Good afternoon, ladies and gentlemen, and welcome to Corcept Therapeutics Conference Call. At this time all participants are in a listen-only mode. Later, we will conduct a question-and-answer session. Thank you. I would now like to turn the conference over to your host today, Mr. Atabak Mokari, Chief Financial Officer. Sir, the floor is yours.

Thank you. Good afternoon and thank you for joining us. I'm Atabak Mokari, Corcept's Chief Financial Officer. Today, we issued a press release announcing our financial results for the third quarter and providing a corporate update. A copy is available at corcept.com. Our complete financial results will be available when we file our Form 10-Q with the SEC. Today's call is being recorded. A replay will be available at the Investors Past Events tab of our website. Statements during this call, other than statements of historical fact, are forward-looking statements based on our plans and expectations that are subject to risks and uncertainties, which may cause actual results to differ materially from those such statements expressed or implied. These risks and uncertainties include, but are not limited to, our ability to operate our business and achieve our goals and conduct our clinical trials during the COVID-19 pandemic and to generate sufficient revenue to fund our commercial operations and ongoing programs; the availability of competing treatments, including generic versions of Korlym; our ability to obtain acceptable prices or adequate insurance coverage and reimbursement performance; risks related to the development of our product candidates, including their clinical attributes, regulatory approvals, mandates, and oversight and other requirements; and the scope and protective power of our intellectual property. These and other risks are set forth in our SEC filings, which are available at our website and the SEC's website. On this call, forward-looking statements include those concerning the safety, efficacy, and other clinical and commercial attributes of relacorilant, exicorilant, miricorilant, CORT 113176, and our other selective cortisol modulators for the treatment of patients with solid tumors, liver disease, hypercortisolism, antipsychotic-induced weight gain, amyotrophic lateral sclerosis, or ALS, and other disorders; the progress, enrollment, timing, design, and results of our clinical trials; our revenue guidance, cash flow, and expected growth; the impact of the COVID-19 pandemic on our commercial operations, financial performance, clinical development programs as well as on physicians, payers, and patients and on our anticipated financial performance and clinical development activities after the COVID-19 pandemic is controlled; the timing, cost, and outcome of litigation, including our lawsuits against Teva and Hikma Pharmaceuticals, Teva's appeal of its defeat in the post-grant review, or PGR, before the patent trial and appeal for PTA; and may include other forward-looking statements during the course of the call. We disclaim any intention or duty to update forward-looking statements. Our revenue in the third quarter of 2021 was $96.1 million compared to $86.3 million in the third quarter of 2020, an increase of 11%. Third quarter 2021 GAAP net income was $30.5 million compared to $21.6 million in the same period last year. Non-GAAP net income, which excludes noncash expenses related to stock-based compensation and the utilization of deferred tax assets, together with related income tax effects, was $37 million in the third quarter compared to $30 million in the same period last year. We have tightened our 2021 revenue guidance of $365 million to $375 million compared to previous guidance of $355 million to $385 million. Our cash and investments totaled $495.2 million at September 30, an increase of $23.6 million from June 30. The balance at September 30 reflects the repurchase of $28 million for common stock in the third quarter, 1.2 million shares pursuant to our share repurchase program, and about 200,000 shares in connection with the net exercise into stock options. Over the term of the share repurchase program, we purchased 4.3 million shares of our common stock at a cost of $98.2 million. And now, Charlie Robb, our Chief Business Officer, will provide a legal update.

Thanks, Atabak. In March 2018, we sued Teva in Federal District Court to prevent it from marketing a generic version of Korlym in violation of our patents. Trial was originally scheduled to start in February of this year, although that date was vacated by the court. A new trial date has not been set. In April, the court granted us permission to file for summary judgment regarding Teva's infringement of our 214 patent. Teva responded by filing its own summary judgment motion with respect to the same patent. Summary judgment is a procedure whereby a court can decide a case without holding a trial. We believe the court has all it needs with respect to the 214 patent to decide the case in our favor. Having lost its action before the PTAB, which I will talk about more in a minute, Teva can no longer challenge the 214 patent's validity in the district court case; Teva can only argue that its proposed product would not infringe, a position we believe has no legal or factual support. If the court grants our motion, we will have won the case. Teva would be banned from marketing generic Korlym until 2037 when the 214 patent expires. If the court rules in Teva's favor, we will proceed to trial sometime next year. There is, at present, no timetable for the court's summary judgment ruling, no trial date, and no schedule for any trial-related activities. In parallel with the District Court action, Teva petitioned the Federal Circuit Court of Appeals to reverse its PTAB loss, which I referred to earlier, a request we believe has no merit. Briefing is complete, and the court heard oral argument on October 5. We expect a decision in the next quarter or two. On March 12, we sued another ANDA filer, Hikma Pharmaceuticals, in the same Federal District Court that is adjudicating our case against Teva. In the Hikma case, the court has set a fact discovery deadline of July 1, 2022, next year. Nothing is scheduled after that. With respect to both Teva and Hikma, we are confident in the strength of our legal position.

Thank you, Charlie. The strong growth of our commercial business in the third quarter reflects the continued easing of COVID-related public health restrictions. This has enabled physicians to see their patients more frequently, improving their ability to diagnose and treat patients with Cushing's Syndrome. The business translation of more patients benefiting from Korlym treatment is a new record high in our quarterly revenue. We expect our growth to continue as pandemic conditions recede. Leading endocrinologists increasingly believe that there are substantially more patients with Cushing's Syndrome than was once assumed. For many of these patients, Korlym is an excellent treatment. We remain very optimistic about the future of our Cushing's Syndrome business because it is built on a strong foundation, an effective life-saving medication promoted by a dedicated commercial team that puts the interest of patients first. Our clinical development programs are another cause for optimism. We have created a library of more than 1,000 proprietary cortisol modulators, many of which are attractive candidates for development. Like Korlym, these compounds bind strongly to the glucocorticoid receptor, or GR. Unlike Korlym, they have no affinity for the progesterone receptor and so no cost on Korlym's most serious off-target effects. Beyond sharing the qualities of strong cortisol modulation and not perturbing the progesterone receptor, preclinical and clinical testing has shown that our molecules behave differently from one another in important ways. Some cross the blood-brain barrier, while others do not. Some perform best in models of solid tumors, while others are more potent in models of metabolic disease. Some appear to be tissue-specific, while others have more global effects. These diverse qualities have allowed us to initiate clinical trials by a variety of disorders including ovarian, adrenal, and prostate cancer, antipsychotic-induced weight gain, nonalcoholic steatohepatitis, or NASH, and, of course, Cushing's syndrome. We are also planning to start a Phase II trial in patients with ALS in the first quarter of next year and have additional compounds in Phase I and preclinical development. Korlym's commercial success has provided the funds to advance all of these programs. Before I provide an update on our development programs, I'd like to introduce you to Bill Guyer, who recently joined us to lead our clinical development activities. Bill experienced tremendous success over his 20-year career at Gilead, and we have already benefited from his expertise and leadership. Bill joins us on this call and will be available during the Q&A session.

Thank you, Joe. Our oncology program is testing three anticancer mechanisms, which were first postulated by investigators at the University of Chicago and confirmed by other prominent researchers. One mechanism is increasing apoptosis. Apoptosis is the programmed cell death that chemotherapy is meant to induce. Cortisol suppresses apoptosis. In our successful trial in women with advanced ovarian cancer, the addition of the selective cortisol modulator, relacorilant, enhanced the effect of chemotherapy likely by blunting cortisol's anti-apoptosis effect. The results presented at the recent European Society for Medical Oncology, ESMO, Congress, clearly demonstrate the benefit experienced by the women who received relacorilant, delaying disease progression without increased side effect burden. As a reminder, our Phase II trial is a controlled multicenter study of 178 women with platinum-resistant ovarian cancer who were randomized to one of three treatment arms. 60 women received a higher dose of relacorilant on the day before, the day of, and the day after they received nab-paclitaxel. We call this the intermittent arm. 58 women received a lower daily relacorilant dose in combination with nab-paclitaxel. We call this the continuous arm. And 60 women received nab-paclitaxel alone, the comparator arm. The trial's primary endpoint was progression-free survival, or PFS. The women who participated in our study were very ill, including platinum refractory patients. All had experienced disease progression despite prior lines of therapy. The median number of prior treatments was three. It is clear that relacorilant provided a benefit to many of these women. Those who received relacorilant intermittently exhibited a statistically significant improvement in PFS compared to the group that received nab-paclitaxel monotherapy. Their hazard ratio was 0.66 with a p-value of 0.038. Their median PFS was 5.6 months, 1.8 months longer than the nab-paclitaxel monotherapy group, which is 3.8 months. The women in the intermittent arm also experienced a statistically significant improvement in their duration of response relative to those in the comparator arm, 5.6 months versus 3.7 months, with a hazard ratio of 0.36 and a p-value of 0.006. While the overall survival, or OS, data collection had accumulated only 63% of the target 120 events at the time of the database cutoff, the women in the intermittent arm experienced a median OS of 12.9 months compared to 10.4 months in the comparator arm. Safety and tolerability in the two groups were comparable. We expect that the primary analysis of the OS data for this study will be available in the first quarter of next year. Based on these statistically significant and clinically meaningful results, we have received extremely positive feedback from leading gynecological oncologists regarding the promise of relacorilant as a potential treatment for women with this dire disease. Their premise is simple and powerful: delayed disease progression without increased side effect burden is an important medical advance. We are planning to meet with the FDA in the coming months to discuss the optimal path forward.

A second mechanism by which cortisol modulation may prove useful is by blocking an important tumor growth pathway. Cortisol stimulation is a major reason why patients with metastatic prostate cancer treated with a widely prescribed androgen receptor antagonist, enzalutamide, eventually experienced resurgent disease. Deprived of androgen stimulation, their tumors switch to cortisol activity to stimulate growth. Our hypothesis is that adding a cortisol modulator to androgen deprivation therapy will close this tumor escape. We are conducting a dose-finding study of our selective cortisol modulator, exicorilant, combined with enzalutamide, in men with castration-resistant prostate cancer and expect to select an optimum dose by the end of this year. A third oncologic mechanism recognizes cortisol's suppression of the immune system, a quality that likely blunts the effectiveness of immunotherapy. We are conducting an open-label Phase Ib trial of relacorilant plus the PD-1 checkpoint inhibitor, pembrolizumab, Merck's drug KEYTRUDA, in patients with advanced adrenal cancer whose tumors produce excess cortisol. These patients suffer the effects of adrenal cancer and Cushing's Syndrome, a usually quickly lethal combination. Pembrolizumab is rarely effective as monotherapy in these patients. We believe that these patients' cortisol excess may be countering the intended effects of pembrolizumab, which is to stimulate the immune system. Our trial is evaluating whether relacorilant can treat these patients' Cushing's Syndrome by reducing cortisol activity and by reversing cortisol-induced immune suppression, allowing pembrolizumab to achieve its full cancer-killing effect. We plan to enroll 20 patients at five sites in the United States. The primary endpoint is objective response rate with secondary endpoints, including progression-free survival, duration of response, and overall survival. I will now turn to our programs in metabolic disease and the recent findings of our proprietary selective cortisol modulator, miricorilant, in patients with NASH, a serious liver disorder. Patients who receive miricorilant in our Phase II trial exhibited large rapid reductions in liver fat but also substantial transient elevations of the liver enzymes ALT and AST. The improvement in liver fat in these patients was greater and occurred much more quickly than we had expected and are rarely seen over any period of treatment. As a reminder, the trial's primary endpoint was a 30% reduction in liver fat after 12 weeks of treatment. In fact, patients exhibited reductions in liver fat, ranging from 38.5% to 73.8% after receiving miricorilant for just one month. It may be that the rapidity of miricorilant's fat-reducing effect caused ALT and AST to rise. One way the liver sheds its lipids is by metabolizing them into fatty acids which, in excessive amounts, irritate the liver. Interestingly, liver levels of serum lipids in these patients did not increase with treatment, providing support for the idea that miricorilant leads to the excess fat in the liver being rapidly metabolized immediately within the liver. We will present these results at the American Association for the Study of Liver Disease, AASLD, meeting later this month. The presentation is now available in the Publications section of our website.

Our recently initiated Phase Ib dose-finding trial in patients with presumed NASH will evaluate if miricorilant can produce significant reductions in liver fat without causing liver irritation. We are also evaluating miricorilant as a potential treatment for patients with another serious and widespread disorder, antipsychotic-induced weight gain. In the United States, 6 million people take antipsychotic medications such as olanzapine and risperidone to treat illnesses including schizophrenia, bipolar disorder, and depression. While these drugs are very effective, they exact a steep price in the form of rapid and sustained weight gain, which leads to cardiovascular and metabolic disease. The average life expectancy of patients in the United States who chronically take antipsychotic medication is decreased by 20 years, frequently due to increased cardiovascular events such as heart attacks and strokes. We are conducting two double-blind, placebo-controlled Phase II trials of miricorilant in patients with this disorder, GRATITUDE and GRATITUDE 2. These trials seek to build on the positive data from our study of miricorilant in healthy subjects. Last year, we completed a trial in which 96 healthy subjects received olanzapine and either 600 milligrams of miricorilant, 900 milligrams of miricorilant, or placebo for 14 days. Subjects who received miricorilant gained significantly less weight than those who received placebo. They also exhibited a smaller increase in triglycerides and in ALT and AST, which typically exhibit sharp transient increases at the start of olanzapine therapy. A paper describing these results was recently published in the Journal of Clinical Psychopharmacology. The GRATITUDE trial is evaluating whether miricorilant can reverse recent antipsychotic-induced weight gain. 100 patients with schizophrenia or bipolar disorder will receive, in addition to their established dose of antipsychotic medication, either 600 milligrams of miricorilant or placebo for 12 weeks. GRATITUDE is being conducted at 30 centers in the United States. Our GRATITUDE 2 study is testing miricorilant as a treatment for long-standing antipsychotic-induced weight gain. 150 patients with schizophrenia will receive, in addition to their established dose of antipsychotic medication, either 600 milligrams or 900 milligrams of miricorilant or placebo for 26 weeks. GRATITUDE 2 is being conducted at 35 centers in the United States. The primary endpoint in both studies is a reduction in body weight. Other important measures of metabolic activity will also be examined. We expect to complete enrollment in GRATITUDE 2 by the end of this year and in GRATITUDE in mid-2022.

As many of you know, relacorilant is our planned successor to Korlym for the treatment of hypercortisolism. We are evaluating it in two Phase III trials, GRACE and GRADIENT. Like all of our proprietary molecules, relacorilant is a selective cortisol modulator. Like Korlym, it achieves its effect by competing with cortisol at the glucocorticoid receptor. Unlike Korlym, it does not bind to the progesterone receptor, PR for short. It is not the abortion pill, and it does not cause other PR-related side effects, including endometrial thickening and vaginal bleeding. By a different mechanism, relacorilant also does not appear to cause hypokalemia, low potassium, a serious side effect experienced by 44% of patients in Korlym's pivotal trial. Korlym-induced hypokalemia is a leading cause of Korlym discontinuation. Relacorilant's Phase II efficacy and safety data were strong. Patients experienced meaningful improvements in hypertension and glucose control, as well as in a variety of other signs and symptoms of Cushing's Syndrome. There were no relacorilant-induced incidences of endometrial thickening or vaginal bleeding and no drug-induced hypokalemia. The trial results were recently published in Frontiers in Endocrinology. Our GRACE trial has a planned enrollment of 130 patients with any etiology of Cushing's syndrome. As a reminder, GRACE has a randomized withdrawal trial design. All patients received relacorilant for 22 weeks in an open-label phase. Those who meet response criteria for improvement in glucose control, hypertension, or both are randomized to continue treatment with relacorilant or placebo for 12 weeks. While the pandemic has and continues to impact the execution of this trial, we and our investigators are eager to take GRACE to the finish line. We expect GRACE to serve as the basis for our NDA submission in Cushing's Syndrome, which we remain on track to submit in the second quarter of 2020. Our second Phase III trial, GRADIENT, is studying relacorilant's effects in patients whose Cushing's Syndrome is caused by an adrenal adenoma or adrenal hyperplasia. Patients with this etiology of Cushing's Syndrome often experience a less rapid decline but, ultimately, their health outcomes are poor. GRADIENT has a planned enrollment of 130 patients and is being conducted at many of the sites participating in GRACE. GRADIENT is the first controlled study in patients with this type of Cushing's Syndrome. While we do not expect our NDA in Cushing's Syndrome to depend on data from GRADIENT, we do expect that its findings will help improve the care of these increasingly recognized patients. Finally, a brief word about CORT 113176, which has shown promise in animal models of ALS. We are in discussions with leading clinicians and the FDA regarding our development plans and plan to initiate the Phase II trial by early next year. While the pandemic dampened our commercial results for more than a year, our business is growing as pandemic conditions improve. And remember, even in the most challenging periods of the pandemic, our commercial business generated more than enough cash to fund our advancing development activities. We believe cortisol modulation can help treat many serious disorders. Korlym for patients with Cushing's Syndrome is one example of cortisol modulation's benefit. The data generated by our ovarian cancer, NASH, and antipsychotic-induced weight gain programs provide increasing proof of cortisol modulation's broad worth. Currently, our oncology program is evaluating two of our proprietary cortisol modulators in three tumor types: ovarian, prostate, and adrenal. Our metabolic program is following up encouraging clinical data in NASH and antipsychotic-induced weight gain. We continue to enroll patients in our Phase III trials of relacorilant in Cushing's Syndrome. Early next year, we plan to start a Phase II trial using another of our proprietary compounds, CORT 113176, to treat patients with ALS and more proprietary early-stage compounds to advance towards the clinic. This is an exciting time at Corcept, and I'd like to thank our employees for their tremendous effort and dedication. In the coming months, we plan to expand our teams to support what we believe is an increasingly broad and strong pipeline. I'll stop here for questions.

Your first question is from Chris Howerton of Jefferies. Your line is open.

Excellent. Thank you very much for taking the questions. And I would agree, a lot going on, Joe, and an exciting time for the company. So two questions, I suppose for me. One would be, as you're kind of seeing the haze from the pandemic clearing and, obviously, the acceleration, as you indicated, what do you think are going to be the key drivers for the commercial business in Cushing's next year? Any thoughts on things like sales projection, guidance, or what the key drivers are that you guys are looking forward to from a commercial perspective next year? The second question that I would have is that like how do you anticipate the overall survival data from the ovarian cancer cohort? I think it's from the Phase II. How will that impact the ultimate design? And do you believe there's still any opportunity for an accelerated approval using an alternative endpoint outside of OS?

Thanks, Chris. I think we got both of those questions. And to save my voice a little bit, I'm going to pass you over to the Head of our Commercial Group, our Chief Commercial Officer, Sean Maduck, to answer the first question.

Chris, thanks for the questions. In terms of 2022, we expect that growth will continue. We do not provide guidance at this time, and we'll provide guidance early next year for our '22 numbers. In terms of what the drivers of growth will be, stepping back a little bit, Joe talked about the pandemic sort of lifting. And what we know is that physician visits matter, right, for both patients and our clinical specialists. And during the pandemic, those all went to zero. At the beginning of this year and sort of increasingly throughout the year, as restrictions have eased, things have opened up and patients have gone back to see their physicians, and we've been able to actually interact with physicians. As a result, we see more patients being prescribed Korlym. So things have started to return to normal, and we're optimistic that that improvement is going to continue. But I just want to state, we're not there yet. We're partway there. We're not there yet. The reality is that some things may never return to how they were pre-pandemic. So in terms of next year, one thing we've done very diligently, methodically over time, is look at sort of our sales force and potentially increasing the size if we believe there's opportunity to get to more physicians. We started with 15 at launch, we're at 50 today, and we're planning to get to around 60 by next year. And just to be clear, it takes time to find the right territory. That makes sense. It takes time to find the right talent. And then it takes time to get that clinical specialist trained up to a place where they could be effective in the field. So I wouldn't expect the extra 10 heads to start providing value early next year. But throughout the year, we'd expect to see some ramp-up from that. So I mean, really, we're continuing to explore ways that we can continue to educate on disease education and on Korlym and reach as many physicians as we possibly can. And just to sum it up, I mean, we have more prescribing physicians than we've ever had, and we've got more patients on Korlym than we've ever had. So we expect to continue that trend into next year.

And I'd like to now introduce all of you to Bill Guyer. Bill is our Chief Development Officer who recently had a long and successful career at Gilead. And I'd like to have him answer your second question, Chris, related to our ovarian cancer study.

Great. Thank you. Thank you, Joe, and thank you for that question. So while your question was around OS, I do want to kind of bring you back to the beginning of the trial. With our Phase II study, we met our primary endpoint. And we're very excited that we met our primary endpoint because we saw statistically significant improvements in progression-free survival and duration of response by approximately two months. And the good thing is, for that Phase II study, we saw overall results that were very strong, and we didn't have to look at subgroups to see a response for relacorilant plus nab-paclitaxel. So I think that's a very positive piece. And after the presentation that Joe mentioned at ESMO, we've had many conversations with gynecological experts around the world, and they're just as excited about those primary results from our Phase II study. Based upon those results, we are active in planning our meeting with the FDA, and we'll talk about the most relevant information to come away with an optimal design for our path forward. When it comes to OS, we're evaluating OS. At the time when we did the first data cut, we had 63% of OS events. And at that time, we saw a trend towards an improvement of about 2.5 months. I think that's also very positive. But yet, the good thing is that women are living longer in this trial, and that's the ultimate goal of hopefully what we can achieve with relacorilant plus nab-paclitaxel. We will report the next analysis when we hit that final data cut of 120 events. We are actively planning for a Phase III study, and we plan to move forward, and we're working with a leading organization called GOG, which is the Gynecological Oncology Group. And as we work with them, they're very excited about the results as well and are actively working with us to help guide us for a path forward related to our Phase III study or any other path forward with the FDA.

Thank you, Bill. And Chris, I know the import of your question. And look, I think everyone should, again, I said before, I've said it in previous calls that your expectation should be a Phase III study. It's certainly our expectation. We're setting up to do that. But data will come along over the next few months, and we will have conversations with the FDA and go from there, of course, alert you as soon as things are settled.

Okay. All right. Well, nice to meet you, Bill. And thanks so much for answering the questions.

Thanks, Chris.

Your next question is from Matt Kaplan of Ladenburg Thalmann. Your line is open.

Hi, thanks for taking the question and congrats on the strong quarterly results. Just wanted to, I guess, in your development programs, you mentioned ALS and your plans for 113176. Can you give us a little bit of detail in terms of the mechanism of action and why you think this molecule could play a role in ALS?

Yes. Matt, let me take that question because, again, to provide a little bit of context, one of the things that, really from the beginning of Corcept, we do a little bit differently than other pharmaceutical companies is we have always had extensive academic collaborations really throughout the world, half in the United States and half outside of the United States, half preclinical and half clinical. And frankly, it was the only way I thought we could get to the really broad platform of cortisol modulation. And just before I answer your question about ALS, everyone should understand that the initial data for the oncology programs that we have came out of a long-term collaboration with the University of Chicago. The programs that we have in metabolic disease, particularly in NASH, came out of long-term collaboration that we have with the University of Lyden in the Netherlands. And what it really provided for us was a great arms system. Not all research works out, but when it does, we are able to move it back in-house and make it go much more quickly. One of our collaborating researchers is actually in Buenos Aires, Argentina, a long-term ALS investigator. And fortunately, as I know you know, Matt, there really hasn't been much success in ALS ever. But in any event, in working with standard animal models in ALS, he really was able to show that cortisol modulation and specifically he has ideas of really where it's working in the brain. These animal models not just slowed the deterioration of ALS but, at least in the period from which he studied the animals, actually improved things, actually clinically improved the animals and also, from a pathological point of view, increased their muscle fiber strength and muscle function. So it's a very intriguing finding. Now ALS is like Mount Everest; I mean that is not an easy mountain to climb. It's a dire need. Many companies have tried to work on it. And all I can really tell you at this point is that the best evidence for the success are the successful animal testing, which have now been repeated several times. And as we like to send you the articles where you can find themselves have now all been published in peer-reviewed journals. So we'll see. What I can tell you is that there's a group of investigators who are very interested in this mechanism. We're very interested in taking it forward. We're very excited to give it a try. It's a difficult area to work in. But wouldn't it be cool if we can actually provide some help for these patients?

Sure. That's helpful. And then secondly, in terms of the castrate-resistant prostate cancer program, what are the next steps after you select the optimal dose? Is that movement into Phase III?

I think it's actually moving into Phase II. This is really a Phase Ib study. I want to remind everyone that it's a very intriguing idea with solid science behind it from reputable institutions. The concept is about blocking a critical escape pathway for men receiving androgen modulation that is no longer effective. I also want to mention that we are conducting a study with exicorilant, one of our cortisol modulators. The University of Chicago is running a similar study with relacorilant, and we expect both of these studies to reach their dose-finding conclusion around the same time towards the end of the year. After that, we will decide which compound to move forward with into Phase II.

That's helpful. For my last question regarding Korlym, you had notable success in the third quarter. What are you observing so far in the fourth quarter regarding continued momentum in patient additions and starts?

Yes. We do not comment on ongoing quarters, but we see that there is no reduction in the trend we observed previously.

Your next question is from Tazeen Ahmad of Bank of America. Your line is open.

Hi, good afternoon guys. Thanks for taking my questions. A couple on Korlym, if I could. Can you give us a little bit more detail about what the contribution of price and volume were to growth this quarter?

Yes. We implemented a 5% price increase on March 1 of last year or at the beginning of this year. Looking at year-on-year growth, approximately 60% of the increase was driven by volume and 40% was due to price.

And I guess, as this year has progressed, has that contribution from volume increased despite the COVID headwinds?

Yes.

Yes. Tazeen, as Sean mentioned earlier, we now have more patients taking Korlym than have ever taken it and more physicians prescribing.

Okay. Can we discuss ovarian cancer? For your Phase III trial design, do you anticipate needing to conduct just one study, or would two be necessary? Also, did you have an official end of Phase II meeting with the FDA before you designed the study?

Well, thanks for that question. This is Bill Guyer. So we're actively planning to meet with the FDA. When we have all the information to have that discussion, we will within the next few months, as I think Joe said. At this time, we're planning on a Phase III trial. That's looking at the intermittent dose because that's where we saw the most successful dose of relacorilant plus nab-paclitaxel. We plan on doing a controlled study versus an investigator choice of treatment. While that study will be larger than our Phase II study, we basically just want to replicate the great results we saw in Phase II where we saw statistically significant improvements in PFS as well as DOR, duration of response. We're going to actively work, as I said earlier, with a leading organization here in the United States that has a global connection. It's called the GOG, the Gynecological Oncology Group, and they are collectively just as excited as we are, if not actually sometimes more excited than we are, to progress this study forward and also help us with the FDA and other regulators.

And so I'm just going to sum up because it was in there, Tazeen. Our expectation is a single study.

Right. Because I was assuming that because of the undermet need, that should be sufficient. So thanks for confirming.

Your next question is from the line of Arthur He of H.C. Wainwright. Your line is open.

This is Arthur for RK. Thanks for taking my question. So I guess I want to touch on the NASH Phase I study for the miricorilant. Could you guys give us more color on the study design and as well as the patient inclusion criteria? And when could we expect initial data from that study?

Yes. Great question. As I answer that question, let me just back you up a little bit because patients with NASH have lived with that disease and progressed over a decade. They typically start with nonalcoholic fatty liver disease and then progress to NASH where they have fibrosis and sometimes progress to cirrhosis. The goal is to reverse that liver fat accumulation and reverse fibrosis over time. It's common in NASH development programs to achieve those goals over the course of the year. In our Phase II study, and again, I'll get to your answer on Phase Ib, but I've got to remind you of the Phase II study that Joe talked about, what we saw really was with miricorilant unprecedented results for fat loss. When we looked at miricorilant 600 milligrams and/or 900 milligrams, we saw reductions in liver fat for 40% to as much as 75%. We actually saw one patient have complete resolution of liver fat in just four weeks. That resulted, though, unfortunately, with a consequential rise in ALT and AST. So as we look at those endpoints, we're trying to now design that Phase Ib study, which we have done so, and it has started and we're actively recruiting that study. That Phase Ib study is going to have four different cohorts looking at lower doses of miricorilant, starting at 150 milligrams, 300 milligrams, and 450 milligrams, as well as a dose escalation scheme as one of the cohorts, starting at 150 milligrams and up to a maximum dose of 600 milligrams. Each cohort is gated by an evaluation of safety and efficacy every four weeks and will continue up to 16 weeks. This is an open-label trial. We'll look at the safety and efficacy results as they come in for each cohort, and we'll plan accordingly as we interpret those results.

So I just wonder, for the endpoint evaluation, are you guys planning to use the imaging there? Or is there any biopsy involved for the NASH study?

No biopsy is involved in this study. We're using MRI-PDFF, which is an MRI version to look at liver fat. And that's what we did in the Phase II study as well.

And we could expect the initial data for next year, probably?

As I said, we're going to be looking at the data for each cohort. And there's four-week dates. We'll be looking at that data as it comes along. It's basically a six-month trial. But internally, of course, we'll be seeing the data as it comes in on a regular basis.

Okay. And my next question is regarding the capital allocation. So with almost $0.5 billion cash on hand, besides the internal pipeline development, are you guys contemplating any business development target? Just curious.

Arthur, it's Atabak. Thanks for the question. We are cognizant of our large cash position and regularly evaluate our capital allocation alternatives but have nothing new or no updates to report at this time.

Yes, just to underscore that, though, yes, we really are aware of how successful the business has shown to run has been. We're continuing evaluating where we'd like to put the cash we don't need for our clinical programs. Obviously, that's the first priority. So it is an active topic really at all points. And should we have updates, you will be right on the list now. So thank you, Arthur. Thanks for the question.

Your next question is from Alan Leong of BioWatch. Your line is open.

Thank you for taking my questions. Joe, Charlie, Atabak, and Sean, it’s great to hear from you, and Bill, it’s nice to meet you. Congratulations on the quarter. I want to revisit something that was mentioned earlier. There are more patients with Cushing's than we previously believed. Can you provide some insight on this? Is this primarily reflecting the more severe cases, or are endocrinologists starting to include less severe cases as well?

Yes. Thanks, Alan. This is Sean. I'll answer that. And Joe, please add any color that you'd like to. But I want to talk a little bit about the historical data around this disease. The population data that is often referenced and has been around for many years suggests that the prevalent patient population is around 20,000 patients a year, half of whom are cured by surgery. I think something that's important to note about that data, and you just touched on it, is that 70% of those patients have Cushing's disease. For those that aren't as familiar with the illness, that's patients with disease of pituitary origin. What's happened really over time, and most recently, I would say in the last five-plus years, is there's really mounting evidence showing that there may be more patients with adrenal hypercortisolism than previously thought. There's a large amount of independent research and multiple publications, which we'd be happy to share, that support this. So, there's not a million hypercortisolism patients, I mean, this is still a rare disease. But could there be 30,000 or 40,000? Yes, I mean, it wouldn't surprise me if there were. As education increases, physicians are screening more and awareness is being raised, I think we'll see that evolve over time, and there will be a better understanding of what this market really looks like.

Yes. It's really, Alan, very nice to be able to do that. That is the first controlled study in patients with this specific form of Cushing's Syndrome. We're able to do it in a standard kind of double-blind fashion because many of these patients are not treated at all for their hypercortisolism at this point. They're just treated with seven different medications for seven different symptoms. I'm really looking forward to adding that to the scientific literature and hopefully be helpful in clinical care very quickly.

I got a couple more questions, but they tend to be more philosophical. I want to follow up on Matt Kaplan's question on CORT 113176. So really on how your portfolio maybe apply to CNS and muscular diseases because I'm watching this and cortisol dysregulation and metabolic poles are prominent in these patients. I'd like to see the drug be successful with CNS mechanism, but it's still Mount Everest, but I look at your drug, and if all we do is help mitigate their metabolic problems, that's still huge. So I don't know if you have a color on that.

I can summarize that for you. As you know, I have a background in psychiatry, and I believe the brain is highly sensitive to hormonal imbalances, particularly with cortisol. Historically, conducting psychiatric and neurological studies has been quite challenging, and many large companies have struggled in this area, leading to cutbacks. However, I am deeply interested in this field, as I see significant needs and opportunities. Currently, we have a study on post-traumatic stress disorder being conducted by the VA, and there's promising animal data related to Huntington's disease. I am optimistic that within the next 5 to 10 years, we will be more actively engaged in addressing central nervous system disorders. It would be wonderful to provide assistance to those patients. Modulating cortisol seems highly worthwhile. We have a lot on our agenda right now, but I believe we will gradually start to incorporate CNS disorders as we gather more insights. So let's keep our hopes up.

We do have a full benefit, and that's why I call it. And you can see the clinical pace quickening and the portfolio expanding, very interesting for a small company. And yet, you're opening up two new drugs to the clinic. Is this what you envisioned as a game plan, a growing clinical portfolio in say even fatter than today? Do you still hope you can introduce a new drug roughly every year?

That is indeed the objective. Cortisol modulation is a significant and expansive area, and we want to be cautious. We carefully consider what we can realistically achieve. Yes, I believe that's an accurate reflection of our aim, which is to add one compound each year and, if the data supports it, to introduce one disorder each year as well. I can't guarantee that will happen, but we will follow where the evidence leads us. However, I truly believe we are onto something substantial. Cortisol modulation is a major opportunity, and we are at the forefront of it.

I hope it comes true. You're kind of interesting. It's an interesting situation being such a small company, trying to create and execute a large portfolio. Good luck.

Yes. And we're not as small as we used to be, Alan, you can remember that, right? All right. Well, listen, I'm going to stop here. Great to talk to all of you. Obviously, as we have news, we will put it out. Otherwise, we'll talk to all of you next quarter. And hope you enjoy what's left of the fall and the early winter. Talk to you soon. Bye-bye. Thanks.

Thank you, speakers. Ladies and gentlemen, this concludes today's conference call. Thank you all for joining. You may now disconnect.