Corcept Therapeutics Inc Q4 FY2021 Earnings Call

Hello. Thank you for standing by and welcome to the Corcept Therapeutics Conference Call. At this time all participants are in a listen-only mode. After the speaker presentation there will be a question-and-answer session. Please be advised that today's conference may be recorded. I would now like to hand the conference over to your speaker today, Atabak Mokari. Please go ahead.

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 fourth quarter and providing a corporate update. The copy is available at corcept.com. Our complete financial results will be available when we file our Form 10-K with the SEC. Today's call is being recorded. A replay will be available on 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 might cause actual results to differ materially from those statements express or imply. These forward-looking statements are described in today's press release and the risks and uncertainties that may affect them are described in our Annual Report on Form 10-K and our quarterly reports on Form 10-Q. Please refer to those documents for additional information regarding these forward-looking statements and the factors that may affect them. We disclaim any intention or duty to update forward-looking statements. Our revenue in the fourth quarter of 2021 was $98.8 million, an increase of 15% compared to the prior year period. We expect our growth to continue and have provided 2022 revenue guidance of $400 million to $430 million compared to 2021 revenue of $366 million. GAAP net income was $32.1 million in the fourth quarter and $112.5 million for the full year 2021. Non-GAAP net income, which excludes non-cash expenses related to stock-based compensation, the utilization of deferred tax assets, together with related income tax effects was $42.6 million in the fourth quarter and $149.5 million for the full year. Our cash and investments of $335.8 million at December 31 reflects the purchase of 10 million Corcept shares, or about 9% of our shares outstanding for $207.5 million in the fourth quarter. And now, Charlie Robb, our Chief Business Officer will provide a legal update.

Thank you, Atabak. I'll begin by reminding everyone that in December of last year, there was an important positive development in our dispute with Teva Pharmaceuticals. As many of you know, 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. Two years ago, in the midst of our Federal Court litigation, Teva challenged one of our patents, the 214 patent before the Patent Trial and Appeals Board in a procedure known as post-grant review, or PGR. In November of 2020 the PTAB rejected Teva's arguments, upholding the 214 patent in its entirety. Teva appealed its loss to the Federal Circuit Court of Appeals, where in December this past December, it lost again. The deadline for Teva to file further appeals or seek reconsideration of its claims has passed. This matter is closed. This now final determination by the PTAB means that Teva is barred from challenging the 214 patent's validity in District Court and so is reduced to arguing that its proposed product would not infringe, a position we believe has no legal or factual support. So where do things stand? Last April the District Court granted us permission to file for summary judgment based on Teva's infringement of the 214 patent. Teva responded by filing its own summary judgment motion. Summary judgment, as a reminder, is a procedure whereby courts can decide a case without holding a trial. We believe the court has all it needs to decide this case in our favor. If it grants our motion, we will have won. Teva will be barred from marketing generic Korlym until the 214 patent expires in 2037. If the court rules in Teva's favor, we will proceed to trial, perhaps sometime this year. There is at present no timetable for the court summary judgment ruling, no trial date and no schedule for any trial-related activities. In March 2021, we sued another ANDA filer at Hikma Pharmaceuticals, in the same Federal District Court that is hearing our case against Teva. In this matter, the court has set a fact discovery deadline of July 1. 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 past two years have shown how sensitive the growth of our commercial business is to pandemic conditions. Public health restrictions and precautions taken by patients and physicians make it more difficult for physicians to identify, diagnose, and optimally treat all of their patients, especially those with complex disorders, such as Cushing syndrome. Having acknowledged the challenges posed by the pandemic, I want to stress how optimistic we are about the present and the future of our Cushing syndrome business. Our Cushing's syndrome business is built on a strong foundation and effective lifesaving medication promoted by a dedicated commercial team that puts the interests of patients first. Leading endocrinologists increasingly believe that there are substantially more patients with Cushing syndrome than was once assumed. For many of these patients, Korlym is an excellent treatment. As pandemic conditions and fears recede, as they already have in certain locations, we expect our growth to continue and we are providing 2022 revenue guidance of $400 million to $430 million. We are also extremely optimistic about our clinical development programs. We have said for years that cortisol modulation has the potential to help treat many serious diseases. In 2021, the data generated by our ovarian cancer and NASH programs provided evidence of cortisol modulation's broad application. In 2022, we will see important results for many of our ongoing clinical programs. These programs are examining lead candidates from our portfolio 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 don't cause some of Korlym's most serious off-target effects. Beyond sharing the qualities of strong cortisol modulation and not binding to the progesterone receptor, preclinical and clinical testing have shown that our molecules behave differently from one another in important ways. Some cross the blood-brain barrier, others do not. Some perform best in models with 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 in a wide variety of disorders, including ovarian, adrenal, and prostate cancer, anti-psychotic-induced weight gain, NASH, and, of course, Cushing syndrome. We plan to start a Phase II trial in patients with ALS in the second quarter and have additional compounds in Phase I and preclinical development. Korlym's commercial success has provided the funds to advance all of these programs. Our oncology program is testing three anti-cancer mechanisms, first postulated by investigators at the University of Chicago and confirmed by other prominent researchers. One mechanism is increasing apoptosis, that program cell death when chemotherapy is meant to induce in solid tumors. Cortisol suppresses apoptosis, meaning cortisol works against the beneficial effects of chemotherapy. In our successful trial in women with advanced ovarian cancer, the addition of our selective cortisol modulator relacorilant enhanced the effect of chemotherapy likely by blunting cortisol's anti-apoptotic effect. While these patients' disease had progressed on two or more previous lines of treatment, relacorilant appears to re-sensitize some of these patients to the beneficial effects of chemotherapy. 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. Sixty 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. Fifty-eight women received a lower daily dose in combination with nab-paclitaxel, we call this the continuous arm. And sixty women received nab-paclitaxel alone, which is the comparator arm. The trial's primary endpoint was progression-free survival or PFS. The women who participated in our study were very ill and included those with platinum-refractory disease; all had experienced disease progression despite prior lines of therapy. Their median number of prior treatments was three. The results we presented at the European Society for Medical Oncology, ESMO, congress clearly showed relacorilant providing benefits 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 for the progression-free survival results, at that time the women in the intermittent arm exhibited a median OS of 12.9 months compared to 10.4 months in the comparator arm. Safety and tolerability data for the two groups were comparable. We had expected that we would be able to present final overall survival results from this study last quarter. We currently expect that the primary analysis of the overall survival data will be available later this quarter. We are quite heartened that women in our study have been living longer than we and our investigators anticipated. We received very positive feedback from leading gynecological oncologists regarding the promise of relacorilant as a potential treatment for disease. In their view, relacorilant's potential benefit in delaying disease progression without increased side-effect burden would constitute an important medical advance. We plan to meet with the FDA in the coming months to discuss the optimal path forward. Our second mechanism by which cortisol modulation is useful is by blocking an important tumor growth pathway. Cortisol stimulation is a major reason why patients with metastatic prostate cancer treated with widely prescribed androgen receptor antagonist, enzalutamide, eventually experienced resurgent disease. Deprived of androgen stimulation, their tumors switched to cortisol activity to stimulate growth. Our hypothesis is that adding a cortisol modulator to androgen deprivation therapy will close this tumor escape route. We recently completed enrollment in our dose-finding study of our selective cortisol modulator exicorilant combined with enzalutamide in men with castration-resistant prostate cancer. Investigators at the University of Chicago are conducting a similar study of relacorilant combined with enzalutamide in the same patient population. We expect to select an optimum dose of either relacorilant or exicorilant to take forward in the second quarter of this year. Our third therapeutic mechanism aims to reduce cortisol's suppression of the immune system, a quality of cortisol that likely blunts the effectiveness of immunotherapy. We are conducting an open-label Phase Ib trial of relacorilant combined with the PD1 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 syndrome, a usually quickly lethal combination. Pembrolizumab is rarely effective as monotherapy in these patients. We believe that cortisol excess may be counteracting the intended effects of pembrolizumab, which is to stimulate the immune system. Our trial is evaluating whether relacorilant can treat these patients' Cushing syndrome by reducing cortisol activity and 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 of this study is objective response rate with secondary endpoints including progression-free survival, duration of response and overall survival. I'll now turn to our programs in metabolic disease and the recent findings of our selective cortisol modulator, miricorilant, in patients with NASH, a serious liver disorder. Patients who received miricorilant in our Phase II trial exhibited large rapid reductions in liver fat, but also substantial transient elevations of liver enzymes ALT and AST. The improvement in liver fat in these patients was greater and occurred much more rapidly 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 ranging from 38.5% to 73.8% after receiving miricorilant for just a month. It may be that the rapidity of miricorilant's fat-reducing effect caused the patients' ALT and AST to rise. One way the liver shifts fat is by metabolizing it into fatty acid, which in excessive amounts irritates the liver. Interestingly, lipids in the blood of these patients did not increase, providing support to the idea that miricorilant caused the excess fat to be metabolized within the liver. The goal of our Phase Ib dose-finding trial in patients with presumed NASH is to identify a dosing regimen that significantly reduces fat without causing excessive liver irritation. We are also evaluating miricorilant as a potential treatment for patients with another serious and widespread disorder, anti-psychotic-induced weight gain. In the United States, six 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 medications 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 II. I'm pleased to say that enrollment in GRATITUDE II is complete and we expect GRATITUDE to be fully enrolled by mid-year. These trials seek to build on the positive data from our study of miricorilant in healthy subjects. In 2020, 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 than in ALT and AST, which typically exhibit sharp transient increases at the start of olanzapine therapy. A paper describing these results was published in the Journal of Clinical Psychopharmacology. The GRATITUDE trial has a planned enrollment of 100 patients and is evaluating whether miricorilant can reverse recent antipsychotic-induced weight gain. 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 II study enrolled 150 patients and is testing miricorilant as a treatment for long-standing antipsychotic-induced weight gain. Patients with schizophrenia will receive, in addition to their established dose of antipsychotic medication, either 600 milligrams, 900 milligrams of miricorilant, or placebo for 26 weeks. GRATITUDE II is being conducted at 35 centers in the United States. The primary endpoint in both studies is reduction in body weight. Other important measures of metabolic activity will also be examined. We look forward to the data readouts from both trials, which we expect in the fourth quarter. As most 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 intravitreal thickening and vaginal bleeding. By a different mechanism, relacorilant also does not appear to cause hyperkalemia, low potassium, a serious side effect experienced by 44% of patients in Korlym's pivotal trial. Korlym-induced hyperkalemia 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 syndrome. There were no relacorilant-induced instances of endometrial thickening or vaginal bleeding and no drug-induced hyperkalemia. The trial results were published in Frontiers in Endocrinology. Our GRACE trial has a planned enrollment of 130 patients with any etiology of Cushing 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 syndrome, which we plan to submit in the second quarter of 2023. Our second Phase III trial GRADIENT is studying relacorilant impacts in patients whose Cushing's syndrome is caused by adrenal adenomas or adrenal hyperplasia. Patients with this etiology of Cushing 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 a first-controlled study dedicated solely to patients with this type of Cushing's syndrome. While we do not expect our NDA in Cushing 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 dazucorilant, previously known as CORT 113176, which has shown promise in animal models of ALS. We have been refining our development plans with leading clinicians in the United States and Europe and plan to initiate a Phase II trial in the second quarter. We expect our commercial growth to continue as pandemic conditions improve. 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 that cortisol modulation can treat many serious disorders. I believe our development programs have provided a growing body of evidence. Korlym for patients with Cushing syndrome is one example of cortisol modulation's benefit. In 2021, the data generated by our ovarian cancer and NASH programs provided evidence of cortisol modulation's broad application. In 2022, we expect to see very important clinical results. Our oncology program is evaluating two of our proprietary cortisol modulators and three tumor types: ovarian, prostate and adrenal. Our metabolic program is following up on encouraging clinical data in NASH and antipsychotic-induced weight gain. We continue to enroll patients in our Phase III trials of relacorilant in Cushing syndrome. Next quarter, we will start a Phase II trial using another one of our proprietary compounds, dazucorilant, to treat patients with ALS. Additional proprietary compounds are advancing toward the clinic. This is an exciting time at Corcept. I'd like to thank our employees for their tremendous effort and dedication. We are expanding our team to support what we believe is a substantial commercial opportunity and an incredibly broad and strong pipeline. I'll stop here for questions.

Thank you. Our first question comes from Matt Kaplan with Ladenburg Thalmann. You may proceed with your question.

Hi, good afternoon, and congrats on the progress. I just wanted to follow up on the legal update. What's your sense in terms of the potential timing for the summary judgment motion decision?

Well, hi, Matt. The answer to that is both simple and unsatisfying. I have no idea. We had a new judge appointed some time ago, and new judges typically take a while to get acclimated; they already have a backlog, and criminal cases take precedence over civil ones. Overall, things have been very quiet, and we just can't provide an update.

Okay, fair enough. And then in terms of your clinical development programs, what's your current thinking or current plan for the pivotal study in ovarian cancer? And I guess, what do you propose to look like to the FDA when you meet with them?

Great. Thanks very much. First and foremost, I'm really excited about 2022, because I've even told my team that this is going to be an epic year for not only development but for Corcept, because there are a lot of ongoing trials and we will see results throughout this year that may move this company forward. One of those being in ovarian cancer. Our plan for the next study in ovarian cancer is going to be with the intermittent dose of relacorilant plus nab-paclitaxel in a controlled study versus investigator choice of treatment. While the study will be larger than our Phase II trial, we plan to have approximately 360 patients, but we basically just want to replicate the great results we saw in Phase II where we saw statistically significant improvements in PFS. We actively work with two leading organizations, one being the GOG, which is the gynecological oncology group here in the US, and another being ENGOT, which is the European Network of Gynecological Oncologist Trial Group in Europe. Collectively they are both very excited to partner with us in starting this trial, and we plan to start this trial in the second quarter.

Great. Okay. Thanks for taking the question.

Thanks, Matt.

Thank you. Our next question comes from Chris Howerton with Jefferies. You may proceed with your question.

Great. Thanks so much and congratulations on all the progress. I have just two quick questions. One is about the Phase III GRACE trial. I know you covered the high-level design, but could you help us understand the timelines leading up to your expected NDA submission in the second quarter of 2023? What gives you confidence in those timelines? My second question is regarding the commercial business and the guidance you expect. To what extent do you anticipate dose titration and in-person visits being a continued challenge, and how has that influenced your outlook for the top-line numbers next year? Thank you.

Thanks, Chris. I think we got both of your questions, but if need clarification let us know. The first question, let me turn you back to Bill to talk about the GRACE trial.

For the GRACE trial we're driving towards our timeline of submitting an NDA in the second quarter of 2022. Here at Corcept we're taking an all-hands-on-deck approach with the Corcept team internally as well as with our partnership with investigators to drive towards those timelines. Just recently, we've completed two investigator meetings, one in the US and one in Europe. Both meetings were very successful because we personally saw the engagement of each investigator and their excitement for the trial. Most importantly, their commitment to increasing recruitment for this trial to help us drive towards those timelines.

Hey, Chris. Just one small thing, I think Bill said 2022 for the NDA. Let me next turn this over to Sean Maduck, who runs all of our hypercortisolism business commercially, and I think has got the answer to your question.

Thanks, Joe, and thanks Chris for the question. As you all know, forecasting revenue during the pandemic has been and continues to be challenging. We're confident that the forecasting range we put forth accounts for both internal and external drivers that we believe have the potential to impact our whole business. It's something I've said in the past, in-person visits matter. It's really a key driver for our business, both for patients and for specialists. As restrictions continue to ease, we're going to be able to engage more frequently with physicians, and more patients are going to be screened, which ultimately we believe will lead to more follow-on discussions. We are seeing an improvement in access after the Omicron surge back at the end of last year and through the first part of this year. The only other thing I'll touch on briefly is dose, as you brought that up. I want to remind everybody, just on previous calls, we've talked a little bit about how we had seen a modest decrease in our average dose. I mean, over the course of the pandemic, and we were concerned that patients were not being optimally treated. We've actually seen that dose decline stabilize, and in fact, we've seen a modest reversal of that trend. So positive on both fronts.

Excellent. That's fantastic. I really appreciate it. And I don't know if you let me, but I do have another quick question if you wouldn't mind.

Yeah. Go ahead, Chris.

Great. Yes, I was reminiscing about when I started covering the company a couple of years ago, and we discussed urinary biomarkers related to the activity of Korlym and glucocorticoid receptor blockade. As we approach the GRACE finish line, I was curious if there's any update or progress in evaluating glucocorticoid receptor blockade in a clinical setting.

Yeah, Chris. At the risk of taking people off a little bit into the scientific weeds, I'm really pleased that A, you remember that, and B, to give me a chance to really talk about just a little bit. What Chris is really referring to is that all of the measures we have now in cortisol are all cortisol levels, the amount of cortisol in the urine, blood, or saliva. But they don't really represent one thing that’s truly important, which is the amount of cortisol activity. It really stems from the fact that patients who have modestly elevated cortisol levels can actually have very bad symptoms of Cushing syndrome, and people with pretty high cortisol levels can have only moderate symptoms of Cushing syndrome. Clearly, what matters is the activity at the gene level, and so we began to work on a specific gene, which is activated by cortisol, called FKBP5, that's the name of the gene. Although we haven't talked about it in a while, research has continued, and there was a very interesting publication from late last year where we were really able to demonstrate a study up surgically treated patients with Cushing's disease that FKBP5 levels are, in fact, quite predictive of successful surgery and then decline to normal levels with surgery, and if the surgery is unsuccessful, they don't decline. So that measure is actually being captured, Chris, in all of our studies, and we think it's really a potentially very important advance for both diagnosing and treating patients with Cushing syndrome. I don't have anything further to tell you except that the research continues. Since I know you're an avid reader of the scientific literature, if you ping us, I'll be sure to send you a copy of the published paper.

Okay. Well, that's fantastic. I really appreciate it, Joe. Thanks so much.

Sure.

Thank you. Our next question comes from Greg Fraser with Truist Securities. You may proceed with your question.

Good afternoon, folks. I was wondering if you could comment perhaps higher level on Korlym demand trends year-to-date and whether you've seen any breaks from the typical trends that you see early in the year that might be pandemic-related.

Yeah. I'm going to just turn it back to Sean just so everyone knows who speaks.

Hi, Greg. Thank you for your question. I'll address the impact of Omicron on our business. It definitely had an effect at the end of 2021 and the beginning of this year. Similar to previous periods during the pandemic, restrictions increased, making it more challenging for us to engage with physicians and for them to meet with patients, which is crucial for our business. Another notable aspect of this wave is that some of our field employees contracted the virus due to Omicron's rapid spread. Thankfully, everyone is vaccinated and recovering, but they needed to quarantine, which affected their time in the field and some regular promotional activities. On a positive note, the surge was quick, unlike the prolonged effects of Delta, and we are seeing improvements rapidly. Restrictions are beginning to ease across the country, our sales personnel are healthy again, and things are gradually returning to normal. We are optimistic about continuing down this positive path.

Got it. That's helpful. I know it's early days for Recorlev, but I'm curious if any feedback has come through your sales team on how docs are viewing that drug? And whether there has been a counter-detailing of the Korlym that you've heard about?

It's very early with Recorlev, and we have not heard that feedback, but I'll say both with Recorlev and historically to this date we have not seen any impact on our business. Interestingly, we're happy that other companies are out there educating physicians on the illness, on hypercortisolism, and on proper screening, because this improves patient care overall.

Got it, okay. And then for prostate cancer, once you select the optimal dose of either exicorilant or relacorilant in the second quarter, will you then move immediately into a Phase II study this year?

Thank you for that question. We're going to take a look at both of the study data in the second quarter of this year and make that decision. It depends upon which drug we choose. Both drugs we're excited about, exicorilant and relacorilant, but we will evaluate the safety data and efficacy data we get from that trial, and then we will determine internally what the best path forward is for us to take either one of those drugs into a Phase II trial. The plan would be, yes, we would go to the next trial with one of the drugs and pick the optimal dose.

Great. Thank you.

Thank you. Our next question comes from Tazeen Ahmad with Bank of America. You may proceed with your question.

Hi, good afternoon, and thank you for taking my questions. Could I ask two? The first would be on the GRATITUDE studies. Can you just remind us, Joe, about what is the average amount of weight gain a patient endures during treatment with antipsychotics? And is there a minimum amount of weight loss that you think would be needed to be clinically meaningful, just based on your conversations with physicians? And then the second question is on ovarian cancer. So you did give some guidance on what you think the trial design will be for the pivotal study, but is there anything that you would want to wait to see from your upcoming update of the Phase II data, which is due later this quarter? Or I think you're going to have updated overall survival data that you would need to potentially tweak that trial design for the pivotal? Thank you.

Tazeen, thank you. I think I do understand both your questions. I know you’ve been with the company for a long time. I'm a psychiatrist by training, so weight gain and metabolic issues are very close to me, because these are my patients and they need to take antipsychotic medications, which are often very effective for psychosis, but really have tremendous metabolic drawbacks. It is rare for patients not to gain weight and sometimes the weight gain is, I think you'd be surprised. I personally have had patients gain between 50 to 100 pounds on these medications. Weight gain tends to be rapid, which is why there is actually a real issue about treating healthy people in Phase I studies for very long. The average weight gain that we saw in two weeks in patients in our healthy studies is about 10 pounds, which would obviously be problematic for all of us. So it's a very potent effect and a great concern to all treating psychiatrists. You asked me a question which is a little harder to answer, which is how much weight loss would actually be beneficial to patients. I'm not sure of the exact answer, but weight loss would be looked at in the context of what other metabolic effects occurred. It’s not just the amount of weight—it's all the other things that happen when people gain weight. This is the first study we've actually ever done in patients, and I think we're going to learn a tremendous amount regarding how the drug works and how patients respond to it in terms of tolerability and efficacy.

Thank you for that question. Regarding the overall survival data, we have a solid regulatory path forward with or without the OS data based on what we have today. I’ll remind you that we saw great results from the Phase II study showing that the intermittent arm of relacorilant plus nab-paclitaxel showed statistically significant improvements in PFS, which will be the primary endpoint of our next study as well. That’s the key piece there. Additionally, back to OS, this study, the Phase II study was not powered to show a difference in OS. To be honest, no study or drug has shown a statistically significant improvement in overall survival in these patients with recurrent platinum-resistant ovarian cancer. If we were to see a significant difference in OS, that would be unprecedented and very positive. We'll see when we reach that total when we get the total events of 120 events, which we hope to see later this quarter.

Okay. And would that be in a press release that you would reveal some updated data?

Once we get the data, we will make it available as soon as we get it.

Okay. Excellent. Thanks for taking my questions.

Thanks, Tazeen.

Thank you. Our next question comes from Michelle Gilson with Canaccord Genuity. You may proceed with your question.

Hi, thank you for taking my question. So I was hoping that you guys could give us a better sense of what's in the guidance and what might get you to the high end of that guidance and some of the factors that you considered in there? And then you spoke already about the in-person interactions and the dose starting to normalize or trends towards the dose starting to normalize from what you've seen previously prior to COVID, but I was wondering if you are also seeing any upticks in terms of the diagnoses of patients with Cushing syndrome, and maybe some of those COVID delays in diagnosis starting to subside?

Michelle, thank you, and I'm going to turn this over to Sean again.

Perfect. Thank you for the question, Michelle. In terms of the first question of the range, interactions are really an important part of it. We’re assuming we’re going to see easing of some of the restrictions that have existed for quite a window of time, where practices have been closed to specialists and in some cases their patients. The piece that I haven't touched on yet today is our field expansion that actually undertook prior to COVID. We scaled up our sales force; they were new to the field and immediately they were basically at home and not able to go into the field. With the opening up of the country, we're going to have more specialists actively calling on physicians than we've ever had. I believe that will also add to the value and the ability to educate more physicians and thus see more patients being screened. In terms of diagnosis, patients when they are able to see their doctors and their physician has been educated on this, they are actively being screened. During COVID that was not occurring, because it takes many visits to take a patient from concern to diagnosis through the multitude of tests and following the guidelines. As restrictions ease, these patients are seeing their physicians more frequently and through that are able to get the multiple tests they need. We have seen an increase in diagnoses.

If I can also ask a question on relacorilant. Previously you've said that the market for relacorilant would expect to be substantially larger than the market for Korlym. Could you expand on that a bit more, sort of the biggest drivers you would expect for relacorilant to be able to grow the market if it’s persistence or patients dropping off, coming back on, or patients that never have considered Korlym that maybe would consider relacorilant?

Yes, Michelle, I'm glad you asked, and it's an important question. First, I know we have listeners with various levels of understanding; Korlym is an excellent medication for people with hypercortisolism. It really turns that down in a way that creates a more normal situation. I just remind people that when we did our clinical study, which got the drug approved, 87% of the patients experienced substantial clinical improvement as adjudicated by outsiders. So it works effectively. Unfortunately, Korlym has an active ingredient that is not specific for cortisol; it does a couple of things that are problematic. One is it is a potent progesterone receptor antagonist, which as you know has been associated with termination of pregnancy or abortion, and we wanted to take away that problem. Our wonderful Head of Medicinal Chemistry, Hazel Hunt, was able to create three different series of compounds, one of which relacorilant comes from, that does exactly that—potent cortisol modulation with no effect on the progesterone receptor. Moreover, it turns out that relacorilant does not seem to cause hyperkalemia, a manageable problem with Korlym. This creates ease of use. I also think the political toxicity tied to the idea of termination of pregnancy will no longer be an issue with relacorilant.

Great. Thank you. And maybe if I can just ask one more. The Phase Ib that you're running in NASH, the dose exploration study—are you starting to see anything in that study so far that's validating your hypothesis of the LFT signals may be related to the magnitude or rapidity of the reductions you saw in the Phase II around the liver fat reductions?

Michelle, I'm going to have to keep you on the edge of your seat. We do actually have information; it's an open-label study, but we will resell all that information only after it's accumulated.

All right, thanks for taking my questions.

Sure.

Thank you. Our next question comes from Arthur He with H.C. Wainwright. You may proceed with your question.

Hey, good afternoon, Joseph. Thank you for taking my question. So I just follow up on the NASH study. Could you give us more color on the enrollment status for the dosing escalation part?

Sure. For the enrollment status, our Phase Ib study started with multiple cohorts looking at lower doses of miricorilant. Each cohort was gated by evaluation safety and efficacy every six weeks, and we saw great enrollment at the end of the year and even at the beginning of this year. We see great excitement from the investigators and for patients in this trial, so we're seeing good steady enrollment for this trial.

I'll just add to that, Arthur. The important thing is we really think we have hope for a big one here. We really do think this medication is very potent. All the investigators we work with have described it as perhaps not just a potent medication, but the most potent medication that we have ever seen for liver metabolism. So we really do think it's worth doing the work to get it to as precise a dose as possible to provide the maximum benefit with the greatest ease of use. I'll reiterate Bill's point: we've had no trouble attracting people to be in this study. I think it offers real benefit in this space, and we're going to work hard to get some fast results.

Thank you for that additional color. Regarding the GRATITUDE study, besides the weight data, could you remind me if there's any biomarker data we can get from the data update later this year?

Yes, the answer is all of the standard metabolic measures, like triglycerides and lipids and so forth. All of those things are being measured in the study. And again, as a practitioner, I can tell you all of them are meaningful.

That's great, thanks for that. The last one I would want to pick up your brand for—considering the current macro environment—what's your appetite for the BD idea?

Well, I was wondering when someone would ask us that question. The answer is that we have good business; we produce enough money to run our development programs. So I just want to get you to the bottom line. We get pitched ideas on a very regular basis. The most important understanding is we really like what we're doing. We think our development program is terrific and it's going to provide a benefit to many different types of patients. It is by far our highest priority to ensure that this program reaches the finish line and get us the best results we can without being distracted from that in the optimal way. So yes, we look at a lot of things that come in the door. Some are easy to dismiss, some require more thought, and then obviously some may provide a very attractive opportunity that we need to give serious consideration. But keep in mind, that's not our priority; our priority is to optimize cortisol modulation and all the diseases we feel we can effectively treat.

Sounds great. Thank you. Thank you for answering my questions.

Thank you. Our next question comes from Greg Fraser with Truist Securities. You may proceed with your question.

Thanks for taking the follow-up. I just want to see if there's been any progress or if there is anything new to report on the New Jersey, USA investigation? Thanks.

Yeah, I'm happy to answer that. There have been no developments to report. But I think there are a couple of things that folks should keep in mind. Back in December of last year, we disclosed that we received a document subpoena from the Department of Justice, actually the New Jersey US Attorney’s Office that seeks documents related to our commercial business, our relationships with health care providers, our promotional practices regarding Korlym, and prior authorization information, things of that nature. It's important to keep in mind that the subject matter covered by those documents is the same as the sort of swirl that has been around us for years, starting with the short-seller report published back in January 2019, leading to a class action suit that we are currently addressing. The first thing to keep in mind is that it's a whole ecosystem. Second, while it is common to say, as is true with us, that we are cooperating fully with the government's investigation, we want things to move as quickly as possible. We are producing documents and information to the Department of Justice as fast as we can. Our goal is always to be ahead of that because we believe that a prompt submission of all the facts will yield the best outcome for Corcept and our shareholders.

Great, thanks for the update.

Thanks to all who tuned in. Thank you very much. We'll talk to you in another quarter. This is really a very exciting year for Corcept. If you're just being introduced to the company, this is a good time to take a serious look. We'll talk to you in another quarter. Thank you very much. And have a good rest of the day.

Thank you. This concludes today's conference call. Thank you for participating. You may now disconnect.