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Here's Why Corbus Pharmaceuticals Holdings Inc. Jumped Today

Brian Feroldi, The Motley Fool

What happened

In response to upbeat results released from a phase 2 clinical trial, shares of Corbus Pharmaceuticals (NASDAQ: CRBP), a clinical-stage biotech focused on inflammatory and fibrotic diseases, jumped by 14% as of 11 a.m. EDT on Thursday.

So what

Corbus announced topline results from a 16-week phase 2 study evaluating its lead compound anabasum as a hopeful treatment for dermatomyositis, a rare disease that affects about 70,000 Americans each year.

The study showed that patients who used anabasum show an improvement on the Cutaneous Dermatomyositis Disease Area and Severity Index (CDASI) activity score of 9.3 points. That was a statistically significant gain when compared to the 3.7 point improvement observed in the placebo group.

What's more, anabasum was well tolerated by users and no side effects were observed.

Female doctor giving thumbs up

Image source: Getty Images.

Yuval Cohen, CEO of Corbus, offered investors the following commentary on the study:

These trial results mark the third time anabasum has demonstrated a clear signal of clinical benefit with a favorable safety profile in a rare, inflammatory disease, having done so recently in both systemic sclerosis and cystic fibrosis. We view these data as a strong validation of the unique mechanism of action of anabasum as the potential first non-immunosuppressive pro-resolving drug to target inflammation and fibrosis. Our focus now turns to successfully executing a clinical development plan aimed at bringing anabasum to the market as expeditiously as possible.

Given the upbeat clinical news, it is easy to understand why traders are cheering today.

Now what

While dermatomyositis is a possible disease-state target for investors to watch closely, Corbus also boasts two more advanced clinical trials that are studying anabasum as a hopeful treatment for systemic sclerosis and cystic fibrosis. The company already announced plans to kick off late-stage studies in those two disease states this quarter. If all goes well with each of its trials, Corbus could have a blockbuster drug on its hands.

Does anabasum's huge potential make Corbus' stock a buy today? While I'm certainly hopeful that anabasum is the real deal, my personal preference is to keep companies like Corbus on my watchlist until we have more robust phase 3 data in hand. The reason is that I've seen way too many once-promising companies implode after data from a larger study become available. For that reason, I think the smart move for now is to monitor Corbus' progress from the sidelines.

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Brian Feroldi has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.