What happened

Shares of Corbus Pharmaceuticals Holdings (CRBP 1.18%) were up 40.1% as of 11:34 a.m. EDT on Thursday. The biotech announced earlier in the day that it had signed a deal with Jenrin Discovery LLC for exclusive worldwide rights to develop and market drugs based on more than 600 compounds targeting the endocannabinoid system.

So what

The licensing deal with Jenrin Discovery was huge for Corbus because it provides a big boost to the biotech's pipeline. Corbus previously had only one pipeline candidate -- lenabasum (formerly known as anabasum). The drug is currently in a phase 3 clinical study targeting the treatment of systemic sclerosis, a rare autoimmune disease. Corbus also plans to start another phase 3 study of lenabasum for treating dermatomyositis by the end of this year after reporting positive phase 2 results for the drug last year.

Female scientist looking through microscope with another scientist holding dropper

Image source: Getty Images.

Now, though, Corbus instantly has another candidate in its pipeline, CRB-4001. Like lenabasum, CRB-4001 targets the endocannabinoid system. But while lenabasum binds to cannabinoid receptor 2 (CB2), CRB-4001 is a cannabinoid receptor 1 (CB1) inverse agonist that interacts with CB1 receptors outside of the brain.

Corbus plans to advance CRB-4001 to a phase 1 clinical study in 2019. The National Institutes of Health (NIH) has already committed to funding a phase 2 study. CRB-4001 holds potential in treating several liver, lung, heart, and kidney fibrotic diseases, including nonalcoholic steatohepatitis (NASH).

The impact of the deal with Jenrin goes beyond just CRB-4001, though. Corbus CEO Mark Tepper said that the biotech "now has a pipeline that we believe will support the advancement of one to two new drug candidates into clinical testing each year starting in 2020."

Now what

Today's news makes Corbus more attractive than it was with only lenabasum in its pipeline. CRB-4001 appears to be a great fit for the biotech. And NASH is a great indication to target for Corbus.

It's still really early, though. I'd like to see exactly how Corbus moves forward with the clinical program for CRB-4001. Of course, it's also important to find out how well lenabasum fares in its phase 3 study for the treatment of systemic sclerosis. I think Corbus continues to be a biotech stock for investors to watch closely.