financial condition, and other relevant factors. Record Holders As of March 3, 2023 there are approximately 86 record holders of shares of our common stock.
Biggest changeThe payment of cash dividends, if any, on the common stock will rest solely within the discretion of our Board of Directors and will depend, among other things, upon our earnings, capital requirements, financial condition, and other relevant factors. Record Holders As of March 8, 2024 there are approximately 87 record holders of shares of our common stock.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeOf our total cash, cash equivalents, investments, and restricted cash of $59,867,000 at December 31, 2022, $57,062,000 was held within the United States. 54 Net cash used in operating activities for the year ended December 31, 2022 was approximately $37,544,000 which includes a net loss of approximately $42,347,000, adjusted for non-cash expenses of approximately $8,826,000, principally related to stock-based compensation expense of $5,720,000, depreciation and amortization expense of $763,000, amortization of debt discount of $742,000, operating lease right of use asset amortization of $725,000, and loss on foreign exchange of $649,000, and approximately $4,024,000 of cash used by net working capital items, principally related to the decreases in accrued expenses of $4,094,000 and operating lease liabilities of $1,136,000.
Biggest changeNet cash used in operating activities for the year ended December 31, 2023 was approximately $36,100,000 which includes a net loss of approximately $44,603,000, adjusted for non-cash expenses of approximately $4,409,000, principally related to stock-based compensation expense of $3,470,000, amortization of debt discount of $824,000, depreciation and amortization expense of $641,000, and net amortization on discount of investments of $506,000, and approximately $4,094,000 of cash used by net working capital items, principally related to the increases in accrued expenses of $5,031,000 and accounts payable of $1,028,000 and a decrease in operating lease right-of-use asset amortization of $821,000 offset by an increase in prepaid expenses of $1,470,000 and a decrease in operating lease liabilities of $1,281,000.
Examples of estimated research and development expenses that we accrue include: • fees paid to CROs and research institutions in connection with pre-clinical studies; • fees paid to contract manufacturers in connection with the production of drugs for studies and clinical trials; • fees paid to CROs and research institutions in connection with conducting of clinical studies; and • professional service fees for consulting and related services.
Examples of estimated research and development expenses that we accrue include: • fees paid to CROs and research institutions in connection with pre-clinical studies; • fees paid to contract manufacturers in connection with the production of drugs for studies and clinical trials; • fees paid to CROs and research institutions in connection with conducting clinical studies; and • professional service fees for consulting and related services.
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.
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 and product-by-product basis upon the expiration of the royalty term for such product in such country.
We expect to continue to incur operating losses for at least the next several years in connection with our ongoing activities, as we: • conduct pre-clinical and clinical trials for our product candidates; • continue our research and development efforts; and • manufacture drugs for clinical studies.
We expect to continue to incur operating losses for at least the next several years in connection with our ongoing activities, as we: • conduct pre-clinical and clinical trials for our product candidates; • continue our research and development efforts; and • manufacture and purchase drugs for clinical studies.
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.
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 us with advance notice and termination upon a party’s insolvency or bankruptcy.
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.
The CSPC 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.
We expect other income (expense), net to increase in 2023 due to the receipt of the current year refundable research and development credits along with the application and receipt of next year's refundable research and development credits. Liquidity and Capital Resources Since inception, we have experienced negative cash flows from operations.
We expect other income (expense), net to increase in 2024 due to the receipt of the current year refundable research and development credits along with the application and receipt of next year's refundable research and development credits. 60 Liquidity and Capital Resources Since inception, we have experienced negative cash flows from operations.
The UCSF 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. 56 License Agreement with CSPC Pursuant to the terms of the CSPC License Agreement, we are obligated to pay potential milestone payments to CSPC totaling up to $130 million based upon the achievement of specified development and regulatory milestones and $555 million in potential commercial milestone payments.
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. 62 License Agreement with CSPC Pursuant to the terms of the CSPC License Agreement, we are obligated to pay potential milestone payments to CSPC totaling up to $130 million based upon the achievement of specified development and regulatory milestones and $555 million in potential commercial milestone payments.
In addition to refundable research and development tax credits that were earned on certain research and development expenses incurred primarily outside of the United States, other income (expense), net consists of interest income we earn on interest-bearing accounts, realized investment gains and losses, interest expense incurred on our outstanding debt, changes in derivative liabilities, and realized and unrealized foreign currency exchange gains and losses.
In addition to refundable research and development tax credits that were earned on certain research and development expenses incurred primarily outside of the U.S., other income (expense), net consists of interest income we earn on interest-bearing accounts, realized investment gains and losses, interest expense incurred on our outstanding debt, changes in derivative liabilities, and realized and unrealized foreign currency exchange gains and losses.
Contractual Obligations and Commitments Our contractual obligations as of December 31, 2022 consists of our amended lease agreement (“February 2019 Lease Agreement”) for an aggregate total of 62,756 square feet of leased office space (“Total Premises”) through November 30, 2026.
Contractual Obligations and Commitments Our contractual obligations as of December 31, 2023 consist of our amended lease agreement (“February 2019 Lease Agreement”) for an aggregate total of 62,756 square feet of leased office space (“Total Premises”) through November 30, 2026.
As of December 31, 2022, other than our leases, we had no material Contractual Obligations or Commitments that will affect our future liquidity. 55 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 development award agreements discussed as follows: License Agreement with Jenrin Pursuant to the terms of the Jenrin License Agreement, 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.
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 development award agreements discussed as follows: License Agreement with Jenrin Pursuant to the terms of the Jenrin License Agreement, 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 pre-clinical models, CRB-601 demonstrates enhanced anti-tumor activity when combined with anti-PD-1 checkpoint inhibitor therapy compared to either single agent alone. Pre-clinical data suggests that blockade of latent TGFβ production by CRB-601 can lead to changes in immune cell infiltration in the tumor microenvironment, potentially enhancing the benefit of PD-1 blockade.
In pre-clinical models, CRB-601 demonstrates enhanced anti-tumor activity when combined with an anti-PD-1 checkpoint inhibitor compared to each single agent on its own. The data suggests that blockade of latent TGFβ production by CRB-601 can lead to changes in immune cell infiltration in the tumor microenvironment thus potentially enhancing the benefit of PD-1 blockade.
The Company has subleased a portion of its leased facility under an agreement considered to be an operating lease according to GAAP. The Company has not been legally released from its primary obligations under the original lease and therefore it continues to account for the original lease as it did before commencement of the sublease.
We have subleased a portion of our leased facility under an agreement considered to be an operating lease according to U.S. GAAP. We have not been legally released from our primary obligations under the original lease and therefore it continues to account for the original lease as it did before commencement of the sublease.
Total rent expense for the year ended December 31, 2022 was $1,652,563 and we do not expect any significant changes in future periods. In addition, the Company entered into a sublease agreement with a third party to sublease 12,112 square feet of our leased space. The sublease commenced on October 1, 2021 and ends October 31, 2026.
Total rent expense for the year ended December 31, 2023 was $1,700,005 and we do not expect any significant changes in future periods. In addition, we entered into a sublease agreement with a third party to sublease 12,112 square feet of our leased space. The sublease commenced on October 1, 2021 and was contracted to end October 31, 2026.
We have never been profitable and at December 31, 2022, we had an accumulated deficit of approximately $392,081,000. Our net losses for the years ended December 31, 2022 and December 31, 2021 were approximately $42,347,000 and $45,640,000, respectively. We expect to continue to incur significant expenses for the foreseeable future.
We have never been profitable and at December 31, 2023, we had an accumulated deficit of approximately $436,684,000. Our net losses for the years ended December 31, 2023 and December 31, 2022 were approximately $44,603,000 and $42,347,000, respectively. We expect to continue to incur significant expenses for the foreseeable future.
We use historical data, as well as subsequent events occurring prior to the issuance of the consolidated financial statements, to estimate option exercise and employee forfeitures within the valuation model.
We estimate volatility by analyzing the volatility of the trading price of our common stock. We use historical data, as well as subsequent events occurring prior to the issuance of the consolidated financial statements, to estimate option exercise and employee forfeitures within the valuation model.
Litigation Settlement expense for the year ended December 31, 2022 totaled $5,000,000 as a result of the settlement with Venn Therapeutics, LLC. There was no litigation settlement for the year ended December 31, 2021. We do not expect to incur any litigation settlement costs in 2023. Other Income (Expense), Net.
Litigation Settlement. There was no litigation settlement for the year ended December 31, 2023. Litigation Settlement expense for the year ended December 31, 2022 totaled $5,000,000 as a result of the settlement with Venn Therapeutics, LLC. Other Income (Expense), Net.
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.
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.
During 2018, the Company formed a subsidiary in each of the United Kingdom and Australia and approximately 43% and 25% of research and development expenses recorded for the years ended December 31, 2022 and December 31, 2021 respectively was recorded in these entities. General and Administrative.
During 2018, we formed subsidiaries in the United Kingdom and Australia and approximately 36% and 43% of research and development expenses recorded for the years ended December 31, 2023 and December 31, 2022 respectively were recorded in these entities. General and Administrative.
Accordingly, we have assumed no dividend yield for purposes of estimating the fair value of our share-based compensation. 52 The following assumptions were used to estimate the fair value of employee stock options granted using the Black-Scholes option pricing model for the years ended December 31, 2022 and 2021 is as follows: Twelve Months Ended December 31, 2022 2021 Risk free interest rate 1.99 % 0.76 % Expected dividend yield 0 % 0 % Expected term in years 6.25 6.23 Expected volatility 98.08 % 102.96 % Estimated forfeiture rate 12.43 % 9.12 % Leases We lease our office space.
The following assumptions were used to estimate the fair value of employee stock options granted using the Black-Scholes option pricing model for the years ended December 31, 2023 and 2022 is as follows: Year ended December 31, 2023 2022 Risk free interest rate 3.82 % 1.99 % Expected dividend yield 0 % 0 % Expected term in years (employee options) 6.25 6.25 Expected volatility 101.47 % 98.08 % Estimated forfeiture rate 15.63 % 12.43 % Leases We lease our office space.
Corbus’ internal development pipeline includes 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.
Our pipeline is comprised of two experimental drugs targeting solid tumors: CRB-701, a next-generation 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.
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.
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.
We may enter into contracts in the normal course of business with clinical research organizations for clinical trials and clinical supply manufacturing and with vendors for pre-clinical research studies, research supplies and other services and products for operating purposes.
We are in the process of terminating the sublease agreement and do not expect any additional sublease income beyond the first quarter of 2024. 61 We may enter into contracts in the normal course of business with clinical research organizations for clinical trials and clinical supply manufacturing and with vendors for pre-clinical research studies, research supplies and other services and products for operating purposes.
We have financed our operations primarily through sales of equity-related securities. At December 31, 2022, our accumulated deficit since inception was approximately $392,081,000. At December 31, 2022, we had total current assets of approximately $60,181,000 and current liabilities of approximately $12,640,000 resulting in working capital of approximately $47,541,000.
We have financed our operations primarily through sales of equity-related securities. At December 31, 2023, our accumulated deficit since inception was approximately $436,684,000. At December 31, 2023, we had total current assets of approximately $23,546,000 and current liabilities of approximately $31,894,000 resulting in negative working capital of approximately $8,348,000.
However, due to the nature of estimates, we cannot assure you that we will not make changes to our estimates in the future as we become aware of additional information regarding the status or conduct of our pre-clinical and clinical studies and other research activities.
However, due to the nature of estimates, we cannot assure you that we will not make changes to our estimates in the future as we become aware of additional information regarding the status or conduct of our pre-clinical and clinical studies and other research activities. 58 Stock-Based Compensation Stock options are granted with an exercise price at no less than fair market value at the date of the grant.
General and Administrative expense for the year ended December 31, 2022 totaled approximately $18,699,000, a decrease of $1,726,000 from the $20,425,000 recorded for the year ended December 31, 2021.
General and Administrative expenses for the year ended December 31, 2023 totaled approximately $13,910,000, a decrease of $4,789,000 from the $18,699,000 recorded for the year ended December 31, 2022.
CRB-601 is being developed as a potential treatment for patients with solid tumors in combination with existing therapies, including checkpoint inhibitors, and is scheduled for an IND submission in the second half of 2023. The Company expects to enroll the first patient in the Phase 1 study by the end of 2023.
CRB-601 is being developed as a potential treatment for patients with solid tumors in combination with existing therapies, including checkpoint inhibitors. On January 9, 2024, we announced that the FDA cleared the IND for CRB-601 and we expect to enroll the first patient in a Phase 1 study in the summer of 2024.
These decreases in working capital were offset by a decrease in prepaid expenses of $1,573,000. Cash provided by investing activities for the year ended December 31, 2022 totaled approximately $30,074,000, which was largely due to the proceeds from sales and maturities of investments, net of purchases.
Cash provided by investing activities for the year ended December 31, 2023 totaled approximately $35,642,000, which was largely due to the proceeds from sales and maturities of investments, net of purchases.
Cash used in financing activities for the year ended December 31, 2022 totaled approximately $534,000, which related to the repayment of short-term borrowings of approximately $867,000 in connection with our loan agreement with a financing company to fund D&O insurance premiums.
Cash used in financing activities for the year ended December 31, 2023 totaled approximately $2,821,000, which related to the repayment of long-term borrowings of $2,821,000 in connection with our Loan and Security Agreement with K2HV.
See Note 3 “Significant Accounting Policies” to the consolidated financial statements included under Part II, Item 8 of this Annual Report on Form 10-K for information about our significant accounting policies. 51 We believe that full consideration has been given to all relevant circumstances that we may be subject to, and the consolidated financial statements accurately reflect our best estimate of the results of operations, financial position and cash flows for the periods presented.
We believe that full consideration has been given to all relevant circumstances that we may be subject to, and the consolidated financial statements accurately reflect our best estimate of the results of operations, financial position and cash flows for the periods presented.
Corbus is planning to bridge data from this Phase 1 trial to support a U.S. clinical trial starting in mid-2024. • CRB-601 is an anti-αvβ8 monoclonal antibody that blocks the activation of TGFβ expressed on cancer cells in the tumor microenvironment.
We are on schedule to bridge data from this Phase 1 clinical trial in China to commence a Phase 1 clinical trial in the U.S. during the first quarter of 2024. • CRB-601 is a potent and selective anti-αvβ8 monoclonal antibody that blocks the activation of latent TGFβ found on cancer cells.
We have never paid dividends on our common stock and do not anticipate paying dividends on our common stock in the foreseeable future.
We have never paid dividends on our common stock and do not anticipate paying dividends on our common stock in the foreseeable future. Accordingly, we have assumed no dividend yield for purposes of estimating the fair value of our stock-based compensation.
These contracts generally provide for termination on notice, and therefore, we believe that our non-cancelable obligations under these agreements are not material.
These contracts generally provide for termination on notice, and therefore, we believe that our non-cancelable obligations under these agreements are not material. As of December 31, 2023, other than our leases, we had no material Contractual Obligations or Commitments that will affect our future liquidity.
The Milky Way License Agreement may be terminated earlier in specified situations, including termination for material breach or termination by Corbus with advance notice.
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 BioPharma, LLC on January 25, 2024.
Recently Issued Accounting Pronouncements Recent accounting pronouncements which may be applicable to us are described in Note 3 “Significant Accounting Policies” to our Consolidated Financial Statements included under Part II, Item 8 of this Annual Report on Form 10-K. Results of Operations Comparison of Year Ended 2022 to 2021 Revenue from Awards.
We will record both fixed and variable payments received from the sublessee in our statement of operations on a straight-line basis as an offset to rent expense. 59 Recently Issued Accounting Pronouncements Recent accounting pronouncements which may be applicable to us are described in Note 3 “Significant Accounting Policies” to our Consolidated Financial Statements included under Part II, Item 8 of this Annual Report on Form 10-K.
In February 2023, the Company obtained a license from CSPC Megalith Biopharmaceutical Co., Ltd ("CSPC"), a subsidiary of CSPC Pharmaceutical Group Limited, to develop and commercialize the drug in the United States ("U.S."), Canada, the European Union (including the European Free Trade Area), the United Kingdom, and Australia (the “CSPC License Agreement”).
In February 2023, we obtained a license from CSPC to develop and commercialize the drug in the U.S., Canada, the European Union (including the European Free Trade Area), the United Kingdom, and Australia. The IND application for CRB-701 was cleared by the U.S.
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 Annual Report, particularly those under “Risk Factors.” Overview Corbus Pharmaceuticals Holdings, Inc.
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 Annual Report, particularly those under “Risk Factors.” Overview We are a precision oncology company with a diversified portfolio and are committed to helping people defeat serious illness by bringing innovative scientific approaches to well-understood biological pathways.
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.
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.
We recognize compensation costs resulting from the issuance of stock-based awards to employees, members of our Board of directors and consultants. The fair value of each option grant was estimated as of the date of grant using the Black-Scholes option-pricing model.
The stock options normally expire ten years from the date of grant. Stock option awards vest upon terms determined by our Board of Directors. We recognize compensation costs resulting from the issuance of stock-based awards to employees, members of our Board of Directors and consultants.
The Company has also developed CRB-913, an endocannabinoid small molecule drug, for the treatment of obesity and is seeking partners to fund further development. Corbus’ precision oncology internal development pipeline: • CRB-701 is a next generation ADC that targets the expression of Nectin-4 on cancer cells to release a cytotoxic payload.
The pipeline also includes CRB-913, a highly peripherally restricted CB1 receptor inverse agonist for the treatment of obesity. Our oncology pipeline: • CRB-701 is a next-generation ADC that targets the expression of Nectin-4 on cancer cells to release a cytotoxic payload.
Corbus’ endocannabinoid pipeline: • CRB-913 is a second-generation cannabinoid receptor type 1 (CB1) inverse agonist designed to treat obesity and related metabolic diseases. In the diet-induced obesity mice model (DIO), CRB-913 demonstrates a reduction in weight and food consumption, improvement in insulin resistance and leptinemia, and reduced fat deposits in the liver.
Our obesity pipeline: • CRB-913 is a second-generation highly peripherally restricted CB1 receptor inverse agonist designed to treat obesity. In a DIO mouse model, CRB-913 demonstrates a reduction in body weight, body fat content, leptinemia, insulin resistance, liver triglycerides, liver fat deposits, and improvements in liver histology.
The fair value is amortized as compensation cost on a straight-line basis over the requisite service period of the awards, which is generally the vesting period. We estimate volatility by analyzing the volatility of the trading price of our common stock.
The fair value of each option grant was estimated as of the date of grant using the Black-Scholes option-pricing model. The fair value is amortized as compensation cost on a straight-line basis over the requisite service period of the awards, which is generally the vesting period.
We have recognized approximately $0 and $882,000 of revenue from awards in the years ended December 31, 2022 and 2021, respectively, in accordance with GAAP. No revenue from licenses was recognized for the years ended December 31, 2022 and 2021.
Results of Operations Comparison of Year Ended 2023 to 2022 Revenue from Awards. No revenue from awards was recognized for the years ended December 31, 2023 and 2022 in accordance with U.S. GAAP. No revenue from licenses was recognized for the years ended December 31, 2023 and 2022. No revenue from awards or licenses are expected in 2024.
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.
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.
Other income (expense), net for 2022 was an expense of approximately $2,511,000 as compared to income of approximately $10,349,000 recorded for 2021. The decrease of $12,860,000 in 2022 as compared to 2021 was primarily attributable to a decrease in refundable research and development credits from a foreign tax authority of approximately $12,300,000 as compared to the prior year.
The increase of $2,985,000 in 2023 as compared to 2022 was primarily attributable to receipt of refundable research and development credits from a foreign tax authority of approximately $2,632,000 related to the prior year that were not realized until 2023.
The Investigational New Drug (IND) application for CRB-701 has been cleared by the U.S. FDA and the drug is currently being investigated by CSPC in a Phase 1 dose escalation clinical trial in patients with advanced solid tumors in China.
FDA in 2022, and the drug is currently being investigated by CSPC in a Phase 1 dose-escalation clinical trial in patients with advanced solid tumors in China. On January 26, 2024, we presented data from the Phase 1 dose-escalation trial in China for the first eighteen patients reflective of the first six dose cohorts. The data was presented at ASCO-GU.
Rent expense for the twelve months ended December 31, 2022 was offset by $220,531 of sublease income and we do not expect any significant changes in future periods.
Rent expense for the year ended December 31, 2023 was offset by $226,153 of sublease income.
We will not be recognizing revenue in the future from the 2018 CFF award and do not currently have any other award agreements. 53 Research and Development. Research and development expenses for the year ended December 31, 2022 totaled approximately $16,137,000, a decrease of $20,308,000 over the $36,445,000 recorded for the year ended December 31, 2021.
Research and Development. Research and development expenses for the year ended December 31, 2023 totaled approximately $31,168,000, an increase of $15,031,000 over the $16,137,000 recorded for the year ended December 31, 2022.
We do not plan to conduct additional clinical studies for lenabasum. 49 Financial Operations Overview We are a precision oncology company and have not generated any revenues from the sale of products.
These outcomes were further improved when CRB-913 was used in combination with incretin analogs ( tirzepatide, semaglutide, or liraglutide). We are currently conducting IND enabling studies and we expect to file an IND in the fourth quarter of 2024. 56 Financial Operations Overview We are a precision oncology company and have not generated any revenues from the sale of products.
We expect our cash, cash equivalents, and investments of approximately $59.2 million at December 31, 2022 will be sufficient to meet our operating and capital requirements through the second quarter of 2024 based on current planned expenditures. We will need to raise significant additional capital to continue to fund operations, including the discovery and pre-clinical costs for our product candidates.
We expect our cash, cash equivalents, and investments of approximately $20,906,000 at December 31, 2023 together with net proceeds raised from the sale of our common stock under the Open Market Sales Agreement and the January 2024 Public Offering of approximately $109,000,000 after deducting commissions and other offering expenses payable by us 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.
Removed
(the “Company” or “Corbus”) is a precision oncology company committed to helping people defeat serious illness by bringing innovative scientific approaches to well understood biological pathways.
Added
The emerging clinical data shows that CRB-701 was well-tolerated and demonstrated an ORR of 43% and a DCR of 71% in the seven patients who received doses predicted to be therapeutically relevant.
Removed
The CRB-913 program is in the pre-clinical stage, and we are seeking partnerships to fund further development. • Lenabasum is a novel, synthetic, oral molecule that selectively activates cannabinoid receptor type 2 (CB2) for the treatment of inflammation and fibrosis. The drug completed Phase 3 studies in dermatomyositis and systemic sclerosis and these studies failed to meet their primary endpoints.
Added
We expect our expenses to decline in 2024 as compared to 2023 as the upfront license payment to purchase 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.
Removed
In November 2022, the National Institutes of Health released results for the Phase 2 study it sponsored in systemic lupus erythematosus and lenabasum failed to demonstrate efficacy versus placebo.
Added
Recent Developments 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.” Since May 31, 2023, we have sold shares of our common stock under the Open Market Sale Agreement to raise aggregate gross proceeds of approximately $114,000 through December 31, 2023 and approximately $21,237,000 through this filing.
Removed
We expect our expenses to increase in 2023 as compared to 2022 as assets in our pipeline move into the clinical phase. We will continue to incur significant operating losses and accordingly we will need additional financing to support our continuing operations.
Added
On January 30, 2024, we delivered written notice to Jefferies suspending and terminating the prospectus supplement dated January 29, 2024 (the “ATM Prospectus Supplement”), related to our common stock issuable pursuant to the Open Market Sale Agreement, pursuant to the terms of the Open Market Sale Agreement.
Removed
Recent Developments CSPC License Agreement On February 12, 2023, we entered into the CSPC License Agreement with CSPC pursuant to which we received an exclusive license to obtain certain exclusive rights to develop and commercialize CRB-701 (SYS6002), a novel clinical stage antibody drug conjugate targeting Nectin-4.
Added
We will not make any sales of our securities pursuant to the Open Market Sale Agreement, unless and until a new shelf registration statement and prospectus supplement are filed. Other than the termination of the ATM Prospectus Supplement, the Open Market Sale Agreement remains in full force and effect.
Removed
The CSPC License Agreement covers exclusive commercialization rights to CRB-701 in the United States, Canada, the European Union (including the European Free Trade Area), the United Kingdom, and Australia. We will pay CSPC an upfront payment of $7.5 million ($5.0 million at signing followed by a $2.5 million payment after eighteen months).
Added
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.
Removed
CSPC will also be eligible to receive low double-digit royalties on net sales and up to $130 million in potential development and regulatory milestone payments and $555 million in potential commercial milestone payments.
Added
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, the Representative gave notice of the Underwriters’ election to exercise the option to purchase additional shares, in full.
Removed
Series A Preferred Stock On October 12, 2022, the Board of Directors (the “Board”), declared a dividend of 0.008 of a share of Series A Preferred Stock (“Series A Preferred Stock”), for each outstanding share of Common Stock to stockholders of record at 5:00pm Eastern Time on October 22, 2022.
Added
On February 2, 2024, we completed the public offering raising gross proceed of approximately $94,500,000 and net proceeds of $88,500,000 after deducting underwriting discounts and commissions and other estimated offering expenses payable by us. 57 Critical Accounting Policies Our consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the U.S. (“U.S. GAAP”).
Removed
The Certificate of Designation of Series A Preferred Stock was filed with the Delaware Secretary of State and became effective on October 12, 2022. The dividend was based on the number of outstanding shares of common stock prior to the Reverse Stock Split. This resulted in 1,002,247.048 shares of preferred stock being issued.
Added
Actual results may differ from these estimates under different assumptions or conditions. See Note 3 “Significant Accounting Policies” to the consolidated financial statements included under Part II, Item 8 of this Annual Report on Form 10-K for information about our significant accounting policies.
Removed
The outstanding shares of Series A Preferred Stock were entitled to vote together with the outstanding shares of common stock as a single class exclusively with respect to any proposal to adopt an amendment to the Company’s Amended and Restated Certificate of Incorporation, as amended (the “Certificate of Incorporation”), to reclassify the outstanding shares of Common Stock into a smaller number of shares of Common Stock at a ratio specified in or determined in accordance with the terms of such amendment (the “Reverse Stock Split”), as well as any proposal to adjourn any meeting of stockholders called for the purpose of voting on the Reverse Stock Split Proposal (the “Adjournment Proposal”).
Added
The increase in fiscal 2023 as compared to fiscal 2022 was primarily attributable to an increase in licensing costs of $7,500,000 associated with the CSPC License Agreement and $2,325,000 associated with the achievement of two development milestones under the UCSF License Agreement, as well as increases of $4,317,000 in manufacturing costs associated with the production and testing of CRB-601, $3,041,000 in pre-clinical and clinical costs to advance our pipeline to prepare for the start of clinical trials, and $1,309,000 in consulting and temporary employee costs to support various areas of regulatory, quality, manufacturing, and clinical operations.
Removed
The Company held a special meeting of stockholders on December 20, 2022 (the “Special Meeting”) for the purpose of voting on the Reverse Stock Split and an Adjournment Proposal.
Added
These increases are offset by a decrease in toxicology costs of $2,738,000 as a result of IND-enabling studies completed in the prior year for inclusion in the CRB-601 IND filing and a decrease in compensation costs of $1,328,000 as a result of reduced headcount.
Removed
All shares of Series A Preferred Stock that were not present in person or by proxy at the Special Meeting, which totaled 500,894.04 shares, were automatically redeemed by the Company immediately prior to the opening of the polls at Special Meeting (the “Initial Redemption”).
Added
Research and development expenses are expected to decrease in 2024 as upfront payments associated with licensing CRB-701 are not expected to recur and we incurred significant expenses in 2023 to manufacture CRB-601 for clinical studies.
Removed
All shares that were not redeemed pursuant to the Initial Redemption would be redeemed if ordered by the Board or automatically upon the effectiveness of the amendment to the Certificate of Incorporation implementing the Reverse Stock Split (the "Subsequent Redemption" and together with the Initial Redemption, the "Redemption").
Added
The decrease in fiscal 2023 as compared to fiscal 2022 was primarily attributable to decreases in stock-based compensation costs of $2,050,000 as stock options are being granted at lower current fair values as compared to earlier grants that are now fully vested, legal costs of $1,492,000 related to the litigation with Venn Therapeutics, LLC, $773,000 in reduced premiums associated with insurance policies, and $640,000 in consulting costs for various consultants who supported finance, business development, and information technology.
Removed
Each share of Series A Preferred Stock is entitled to receive $0.001 in cash for each 10 whole shares of Series A Preferred Stock immediately prior to the Redemption. 50 At the Special Meeting, both the Reverse Stock Split and Adjournment Proposal were approved.
Added
Other income (expense), net for 2023 was income of approximately $474,000 as compared to expense of approximately $2,511,000 recorded for 2022.
Removed
Upon issuance of the Series A Preferred Stock, the Company was not solely in control of the Redemption of the shares of Series A Preferred Stock since the holders had the option of deciding whether to attend or return a proxy card for the Special Meeting, which determined whether a given holder’s shares of Series A Preferred Stock were redeemed in the Initial Redemption.
Added
Of our total cash, cash equivalents, investments, and restricted cash of $21,576,000 at December 31, 2023, $17,804,000 was held within the U.S.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeForeign Exchange Risk The majority of our operations are based in the United States and, accordingly our transactions are denominated in U.S. Dollars. However, we have foreign currency exposures related to our cash valued in the United Kingdom in British Pounds and Euros and our cash valued in Australia in Australian Dollars because our functional currency is the U.S.
Biggest changeForeign Exchange Risk The majority of our operations are based in the U.S. and, accordingly our transactions are denominated in U.S. Dollars. However, we have foreign currency exposures related to our cash valued in the United Kingdom in British Pounds and Euros and our cash valued in Australia in Australian Dollars because our functional currency is the U.S.