In some ways, there's not much of a contest between GW Pharmaceuticals (GWPH) and Corbus Pharmaceuticals (CRBP 7.42%). GW's market cap is more than 10 times larger than Corbus' market cap. GW already has two approved drugs -- Sativex outside the U.S. and Epidiolex in the U.S. -- while Corbus has none.
But a smaller size and the potential for pipeline catalysts often can make clinical-stage biotechs like Corbus bigger winners than biotechs with a head start like GW Pharmaceuticals. Which of these stocks is the better buy right now? Here's how these two biotech stocks stack up against each other.
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The case for GW Pharmaceuticals
You don't have to look hard to find a big reason to like GW Pharmaceuticals. The biotech launched Epidiolex on Nov. 1, 2018, after winning FDA approval earlier this year for the drug in treating Dravet syndrome and Lennox-Gastaut syndrome (LGS), both of which are rare forms of epilepsy.
How successful will Epidiolex be? That remains to be seen. But some analysts project the drug could generate peak annual sales of $1 billion and perhaps significantly more.
This optimism stems from several factors. Epidiolex is the only drug to win approval for treating Dravet syndrome, which affects around one in 15,700 infants. Other drugs have been approved for treating LGS, but there is a considerable unmet need in patients who don't respond well to these drugs. GW Pharmaceuticals set the list price for Epidiolex to be competitive with other antiepileptic drugs.
The biotech also hopes to win European approval for Epidiolex in treating Dravet syndrome and LGS. This approval could come early next year. In addition, GW is conducting a late-stage clinical study of Epidiolex in treating the genetic disease tuberous sclerosis complex and a phase 2 study of the drug in treating another rare genetic disease, Rett syndrome.
GW has already obtained regulatory approval for cannabinoid drug Sativex in several countries as a treatment for multiple sclerosis spasticity. The biotech is pursuing U.S. approval for the drug in this indication. In addition, GW is evaluating other cannabinoid drugs in early and mid-stage studies targeting autism spectrum disorders, epilepsy, brain tumors, schizophrenia, and neonatal hypoxic-ischemic encephalopathy -- a rare disease that causes brain damage in infants.
The case for Corbus Pharmaceuticals
Corbus Pharmaceuticals' lead pipeline candidate is lenabasum. The biotech is evaluating the drug in late-stage studies for treating the rare inflammatory diseases systemic sclerosis and dermatomyositis. Corbus expects to report results from these studies in 2020. If all goes well, lenabasum could reach the U.S. market by 2021.
In addition, phase 2 clinical studies are underway for lenabasum in treating systemic lupus erythematosus (commonly referred to as lupus) and cystic fibrosis. If ultimately approved for all indications, the drug could achieve peak annual sales of close to $2 billion.
Until several weeks ago, lenabasum was Corbus Pharmaceuticals' only pipeline candidate. However, the biotech announced on Sept. 20, 2018, a deal with Jenrin Discovery LLC to obtain exclusive rights to develop and market drugs based on more than 600 compounds targeting the endocannabinoid system.
This licensing agreement immediately added CRB-4001 to Corbus' pipeline. CRB-4001 is a cannabinoid receptor 1 (CB1) inverse agonist designed to eliminate blood-brain barrier penetration and therefore reduce issues associated with earlier CB1 inverse agonists such as Sanofi's obesity drug rimonabant. Rimonabant never won approval in the U.S. and was withdrawn from the market in Europe following approval because of serious psychiatric side effects.
Corbus plans to advance CRB-4001 to a phase 1 clinical study in 2019. The biotech also intends to move one or two of the compounds licensed from Jenrin to phase 1 studies each year beginning in 2020.
Better buy
Corbus Pharmaceuticals has the greater opportunity for doubling or more over the next few years. The biotech stock will certainly skyrocket if lenabasum is successful in late-stage clinical studies. GW Pharmaceuticals has already enjoyed big gains in the lead-up to approval for Epidiolex.
But while I'm cautiously optimistic about Corbus, I also tend to agree with the old adage that a bird in the hand is better than two in the bush -- and probably even better than more than 600 in the bush. GW Pharmaceuticals' bird in the hand is Epidiolex. Although I'm not as optimistic about the drug as some analysts who project sales of $2 billion or more, I still think Epidiolex will be a winner. It's too early to know if Corbus' lenabasum, CRB-4001, and other earlier-stage compounds will succeed.
My view is that GW Pharmaceuticals is the better buy at this point. However, it's a good idea to keep Corbus on your radar screen.
