Corcept Therapeutics Inc Q3 FY2022 Earnings Call

Good day, and thank you for standing by. Welcome to the Corcept Therapeutics Conference Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Atabak Mokari, CFO. 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 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 forward-looking statements are described in today's press release and the risks and uncertainties that may affect them are described in the press release and in our annual report on Form 10-K and our quarterly reports on Form 10-Q. Please refer to those documents for additional information. We disclaim any intention or duty to update forward-looking statements. Our revenue in the third quarter was $101.7 million compared to $96.1 million in the third quarter of last year. Net income was $34.6 million, or $0.30 per common share in the third quarter compared to $30.5 million or $0.24 per common share in the same period last year. Our cash in investments at September 30th is $401.2 million, an increase of $19 million in the quarter. We expect our revenue growth to continue and I've tightened our 2022 revenue guidance to $400 million to $410 million. I will now turn the call over to Charlie Robb, our Chief Business Officer to provide an update on our litigation with generic manufacturers Teva and Hikma Pharmaceuticals.

Thanks Atabak, I have little to report. 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. That lawsuit is still underway, although there has been no activity for more than a year. In the second quarter of 2021, we filed for summary judgment based on Teva's infringement of our 2014 patent. Teva, as expected, responded by filing its own summary judgment push. Summary Judgment is a procedure whereby courts decide a case without holding a trial. The court has not responded to these motions. Remember that Teva challenged the validity of the 214 patent, the basis of our summary judgment motion at the Patent Office and lost, which means it cannot challenge the 214 patent's validity in district court. As a result, the only defense to our summary judgment motions that it proposed is that its product would not infringe, a position we believe has no support. If the court decides the pending summary judgment motions in our favor, Teva would be barred from marketing generic Korlym until 2037 when the 214 patent expires. If the court rules in Teva's favor, we will proceed to trial, most likely sometime next year. There's no timetable for the summary judgment motion ruling, no trial date and no schedule for any trial-related activities. In March 2021, we sued another filer, Hikma Pharmaceuticals, and discovery in that case is scheduled to continue in April 2023. No trial base has been set. With respect to both Teva and Hikma, we are confident in the strength of our legal position. Now, I'll turn the call over to Dr. Joseph Belanoff, our Chief Executive Officer.

Thank you, Charlie. Our Cushing’s Syndrome business is built on a solid foundation, a lifesaving medication promoted by a commercial team that puts the interests of patients first. Diagnosing and treating patients with a complex disease such as Cushing's Syndrome requires frequent input of in-person contact with patients. Revenue in the third quarter was affected by fewer than expected in-person interactions, as many physician practices have not returned to pre-pandemic patterns of activity. To reflect this near-term challenge, we are tightening our 2022 revenue guidance to $400 million to $410 million. We remain extremely optimistic about the present and the future of our Cushing's Syndrome business. Korlym is an excellent treatment for patients with Cushing's Syndrome and leading endocrinologists increasingly believe there are considerably more patients with Cushing's Syndrome than was once assumed. We are making substantial investments to improve the screening and treatment of these patients and we are confident these initiatives will contribute to our results in the coming quarters. We are also very encouraged by the potential of our clinical development programs. Our clinical trials continue to advance and generate data supporting cortisol modulation's broad therapeutic potential. We are very excited about our most recently initiated studies: ROSELLA, our confirmatory Phase 3 trial in platinum-resistant ovarian cancer and DAZALS, our Phase 2 trial in ALS. We are also looking forward to important readouts from our two Phase 2 trials in antipsychotic-induced weight gain by the end of this year. Our portfolio of more than a thousand proprietary molecules, together with funds provided by our commercial success, will allow us to further broaden our therapeutic areas of interest. All of our compounds modulate cortisol's effects by binding to the glucocorticoid receptor, or GR. They do not bind to the progesterone receptor and so don't cause some of the serious off-target effects seen with other approved products. Interestingly, while all of our compounds modulate cortisol's activity without modulating progesterone's activity, they are not identical. Some cross the blood-brain barrier, others do not. Some perform best in models of solid tumors, others are more potent in models of metabolic disease. Some appear to be tissue-specific, others have more global effects. These diverse qualities allow us to study a wide variety of disorders. Currently, we are conducting programs in ovarian, adrenal, and prostate cancer, ALS, antipsychotic-induced weight gain, NASH, and of course, Cushing's Syndrome. We are also investigating cortisol modulation's role in other diseases and additional compounds in clinical and preclinical development. Our Cushing's Syndrome business has funded all of these activities and will continue to do so. Our oncology program is testing three anti-cancer mechanisms, first posited by investigators at the University of Chicago and later confirmed by other prominent researchers. One mechanism is increasing apoptosis, programmed cell death that chemotherapy is meant to induce in solid tumors. Cortisol works against the beneficial effects of chemotherapy by suppressing apoptosis. In our successful controlled Phase 2 trial in women with platinum-resistant ovarian cancer, the addition of our selective cortisol modulator relacorilant enhanced the effect of chemotherapy by slightly blunting cortisol's anti-apoptotic effect. Relacorilant provided meaningful benefit to many of the women in our study. While these women's disease had progressed on two or more previous lines of treatment, including previous Taxanes, relacorilant appeared to resensitize some of them to chemotherapy’s beneficial effects. Those who received relacorilant intermittently, the day before, the day of, and the day after they received nab-paclitaxel, exhibited a statistically significant improvement in progression-free survival and duration of response compared to the group who received nab-paclitaxel monotherapy. While the study was not powered to show a difference in overall survival, women in the intermittent relacorilant group also lived longer than those in the comparator group with a P value that approached statistical significance. I remind you that to date, no approved therapies have demonstrated an overall survival benefit in patients with platinum-resistant ovarian cancer. In addition, the women who received relacorilant plus nab-paclitaxel experienced no additional side effect burden compared to those who received nab-paclitaxel alone. Results from this study were featured in multiple podium presentations at the 2021 and 2022 European Society for Medical Oncology, ESMO meetings and at the 2022 American Society of Clinical Oncology, ASCO Annual Meeting. ROSELLA, our pivotal Phase 3 trial in platinum-resistant ovarian cancer is active and enrolling patients. ROSELLA's design closely tracks our Phase 2 study with planned enrollment of 360 women randomized one-to-one to receive either relacorilant plus nab-paclitaxel or nab-paclitaxel alone. The primary endpoint will be progression-free survival with overall survival being a key secondary endpoint. We are conducting the study in collaboration with leading clinicians from the Gynecologic-Oncology group in the United States and the European Network of Gynecological Oncology Trials Group in Europe. Our goal in Phase 3 is simply to replicate our positive Phase 2 results. Leading gynecological oncologists have communicated to us that in their view, relacorilant's potential benefit in improving survival without increased side effect burden would constitute an important medical advance, and relacorilant plus nab-paclitaxel has the potential to become a new standard of care in women with platinum-resistant ovarian cancer. 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 prostate cancer treated with a widely prescribed androgen receptor antagonist Enzalutamide eventually experience resurgent disease. Deprived of the androgen stimulation, the tumor switches to cortisol activity to stimulate growth. Our hypothesis is that adding a cortisol modulator to androgen deprivation therapy may close this tumor escape route. Next year, in collaboration with the University of Chicago, we will begin a randomized placebo-controlled Phase 2 trial of relacorilant plus Enzalutamide in patients with prostate cancer early in their course of treatment before they have had their prostatectomy. Our mechanism of cortisol modulation seeks to treat tumors by enhancing the body's immune response. Cortisol suppresses the immune system, which may blunt the effectiveness of cancer therapies intended to stimulate immune response. Our hypothesis is that adding a cortisol modulator to immunotherapies, such as checkpoint inhibitors, may increase the effectiveness of those therapies. We are conducting a Phase 1b 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, which is usually a quickly lethal combination. Pembrolizumab alone is rarely effective in treating this form of adrenal cancer. Our trial is evaluating relacorilant as a treatment for these patients' Cushing's Syndrome by reducing excess cortisol activity and by reversing cortisol-induced immune suppression, allowing pembrolizumab to achieve its own cancer-killing effect. We plan to enroll 20 patients at sites across the United States. The primary endpoint of the study is the objective response rate, with secondary endpoints including progression-free survival, duration of response, and overall survival. I'll now provide an update on our ALS program. ALS, commonly known as Lou Gehrig’s disease, is a devastating illness with an urgent need for better treatment. We are excited that we have initiated DAZALS, a 198 patient randomized double-blind placebo-controlled Phase 2 trial of Dazucorilant in patients with ALS. Dazucorilant is a selective cortisol modulator that crosses the blood-brain barrier and has shown great promise in animal models of ALS, improving motor performance and reducing neuroinflammation and muscular atrophy. We're conducting this important study in collaboration with TRICALS, the leading ALS academic consortium in Europe. Next, I'll turn to our programs in metabolic disease, which will produce important data soon. We are conducting two double-blind placebo-controlled Phase 2 trials of miricorilant, GRATITUDE, and GRATITUDE II in patients with antipsychotic-induced weight gain, a serious and widespread disorder. 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 effective, they often cause rapid and sustained weight gain, as well as cardiovascular and metabolic diseases. The burden on patients is severe. The average life expectancy of patients in the United States who take antipsychotic medication chronically has decreased by 20 years. These side effects also dissuade many patients from adhering to their treatment regimen. The GRATITUDE trial aims to build on positive data from our study of miricorilant in healthy subjects. In 2020, we completed a trial where 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 the liver enzymes ALT and AST, which typically exhibit sharp transient increases at the start of olanzapine therapy. A paper describing these results was published last year in the Journal of Clinical Psychopharmacology. GRATITUDE is evaluating whether miricorilant can reverse recent antipsychotic-induced weight gain, and GRATITUDE II is evaluating the reversal of longstanding antipsychotic-induced weight gain. While the primary endpoint in both studies is reduction in body weight, I also want to stress the importance of general improvement to the patients' metabolic health as an indication of the patients' condition being treated more fully. Improvements in lipids, glucose control, and markers of liver health would be highly desirable outcomes. These studies will produce important data in many areas, and we look forward to the results by the end of this year. Miricorilant is also our candidate treatment for patients with NASH, a serious liver disease that afflicts millions of patients in the United States. In our prior NASH study, patients who received miricorilant exhibited large, rapid reductions in liver fat, but also substantial, albeit transient elevations of the liver enzymes, ALT and AST. The improvement in liver fat in these patients was greater and occurred much more rapidly than we had expected, which is rarely seen over a period of treatment. Patients exhibited reductions in liver fat ranging from 38.5% to 73.8%, after receiving miricorilant for just one month. To put this in perspective, recall that the trial's primary endpoint was a 30% reduction in liver fat after 12 weeks. It may be that the rapidity of miricorilant's effect in reducing liver fat caused the patients' ALT and AST to rise. One way to reduce liver fat is by metabolizing excess fatty acids, which in excessive amounts irritate the liver. Lipids in the blood of these patients did not increase, providing support for the idea that miricorilant caused the excess fats to be metabolized immediately within the liver. The goal of our Phase 1b dose-finding study in patients with NASH is to identify a dosing regimen that captures the unprecedented rapidity and magnitude of liver fat reduction without causing excessive liver irritation. Enrollment for this trial has been robust and we plan to share its results in the first half of 2023. Finally, as most of you know, we are evaluating Relacorilant, a planned successor to Korlym for the treatment of hypercortisolism in two Phase 3 trials, GRACE and GRADIENT. Relacorilant is a selective cortisol modulator like Korlym, but achieves its effects by competing with cortisol at the glucocorticoid receptor. Unlike Korlym, it does not bind to the progesterone receptor (PR), which avoids causing PR-related side effects including termination of pregnancy, endometrial thickening, and vaginal bleeding. Korlym 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 for discontinuation. Relacorilant's Phase 2 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 reported instances of endometrial thickening or vaginal bleeding induced by Relacorilant, and no drug-induced hypokalemia. The trial results were published in the journal Frontiers in Endocrinology last year. We are currently enrolling patients with any etiology of Cushing's Syndrome and have a randomized withdrawal trial design. All patients initially received Relacorilant for 22 weeks in an open-label part of the study. Those who met response criteria are randomized to continue treatment with Relacorilant or placebo for 12 weeks. We have investigators who are eager to take this race to the finish line. We expect GRACE to serve as the basis for NDA submission in Cushing's Syndrome, which we expect to submit in the second half of 2023. Our second Phase 3 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 their health outcomes are poor. 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 upon data for GRADIENT, we do expect that its findings will help improve the care of those increasingly recognized patients. GRADIENT, a randomized placebo-controlled study, has a planned enrollment of 130 patients. To sum up, our commercial business continues to generate substantial profits, even after funding all of our development programs. We are extremely optimistic about the present and future of our Cushing Syndrome business and making significant investments to improve the screening and treatment of patients with Cushing Syndrome. We are confident that these initiatives will contribute to our results in the coming quarters and expect our revenue growth to continue. Our development programs continue to generate evidence validating our long-held belief that cortisol modulation has the potential to treat a wide range of diseases. Reducing cortisol activity is a straightforward and effective way to treat Cushing's syndrome. It is now clear that excess cortisol activity affects other very serious disorders and that cortisol manipulation can provide substantial benefits. Ovarian cancer is a prime example, but there will be others. Also, our open-label multinational trial in ALS has real promise, and we will have important data from our antipsychotic-induced weight gain program later this year as well as from our NASH program in the first half of next year. A whole academic field in the use of cortisol modulation in addiction and other issues is also being explored. In addition to relacorilant, miricorilant, and Dazucorilant, we have many other cortisol modulators in our portfolio with potentially very different clinical attributes. Our work is steadily advancing across multiple fronts. Thank you to our dedicated creative employees and our loyal investors for making this possible. I'll stop here for questions.

Thank you. At this time, we'll conduct a question-and-answer session. Our first call comes from the line of Ed Nash of Jefferies. Your line is open.

Hi, it's actually Edward Nash, Canaccord. Thanks for taking my call. I really appreciate the overall pipeline overview. I just wanted to touch on a point, Joe, that you brought up at the beginning of your comments, just talking about the limited interactions that are still occurring in the doctor's offices there. And I just wanted to understand, I guess, better understand that because we're clearly not in the peak of COVID anymore now and things have relatively gotten back to normal. It seems that a lot of the doctor's offices, if they are still doing virtual, it's because of their choice or patients’ choices. So I just wanted to understand what is going to be the push to get things back to where they need to be. Are patients really having a hard time getting appointments with the endocrinologists? Are there lab issues? I'm just trying to understand that there are a lot of moving parts, but kind of what is the overall stop gap that's really causing the problem here on growth Corcept?

Yeah. I think we really do understand your question. I just want to reintroduce you to Sean Maduck, who is the President of our endocrinology division and runs all of our commercial activities. I think he can really give you a detailed answer to that question.

Yeah, thanks for the question. As just stated, interactions really have not returned for us to pre-pandemic levels. Right now, we're not sure if they ever will. As a company, we spend a lot of time educating on disease. If physicians aren't aware of hypercortisolism and they're not aware that it could be a source of their patients' comorbidities, they don't look for it or screen for it. So we work hard and will continue to find new ways to operate in what we perceive to be this new normal, and I'm confident that we'll continue to find new and creative ways to reach our target audience. Part of your question was around, although we're not maybe in the height of the pandemic, some practices and health groups that maybe weren't always open to seeing clinical specialists in the past have taken advantage of the change in situation and closed their doors to pharmaceutical reps, which is a shame because a lot of the newest information and science is actually delivered by the industry.

Edward, what I want to emphasize is that I agree with you. When I'm out now, it seems that many things are back to pre-pandemic normal, although not entirely. As a physician myself, I can tell you that many doctors' practices have changed in character, to some degree. Our major effort in terms of sales has always relied on in-person sessions, where a physician is educated over a period of time until they begin screening patients. The reality is that while many practices, in some ways, have returned to normal, I think some practices may not ever return to what was like pre-pandemic. But it's really on us to figure out ways to make sure that education process continues in this new way. I'm confident that we have very specific ideas on how to do that. We're now accepting that this is how the world is going to be going forward, and we will operate from that perspective.

Great. Thanks so much.

Thank you. One moment for our next question, which comes from the line of Dennis Ding of Jefferies. Your line is now open.

Hey, guys, thanks for taking the question. Two questions for me, if I may. Number one, if you look at the business from a big picture perspective, you talk about your commitment, and importantly, visibility in continuing to achieve a double-digit growth profile as we look towards 2023. And then number two, maybe comment on the antipsychotic-induced weight gain trial. You're going to have some data by year-end. Remind us what you showed on percent weight loss and the level of efficacy you hope to see for the Phase 2 study? And maybe a follow-up on that, what opportunities do you see outside of AI, WG and NASH? I'd be curious to get your view on the broader applicability in much larger markets?

Dennis, it's two different areas of questioning. So let's go one at a time. The first question I would like to address, as it relates to hypercortisolism and our commercialization effort, I'd like to give you back to Sean.

Yeah, thank you for the question. I want to remind everybody about the significant growth potential that exists in this market. There is now a substantial amount of independent research that suggests that hypercortisolism is potentially far more prevalent than previously thought. We estimate there will be 30 to 40,000 patients. We are focused on unlocking our full potential. So despite some of these current challenges that we just went through, we are confident in our path to sustained growth. One of our key focus areas is to increase physician interactions, and we're going to do that by increasing the size of our customer-facing team and the support groups around that, and working to improve the productivity of that team. Another big focus area for us is really around increasing screening and referral rates by raising awareness in specialties that we believe have enriched patient populations. A couple of examples: dermatologists see a large number of treatment-resistant diabetics who do not routinely screen for Cushing's Syndrome, even though literature states that anywhere from 8% to 10% of this population may have hypercortisolism. Similarly, radiologists frequently discover renal nodules during routine abdominal scans. However, those patients are often not referred to an endocrinologist for workup, even though radiology guidelines state that they should be. So not all specialties are aware of hypercortisolism, and because of this, many patients go undiagnosed. We are very focused on changing that through various marketing channels, as Joe mentioned, using in-person, print, and digital means. Not all these patients will be perfect candidates, but some will. To sum it up, all our strategies and tactics are focused on increasing physician interactions, raising awareness of hypercortisolism, increasing patient screening, and most importantly, improving care for hypercortisolism patients.

And then Dennis, your second question has to do with our antipsychotic-induced weight gain program. I'm going to turn it over in a second to Bill Guyer, our Chief Development Officer, who is responsible for all drug development including the antipsychotic-induced weight gain aspects. But just one small point, you mentioned olanzapine; it's important to note that olanzapine is for the prevention of antipsychotic-induced weight gain, but not for weight loss. I'll turn you over now to Bill who can give you answers to your variety of questions.

Thank you very much. Regarding our antipsychotic-induced weight gain focus, it's from the GRATITUDE and GRATITUDE II studies. Yes, we will have data by the end of this year. We expect to evaluate both of those studies individually, but also collectively pooling the data. We want to ensure we fully understand all of the data from these trials because we think that we've got to take a holistic review of all of it. We believe that when we produce the results and communicate those results, we want to ensure clarity about the benefits that miricorilant can bring to these patients. Dennis, you also asked about the larger issue of weight loss in general, and I want to clarify that we currently have no programs in weight loss as a broad category. This is really focused on patients who have gained weight due to antipsychotic medications.

Yes, thank you. Our next question comes from the line of Greg Fraser of Truist. Your line is now open.

Sorry. Thank you. Thanks for taking the questions and good afternoon.

Sure.

A quick follow-up on miricorilant. It sounds like when you make the announcement, you will be providing a lot of quantitative results from the study to help investors assess the outcome. Is that the right way to think about it?

Yes. I mean, these studies, as you know, are the first states we built with miricorilant in the context of reversing antipsychotic-induced weight gain. We think they will provide a very rich data set indicating our best path forward.

Got it. Okay. For Korlym, regarding the guidance in growth for 2022, how much of the growth is driven by new patients versus price, higher average dose, or changes in gross/net or any other factors?

Let me return you to Sean Maduck for that answer.

Just to clarify, the forward-looking growth through the end of this year is driven by new patients and the number of tablets going out to those patients. In terms of the average dose, our dose rarely changes; it has been the same average dose for many years.

Got it. Okay. I'm sorry if I missed this; I got on late. Did you comment on the competitive environment? Are you seeing any impact from recall over from the more mature products? I'm curious if other companies are doing things differently than they have in the past that may be having an impact?

No, Greg, you didn't miss it. We understand the question. Sean will answer.

Yes. Very similarly to how I responded in the past on this, we haven’t seen an impact. We’re pleased that more companies are out there talking about proposals, which raises awareness about the condition that is lacking in certain areas, which ultimately helps all stations.

Okay. Has patient enrollment been hitting your targets?

Bill?

No, we don’t typically talk about enrollment, but we talk about our focus on submitting the NDA, and the team is focused on completing that NDA in the second half of next year. I’m very confident that the team is working hard to meet that target for submitting the NDA. We’ve taken, as I think I’ve said on previous calls, an all-hands-on-deck approach, which continues. We’re working cross-functionally with investigators as well as working internally not only to enroll the study but also to start actively writing and completing the NDA. We are actively working on the NDA and have completed investigative meetings in the U.S. and Europe this year, and we have made numerous one-on-one visits to our key investigators. It’s clear after meeting those investigators and discussing the trial that they have unwavering support and excitement around miricorilant and the GRACE study and are committed to completing this trial.

Have you said when you expect to enroll the last patient?

We expect to submit an NDA by the second half of 2023. That’s our focus.

Yes. Understood. Okay. Thanks for taking the questions.

Thank you. One moment for our next question, which comes from the line of Alan Leong of BioWatch News. Your line is now open.

Thanks. This is Alan Leong.

Hi, Alan.

Yes, I have a few fine-grained questions. Let me ask how prevalent is NASH or fatty liver among chronic schizophrenics? And is there any collected input for this in the current antipsychotic-induced weight gain trial?

Yes, your question was a little hard to hear. I'm going to repeat it, then answer the question I thought I heard, and we'll go from there. I think you were asking what is known, or do we know the prevalence of NASH in patients who have chronic psychiatric illnesses and are treated with antipsychotic medications? If that's—if that was your question, we don't know the prevalence. I don't think anybody knows the prevalence; it hasn't been counted in that way. But it's not zero. Without a doubt, these are patients who are overweight, and they have often, in many cases, been overweight for a period of time. Those characteristics are certainly correlated with the development of fatty liver disease and NASH, so I can't answer your question quantitatively or qualitatively. It's certainly something that exists.

Yes. The third question: for ALS patients, what do you know about metabolic syndrome in ALS patients, especially when I looked at the literature? It seems like CNS and neuromuscular patients seem to experience cortisol dysregulation, so I would love to get your commentary on that?

Good. Thank you for giving me the opportunity to talk about that. It's been known for quite a while, probably 20 years, that patients with ALS exhibit hypercortisolism. It has never really been known what to do about that, or if that was in fact leading to their disease. But that's sort of the key element for us was research showing that treating an animal model of ALS with a cortisol modulator resulted in pathological and clinical improvements. Now, how they relate to that hypercortisolism, I’m not sure if your question was whether those patients have metabolic disturbances. I know that less. In some sense, the issue of ALS is so profound that you don't see a lot of reporting of other symptoms. So I've never seen any literature on it or heard that question posed before.

Last question, you have the MRI NASH sub-study. Would it also be able to detect psychotic composition structure? In the past, MRI detected only ghost changes, but I want to make sure I haven't missed anything, and with the very recent improvements in the MRIs?

Yes. For that question, I'm going to give you back to Bill, who is a math expert and has been in this field for many years. Go ahead, Bill.

Yes. Thank you for that question. For the sub-study, our focus is mainly on liver fat reduction. This is based on most literature indicating that at least a 30% drop in liver fat reduction corresponds to improvement in fibrosis. In the Phase 1b study, we are not looking at fibrosis at this time, but there are other non-invasive markers we will be using and analyzing as biomarkers to look at improvements in liver fibrosis. We will take those learnings and apply them as we move forward to a Phase 2 study, using those same parameters and/or liver biopsies as well. But yes, we will be gathering biomarkers to assess improvements.

Thank you. Looking forward to the next month.

Yes. All right. Thanks. Thank you, Alan. And thank you to everybody who listened in. We're looking forward to our next communication, and hope you have a good rest of the week. Thanks very much.

Thank you for your participation in today's conference. This does conclude the program, and you may now disconnect.