Corcept Therapeutics Incorporated (CORT) Q4 2017 Earnings Report, Transcript and Summary

Good day and welcome to the Corcept Therapeutics' Conference Call. Today’s conference is being recorded. There will be a question-and-answer session following today’s presentation. [Operator Instructions] Now, at this time I like to turn the conference over to Mr. Charlie Robb. Please go-ahead, sir.

Thank you. Good afternoon, everyone. My name is Charlie Robb, Corcept's Chief Financial Officer. Earlier today, we issued a news release giving our fourth quarter and full-year 2017 financial results, and providing interim results from the Phase 2 trial of our selective cortisol modulator relacorilant to treat patients with Cushing's syndrome. For a copy, go to corcept.com and click the Investors Tab. Complete financial results will be available when we file our Form 10-K. Today's call is being recorded. A replay will be available through March 8 at 1-888-203-1112 from the United States and 1-719-457-0820 internationally. The pass code will be 1581123. Statements made during this call that are not statements of historical fact are forward-looking statements subject to known and unknown risks and uncertainties that might cause actual results to differ materially from those expressed or implied by such statements. Forward-looking statements include statements regarding our revenue and expense estimates for 2018 and beyond, the pace of physicians and patient’s acceptance of Korlym, the cost, timing and results of our clinical trials, including the interim and final results of our trials of relacorilant to treat patients with Cushing’s syndrome. Our Phase 1/2 trial of relacorilant to patients with pancreatic and other solid tumors; our trial of CORT125281 in castration resistant prostate cancer; our Phase 1 trial CORT118335 and our anticipated Phase 2 trials of CORT118335 to treat patients with antipsychotic induced weight gain, and non-alcoholic steatotic hepatitis or NASH. The protections afforded by Korlym's orphan drug designation for Cushing's syndrome and our other intellectual property rights, including the composition of matter patents covering our selective cortisol modulators and patents covering the use of cortisol modulators including Korlym to treat patients with Cushing's syndrome, triple-negative breast cancer, castration-resistant prostate cancer, and other indications. These and other risks are set forth in our SEC filings, which were available at our website in the SEC's website. We disclaim any intention or duty to update any forward-looking statements made during this call. Now, I will review our financial results. Corcept's revenue in the fourth quarter was $53.3 million, compared to $23.8 million in the fourth quarter of last year, a 124% increase. Compared to the third quarter of this year, revenue grew 25%, due entirely to increased Korlym's sales volume. We expect our revenue growth to continue in 2018, 2019 and beyond and have provided 2018 revenue guidance of between $275 million and $300 million. This estimate takes into account a 6% price increase at the start of the year, which we will net after government rebates approximately 5%, but otherwise represents broad based organic growth. That is to say, more physicians prescribing Korlym to more patients. In the fourth quarter of 2017, our fully diluted net income was $0.77 per share, compared to $0.04 per share in the fourth quarter of 2016. For the full year, our net income was $1.04 per share. In 2016, it was $0.07 per share. Our fourth quarter and full-year 2017 net income includes a one-time non-cash gain of $76.7 million from the recognition of deferred tax assets. Let me take a moment to explain this extraordinary tax item. Corcept’s deferred tax assets consist of capitalized research and development expenses, R&D tax credits, and the operating losses we accumulated developing Korlym and discovering and developing our portfolio of selective cortisol modulators. Deferred tax assets have value because they allow us to reduce our future income tax expense. Generally accepted accounting principles require that these be included in the balance sheet, but only if we are likely to generate enough taxable income to use them. In the fourth quarter of 2017, we concluded that we are likely to generate at least enough taxable income to incur $76.7 million of income tax expense, an expense which our deferred tax assets will offset. In other words, we are confident that these deferred tax assets will be utilized. We therefore added $76.7 million to our balance sheet and increased our fourth quarter income by the same amount. Excluding this one-time non-cash addition to our income and the non-cash expense related to stock compensation and accreted interest on our now retired royalty financing agreement, our fourth quarter non-GAAP net income was $24.7 million, compared to $6.9 million in the fourth quarter of 2016. For all of 2017, our non-GAAP net income was $63.3 million within three and one-half times our 2016 non-GAAP net income. Our cash and investments at quarter-end increased to $104 million, up from $76.7 million at September 30, 2017. This balance does not include $12.9 million we received in January in settlement of litigation with our former specialty pharmacy. As we have said in past calls, we believe revenue from our Cushing's syndrome franchise together with our cash on hand will be sufficient to fully fund our planned activities, which include continuing to grow our commercial business, conducting Phase 2 and Phase 3 trials of relacorilant in both Cushing's syndrome and solid tumors, conducting Phase 1 and Phase 2 trials at CORT125281 in castration resistant prostate cancer; and CORT118335 for antipsychotic induced weight gain and NASH, and advancing to the clinic additional proprietary selective cortisol modulators. I will now turn the call over to Dr. Joseph Belanoff, our Chief Executive Officer. Joe?

Thank you, Charlie, and thank you everyone joining us today. Corcept had an outstanding year. Revenue grew 96% to $159.2 million. We generated net income of $129.1 million. Excluding significant non-cash items, our non-GAAP net income in 2017 was $63.3 million, an increase of 270% from 2016. We more than doubled our cash investments to $104 million. We expect significant growth to continue with 2018 revenue of between $275 million and $300 million and significant growth in 2019 and beyond. I previously discussed the trends in medical practice that are causing our Cushing's syndrome franchise to perform so well. These trends continue. To sum up, first, Korlym works very well for almost all patients. In Korlym’s Phase 3 trial, 87% of the patients, as adjudicated by independent outside experts experienced significant clinical improvement. Even the most skeptical physicians quickly notice Korlym efficacy, which is why they frequently file their first Korlym prescription with second, third and fourth scripts. Second, physicians are increasingly aware that hypercortisolism is dangerous and should be treated. They are screening more patients who exhibit symptoms of the disorder such as glucose tolerance or hypertension, but who have not responded to conventional therapies for those conditions. And increasingly treating those patients when they find them. Finally, more physicians are realizing that modulating cortisol activities is often the optimum medical treatment. Although we frequently enroll patients who are switching to Korlym from generic cortisol synthesis inhibitors such as ketoconazole or metyrapone, it is increasingly common for physicians, particularly those who have used Korlym previously to prescribe Korlym as the first medical treatment for patients with hypercortisolism. Having reviewed the trends supporting Korlym's revenue growth, I like to address an important factor restraining that growth. Namely Korlym's affinity for the progesterone receptor. PR for short, and its significant off target effects. Recall that hypercortisolism is caused by a tumor that produces either excess cortisol or ACTH, a hormone that causes the body to produce cortisol. Korlym works by competing with cortisol at the glucocorticoid receptor or GR, the receptor to which cortisol binds when levels are elevated. By binding to GR, Korlym turns down cortisol activity causing the symptoms of hypercortisolism to abate. The Korlym also binds to PR, which is why Korlym terminates pregnancy. Its active ingredient is the same as the abortion pills. Korlym's PR affinity also causes endometrial thickening and irregular vaginal bleeding in many women who take the medication regardless of their age. These are affects many physicians and patients would strongly prefer to avoid. The impact of Korlym's off target effects on its acceptance is significant. Some doctors and female patients will have nothing to do with the abortion pill as a matter of principle. Many more avoid the drug for fear of endometrial thickening and irregular vaginal bleeding. It is impossible to say just how many, although the number is substantial as the great majority of patients with Cushing's syndrome are women. A medication with Korlym's efficacy that does not cause PR-related adverse events would clearly be a superior treatment and would make cortisol modulation, an easy option for the many doctors and patients who now avoid it. This brings me to today's announcement of interim data from the Phase 2 trial of our selective cortisol modulator relacorilant. Let me offer some background. Relacorilant potently binds to GR. The prime attribute for any effective treatment for hypercortisolism, but has no affinity for PR. Unlike Korlym, relacorilant does not cause endometrial thickening or irregular vaginal bleeding. Relacorilant was safe and well tolerated in its large Phase 1 trial where it also demonstrated that importantly reverse the effects of prednisone a synthetic analog of cortisol. Relacorilant's Phase 2 trial is a 30-patient open-label study being conducted at sites in the United States and Europe. The trial consists of two cohorts, each receiving 12 weeks of treatment. The first low-dose group received a daily relacorilant dose of 100 mg for four weeks followed by 4 weeks of 150 mg per day and then four more weeks of 200 mg per day. The second cohort follows the same protocol, but with doses of 250 mg per day for the first four weeks followed by 300 mg and 350 mg. The low-dose cohort has completed the study. We released its top line results today. The low-dose cohorts’ results are very encouraging. After just 12-weeks of treatment patients with hyperglycemia demonstrated a statistically significant improvement in glucose metabolism as we see with Korlym. Serum osteocalcin, a marker of bone growth increased with statistical significance as we also see with Korlym. Stimulating bone growth in patients with Cushing's syndrome is important because hypercortisolism causes osteoporosis. 45% of the patients with uncontrolled hypertension experienced a 5 mm or greater reduction, either systolic or diastolic blood pressure or resulted a slightly better than the one we saw in Korlym’s pivotal trial after six months of treatment. As we expected, relacorilant safety profile in this cohort was excellent. There were no serious adverse events and no patients discontinue the study for reasons related to relacorilant. Also, as expected there were also no signs of PR affinity in the cohorts’ female patients who reached an age from 31 to 64. We expected relacorilant to perform well from a tolerability perspective in this cohort. We did not expect to show such pronounced pharmacodynamic effects at these are relatively low doses. The data from the final higher dose cohort in the second quarter and the study's full results will be presented at scientific conferences later in the year. In the meantime, we continue to plan for our Phase 3 trial. I’ll now turn to our oncology program. As some of you know cortisol modulation may play a role in treating solid tumors through two mechanisms. First, in cancers where the tumors express GR, such as pancreatic, triple negative breast, and ovarian cancer cortisol stimulates genes that retard apoptosis the programmed cell death chemotherapies are meant to provoke. Preventing the stimulation of apoptosis suppressing genes by adding a cortisol modulator to a chemotherapy regimen should allow that regimen to achieve its optimal effect. Second, cortisol modulation may help the immune system fight cancer. A healthy body produces cancer cells very regularly, but the immune system identifies and destroys them. There is great interest in therapies that stimulate the immune system to fight cancer because the immune system is a very effective therapeutic tool. Cortisol even at normal levels suppresses the immune system. Unfortunately, the physiological and psychological stress of cancer and its treatment raise cortisol activity above normal levels creating even greater immunosuppression. Cortisol modulators counter this effect allowing the immune system to act more potently. Our oncology program builds on years of methodical preclinical and clinical research by investigators at the University of Chicago and confirmed by researchers Sloan Kettering. Our program made significant advances in 2017. We expect more progress this year. Our open-label Phase I/2 trial of relacorilant plus nab-paclitaxel, Celgene’s drug ABRAXANE to treat patients with solid tumors continues to seek that combinations maximum tolerated dose. Data produced so far has validated our promising preclinical results and prompted us to open an expansion cohort in patients with metastatic pancreatic cancer, a dire disease for which there are no good treatment options. We expect to open additional expansion cohorts in patients with other tumor types and most likely ovarian and triple-negative breast cancer later this year, and expect to report data from this trial before year-end. Our trial of relacorilant is proceeding in parallel with the work of our University of Chicago collaborators who are studying Korlym, plus ABRAXANE to treat patients with triple-negative breast cancer. The 64-patient double blind placebo-controlled multi-center Phase 2 trial builds on their extensive preclinical and clinical studies, as well as the promising results of Corcept's Phase 1/2 trial of Korlym plus eribulin to treat patients with this disease. Celgene is funding this trial. We are providing Korlym. We possess the intellectual property covering the use of this combination of medications. The Chicago in investigators have recently initiated a 74-patient open-label Phase 2 trial of Korlym in combination with Merck immunotherapy agent KEYTRUDA to treat patients with triple-negative and Her2 negative breast cancer. It is well-known that androgen stimulate growth in tumors of the prostate. That is why androgen deprivation known as chemical castration is a common treatment. It has been shown more recently in several top laboratories that patients treated with the androgen receptor blocker and enzalutamide the Astellas Medivation drug XTANDI, quickly developed colonies of cells where cortisol becomes the tumors growth factor. Combining a cortisol modulator with an androgen modulator such as enzalutamide from the outset of treatment they block this cancer escape route. The open-label Phase 1/2 trial of our proprietary selective cortisol modulator CORT125281 combined with Xtandi in patients with metastatic castration resistant prostate cancer at sites in the United States and the United Kingdom is now dosing patients. University of Chicago Investigators continue to enroll patients in their own 84 patient controlled multicenter Phase 2 study of Korlym plus Xtandi in the same population of patients. The Department of Defense in the prostate cancer foundation are funding this trial. Astellas is providing Xtandi, we are providing Korlym, and possess the intellectual property for the use of this combination of medications. As many of you know, we are conducting a Phase 1 trial of our proprietary selective cortisol modulator CORT118335. This compound is particularly potent in the liver and has the potential to treat two serious disorders; antipsychotic induced weight gain and non-alcoholic steatotic hepatitis, which is commonly referred to as NASH. CORT118335 has generated positive data in animal models of both disorders. Importantly prevents and reverses the effects of olanzapine, Eli Lilly's drug Zyprexa. It also prevents and reverses fatty liver disease, as well as liver fibrosis a symptom of NASH. These results would - without anything else justify advancing CORT118335 as a potential treatment for these indications. But there is important additional support, our findings with Korlym. Several years ago, we achieved positive results in a placebo controlled clinical trial in which healthy human subjects where administered Zyprexa plus either a placebo or Korlym. Korlym prevented Zyprexa's metabolic adverse events. We achieved the same results in a controlled trial using risperidone, Johnson & Johnson's drug Risperdal. The study results were published in the journals advances and therapy in 2009 and obesity in 2010. Our interest in CORT118335 is a possible treatment for NASH is also based on human data. Stemming from the observation that Korlym reverses fatty liver disease in patients with Cushing's syndrome. Unfortunately, despite having generated promising clinical data Korlym's board of fashion properties, which necessitates close centralized control over its distribution disqualified as a treatment for common disorders. Antipsychotic induced weight gain and NASH affect millions of people. Medication is treating them like potentially CORT118335 need to be available at every retail pharmacy. The CORT118335 Phase 1 trial is successful. We plan to advance it to Phase 2 for these indications by year-end. To sum up, Corcept had an outstanding year. Revenue almost doubled to $159.2 million. We expect 2018 revenue of between $275 million and $300 million with significant growth in 2019 and beyond. Our net income was $98.3 million in the fourth quarter and $129.1 million for the year. Excluding significant non-cash items, our non-gap net income for 2017 was $63.3 million, compared to $17.1 million in 2016. Our cash and investments increased by $27.4 million in the fourth quarter to $104 million. We had no debt. Interim efficacy and safety data from our Phase 2 trial of relacorilant to treat patients with Cushing's syndrome are positive. We will report complete results at scientific conferences this year and are preparing for its Phase 3 trial. Our oncology programs continue to advance. CORT125281 is now being dosed to patients with castration resistant prostate cancer. Our Phase 1/2 trial of relacorilant in combination with Abraxane to treat patients with solid tumors has produced encouraging data, which we expect to release this year. We have initiated an expansion cohort in patients with metastatic prostate cancer. Finally, by year-end, we anticipate advancing one of our most promising compounds CORT118335 to Phase 2 as a treatment for patients with antipsychotic induced weight gain or NASH, serious disorders that affect tens of millions of patients worldwide, and for which there are no approved treatments. I’ll stop here to answer questions.

Thank you. [Operator Instructions] And we will take our first question from Charles Duncan with Piper Jaffray. Please go ahead.

Hi, guys.

Hi Charles.

Thanks for taking my question. Congrats on a good quarter and nice year. I had a couple of questions. One is, on Korlym and another on relacorilant, and I also had a follow-up question to recent generic filer. In the first one on Korlym, you talked about 25% sequential growth 3Q to 4Q, I wouldn't anticipate you give a lot of granularity on the actual numbers, but when you broke up that 25%, could you give us some color on what percentage is new patients or more patients and what percentage is called more prescribers? I mean give us a little bit more information on what’s really driving growth?

I think I understand your question. The most important thing to understand is that it is obviously more patients. I mean there is no price increase involved with that. It’s just more patients who are getting Korlym, but I think the interesting thing we have looked at, you know the two real buckets it is coming from is either physicians who previously hadn't prescribed the medicine now prescribing or physicians who had previously prescribed the medication and are prescribing more. And I actually think that they are both very significant percentages, but the percentage, which is greater is new physicians prescribing first time for patients, and new prescribers is the largest of the group, but both are substantial.

Okay, that’s helpful. And then the other thing that investors have wandered lately is there are creeping up of those and our persistence like you see that either one would be positive, what impact does that have on the numbers?

Well, I have talked about this before, which is that in the seismic study the study for approval the average dose is about 730 mg per patient, and we believe that over time that may be a long period of time as the market gets to its full maturity will end up in about that zone anyway. And we’ve seen modest increases in dose over time, but it is not a material part of our growth.

Okay, that’s helpful. Nice sequential growth, good to see. Moving on to relacorilant versus Korlym, if you could just remind me it has been a while since I looked at the Korlym data, I guess I’m wondering, when you think about the time lines that made an intuitive effect, how would you compare their drugs at least in terms of this lower dose?

Yes. And Charles, so you can hear another voice in a second. I like to introduce Bob Fishman, he is our Chief Medical Officer and really has conducted this whole study.

Hi, thanks for your question. As you know in the press release we presented data on three parameters, blood glucose control, hypertension and osteocalcin, which is a marker just ahead of bone growth turnover, and really across all three the results are similar to what we saw with the Korlym experience. Some differences of course in methodology and study ends. But it is very encouraging to us to see similar results across all three parameters, especially with the high dose group data yet to come.

Okay. And in that higher those would you look for, I mean this maybe like a naive question, but I'm not sure if it really is, would you look further driving efficacy in terms of those parameters or is it really at the higher dose at testing safety?

I think as we - well first, as we said, we were surprised to see this level of evidence of efficacy in the low-dose group, and so as we move ahead to the high dose group, our expectation is that we will see more effect across the array of parameters that we’re looking at. It’s also possible that as we get to the higher dose group we will see more side effects that’s yet to be shown, but so far, we have been very pleased with the safety profile, most notably exactly as we expected, no evidence from the clinical experience in this trial of events that would be associated with affinity for the progesterone receptor. And then secondly, the combination of seeing effects at the low-dose group without so far evidence of dose limiting tolerability issues is very encouraging.

Okay. And then just one question on that PR affinity, I think Joe mentioned that women age is 31 to 64, and I guess on assuming that they were people having normal menses or whatever, way that you would mention PR affinity, I guess where you explicitly looking for that or would you have expected heavy bleeding if you will to be captured within the AE [ph]reporting and you didn't see any?

Charles, I just want to make this story a little bit familiar to people who don't know it is as well as you do. Korlym is a potent cortisol modulator, but it is also a very potent progesterone receptor modulator, which is why it terminates pregnancy and causes endometrial hypertrophy and irregular vaginal bleeding. And those effects are not subtle, so that is a common effect that is seen in many patients, in many women who are premenopausal and postmenopausal. So, I think the main thing to understand, first is, we didn’t expect to see any of those effects with relacorilant. Relacorilant has as best we can see, no affinity, at least the thousand-fold affinity less than Korlym does for the progesterone receptor and all that is now published data. So, in some sense it didn’t have to be anything that rated to being looked for, although believe me if it had showed up like Korlym, it wouldn't have been a subtle effect, and it would have been reported. So, I guess the main thing, it’s absolutely no surprise that that was the case, but we are reporting it because I just wanted people to know that that this in fact what we saw.

That’s awesome job. Last question on rela is timelines. I guess, if it had to be a guessing then and you were assuming that the study would move in or the drug would move into Phase 3, I think you mentioned in the second half, what kind of timelines would you anticipate in terms of being able to execute that that [indiscernible] just probably?

Charles, we don't know with certainty, exactly what the time lines are going to be of course, but - and I think one of the things that I wanted to point out is now that we really have the sense that the medicine works to even more incentive to get it to patients as quickly as we can because we think this is very valuable medical therapy and a real advance over what we currently have, but I think that realistically to just put up a broad kind of conservative band on it, I think you would expect all in Phase 2 program to take - a Phase 3 program to take about two years and you would expect that former review period is another year beyond that and obviously we will do our best to try to - because I think it’s very valuable to patients to move as quickly as we can, but I think that’s kind of a parameter to conservatively pencil in.

Okay. Last question is regarding potentially generic filer for Korlym, which doesn't make a lot of sense to me, but I’m kind of wondering, I think it was talked about being a filing versus intent, and then some additional news along those lines, I am just kind of wondering if you could provide any additional perspective on that, what you intend to do and also if you have a sense of the source of Korlym that enables a filing of that intent?

Charles, I am just going to reintroduce Charlie, our CFO who is handling this item.

Thanks Charles. Yes, so, as Korlym’s revenue is growing and continues to grow it’s natural that we would attract competitors. But before I address the particular situation that you are referring to. Let me give a little bit of background for other folks on the call. Mifepristone, Korlym’s active ingredient was discovered in 1980. The patent covering its structure expired many years ago, and the FDA has approved Mifepristone for only two uses. Termination of pregnancy, and in the form of Korlym, the treatment of patients with Cushing's syndrome. Because we did the expensive risky work of demonstrating that mifepristone is safe and effective as a treatment for patients with the rare chronic disease such as Cushing's syndrome, the FDA granted Korlym orphan drug status for that indication, and Corcept receives seven years marketing exclusivity, which expires in February 2019. Now, our years of extensive work with Korlym has led to medically useful innovations and to patents covering Korlym's use to diagnose and treat patients with Cushing's syndrome. Now, these are listed in the FDA's orange book, which is a compendium or companies with approved medication such as Korlym less the patterns they believe will be infringed by generic version of their product. So, right now, we have two patterns in the orange book. One will expire in 2028 and the other in 2036. We also have patent applications under examination of the patent office that will result in one or more additional patterns being issued netted to the Orange Book over the next year. So, now I will turn to the current situation. We announced on February 5 that Teva Pharmaceuticals had filed with the FDA an abbreviated new drug application or ANDA seeking permission to market a generic version of Korlym after Korlym's orphan drug exclusivity expires. As part of this process, Teva certified that it's generic version of Korlym would not infringe our two Orange Book patents. No bylaw, we have 45 days from the receipt of Teva’s certification to suit Teva in Federal District Court for patent infringement. Our lawsuit will automatically stay FDA approval of Teva's product for the lesser of 30 months or until the district court litigation concludes. Litigation will begin with our two Orange Book patents, and as additional patterns issued to us, we will add them to the dispute. Teva's challenge is going to grow. So, what is the immediate consequence of Teva’s ANDA filing. For the next few years, at least, nothing but litigation, which we can comfortably afford, and which will have no impact on our commercial or clinical programs. And I want to also add, you know Charles you asked about the source of the tablets, little background for folks and ANDA’s applications to sell our generic product must include a demonstration by the end of filing by the generic company that their proposed product is equivalent, behaves in patients equivalently the Korlym in terms of its Pharmacokinetics of PK, in other words. And to do that, Teva must say obtain Korlym tablets from the manufacturer of Korlym meaning us. And we don't know where they got those tablets. They never asked them for - asked us for them. We have a very close control of our distribution and that’s an issue that’s going to be of some interest to us in the sort of months and years ahead. And I don't say anything more about it than that. And so that’s a good question, it is something we are looking at very closely. But I want to conclude, by reminding everybody that although the legal facts about the intellectual property and the legal framework is going to govern our interactions with Teva are important, that is why I have tried to take some care to describe them with some particularity. They are secondary. They are really important facts are the ones we announced today of our relacorilant. We’re developing, I mean people really need to keep this in mind, we are developing what we believe will be a superior treatment for patients with Cushing's syndrome, one that will render Korlym obsolete. So, that’s the other piece of our response in effect of Teva.

Okay, that’s helpful. I don't want to take any more time, but I appreciate that color Charlie and will be back with some additional questions. Thanks.

Thanks Charles.

Thank you. We will now take our next question from Adam Walsh with Stifel.

Hi, Joe, Charlie, and Bob, how are you guys doing? Thanks for taking my questions.

Hi. Good to talk to you.

Hi, good to talk to you, and I appreciate the update on the relacorilant trial, I have a few questions around that. I think what people are really trying to drill down on is an apples-to-apples comparison between what you're showing us on glucose tolerance and what was published in the Korlym data. And I have done some math, it is very difficult to do because you are comparing cross-trials and so forth, but Bob you had mentioned earlier that the results were similar. I also noticed in the press release that you intend to launch the Phase 3 in the second half, but the higher dose data hasn't come out yet, Bob when you say similar, would you say, almost, could it exactly overlay the Korlym data, are we really kind of waiting to see the higher dose data before we really know whether we have a corilant equivalent drug?

Adam, I can answer. The answer is, just want to point out one thing. This is a three-month study and the seismic study is a six-month study, which actually increases your issue issues more, but I can tell you in three months of treatment CORT125134 we saw very similar results to what we saw with seismic at some cases over the entire six months. So, the answer is within the balance of the size of the study and so forth, some of the results were a little better, somewhere a hair weaker, but they are basically the same results as we saw with seismic and Korlym.

Okay, that’s helpful. And then on the benefit on hypertension, I noticed in the exclusion criteria there was a note for poorly controlled hypertension, but it appears that some of those patients did show up in the trial. I just wondered any thoughts on that?

Go ahead Bob.

Hi, this is Bob. The exclusive related poorly controlled hypertension-related higher degrees of higher hypertension don't have in front of me, but north of certain 170, 180. The uncontrolled term in terms of the - which refers to the patient population, refers to patients who are either untreated or maybe on a blood pressure medication, but not fully controlled and therefore there is room for improvement and a chance to see a signal.

We simply excluded those who thought pressure was sort of too high to safely proceed and also to make sure that these were patients would have a good chance of completing this study without an interruption.

Great. I get it. On the serum osteocalcin that’s something I didn’t see, I don't recall being in the Korlym trial, and some of the KOLs that we’ve talked to have mentioned that one of the things they like about Korlym is that they show metabolic benefits is this an endpoint that you’re going to look at in the pivotal study as kind of that package of metabolic improvements going forward?

Yes, this is Bob again, it will be measured because it is a very useful indicator to us of the physiological relevance of the inhibition of the receptor by our study drug. Just quickly recapping, it’s a marker of bone turnover, it suppressed in patients who have excess steroid in their bloodstream whether that’s cortisol or prednisone and the relevance of that is the spinning of bone that occurs with long-term cortisol excess. So, it is, as we look at the various parameters of improvement in patients it is very reassuring to us to see a marker such as osteocalcin, which means that the body is interpreting that the degree of inhibition of the GR is clinically important.

So, is osteoporosis something that you might try to get in the label if you see these continued improvements to design the trial and situate that you can show improvements in that metabolic parameter as well?

You know, Adam, what’s really important and I don't want to sort of get lost here. We want the broadest possible label we can get for relacorilant. We think that cortisol modulation, well in fact just a back-up in Cushing's syndrome, many things go wrong. We will measure more than 20 different endpoints, and what we want to really show is that there is really global improvement across all of them. And certainly, something like osteocalcin, which is a very good marker of what’s wrong in Cushing's syndrome and what improves with treatment is one of those things. So, it really is part of the whole mix of things that we will do. It is not that these patients have the kind of osteoporosis that you see generically with older people. This is osteoporosis, which is really prominently caused and actually can be caused very quickly in fact by excess cortisol activity. And just one other small question because I don't really want this to get lost in the shuffle, Bob said, but I just want to repeat it. In this lower dose group, our expectation was well tolerated and likely to have not much pharmacodynamic effect. The real surprise to us was not that it was well tolerated, which it was, but we saw actually quite potent effects at these low doses and our expectation is that the higher dose group we will see even more potent effects.

Excellent. Any change in anti- diabetic medications during the trial?

The parameters really for anti- diabetic patient was you couldn't add, you could only subtract and we are still analyzing that data. In fact, Bob also mentioned it, but I do want to be sensitive to the fact that we would actually like these to be in major conference presentations. We felt that this is material and we really had released the topline information, but you will get the full data set later in the year.

Yes, absolutely. So, I won’t ask about Hemoglobin A1C, I’ll move on from that one as well. And then, I just have a question, in the graph it’s you show data for the hypoglycaemia patients that’s 13 patients, but I think there were 17 total patients, is that, should we assume that the other patients with hypertension patients and just did not have hyper glycaemia baseline?

Yes, that’s exactly right.

And then the final question is, what percent of patients in the trial were women, I think Phase 1 was all men and I just am asking that in the context of the lack of side effects that you saw there?

Out of those 17 enrolls in group 9 are women.

Okay, that great. Thanks for taking my multiple questions. I appreciate it.

No problem Adam.

Thank you. We will now take our next question from [indiscernible]. Please go ahead.

Hi Joe, Charlie and Bob. Thank you very much for taking my questions. My supervisor Alan Leong sends his greetings. So, here are my questions. If relacorilant made it to market, do you anticipate that the new drug would require the same white glove [ph] documentation and overhead as Korlym?

The answer is, I’m already glad you're talking about approval, that’s terrific and when it is on the market, as an optimist we are too. And a lot will have to be figured out between now and then, but I think the critical thing to understand is that this is not the abortion pill. That’s a very prominent difference between relacorilant and Korlym. How it is ultimately distributed we'll have to figure out, but it has an obvious and major difference.

Thank you. My next question is, do you have any sense of the dose of relation to side effects, especially given that some of the patients responded so well to the lower dosage?

Yes, we were, as I said, I will just repeat it again, we did not, we really expected this to be part of this study to be primarily a pharmacokinetic study, we will learn more about the drug and efficacy was not really something that we were anticipated seeing. And we also got efficacy without releasing much in the way of side effects at all as Bob mentioned. I can't predict what we're going to see in the high dose group, except to say that we expect a bigger effect size in terms of the efficacy parameters, and we will see what the side effect profile is. Obviously, we don't expect to see any progesterone receptor side effects, but we will have to see what other things occur as they do.

Sure. Thank you. We’ve heard that Korlym has slower uptake within conservative regions in the country, can you provide some color on the impact on the endocrinologists?

I’m not sure I exactly follow your question although I think that your fact, your statement is correct. I think that there are places in the country where Korlym is disproportionately not prescribed and I can also tell you, you’ve been on a more specific places, because I have personal experience talking to doctors that there are doctors who prescribe to men who do not prescribe to women. I think both of those things that really are true. I don't think endocrinologists are any different than any other physicians in terms of their political statements in their specific interest in treating men versus women, but what I really will say is this. I think that there will be doctors and patients who are interested in relacorilant to a significant degree who at this point unfortunately do not avail themselves of Korlym.

I think, yes, you really got to the spirit of that question. So, I really appreciate that. So, we have heard that of course at the steadily increased - has continued to steadily add medical liaisons, will this continue into the foreseeable future?

I would like to introduce you to the person who runs our Cushing's syndrome franchise, Sean Maduck, who has really done a fabulous job in really educating people about the disease throughout the country, and I would like to give him an opportunity to answer that question.

Thanks for the question. You stated medical science liaisons, I think what you meant is clinical specialists on the sales side, can you just clarify that?

Yes, thank you.

Okay, so when we exited 2017 with 38 clinical specialists, as I said previously on calls, we continue to add clinical specialists where it makes strong business sense, and we are always looking for exceptional talent as an organization. We are always looking at our territory cuts and if we think we have a viable territory and we find somebody that we know can be effective in that territory that’s somebody that we bring on I think what’s important to remind people is that our hiring strategy is really quality versus quantity, it’s just not about numbers, it’s about having the right people to have the right conversations with physicians, and to be a successful that Corcept and successful in selling Korlym, our clinical specialist have to have a very high and very strong clinical acumen. Our role is challenging and it is actually very difficult than the standard soft of sales role in the organization or in the industry. So, we will continue to add where it makes sense, so we do look at this on an ongoing basis, and we expect to add a few more throughout 2018.

Thank you. And then my last question is, if you can give us a bit of color around the profile for CORT125281, is it more like a gentle blocker such as relacorilant or is it more nuanced like CORT118335?

Let me answer your question broadly, and I think it’s the first time I have ever really been asked on a conference call. So, just an opportunity for the future. All of our new cortisol modulators share one thing, they don't touch the progesterone receptor. That’s how they were designed in all 500 of them are that way. However, what we really have noticed in the earlier preclinical studies is that they are not identical to each other. Some get into the brain, some don't get into the brain, some or most effectively creating weight loss, some are more at creating insulin sensitivity. Now CORT125134 relacorilant we picked intentionally for Cushing's syndrome because it is in some respects with the exception of progesterone antagonism, the most Korlym like drug goes everywhere seems to really do the same sorts of things. The reason we picked CORT125281 is that it is seemed particularly effective in preclinical models of castration resistant prostate cancer, and that’s why it’s there. CORT118335, which you mentioned seems particularly effective in terms of liver activity actually interesting also in terms of brain activity and that’s why we picked it there. So, one of the things, and just in large my answer to this question, we expect to continue to bring compounds lower from our library with specific attributes for specific disorders as we gain more data.

All right. Well thank you very much for answering our questions. We really appreciate it. And we look forward to seeing you very soon. Thank you.

Nice to meet you. Alright, I think that now concludes our call. We look forward to talking to everybody next quarter, and wish you good rest of the winter. Talk to you later. Bye-bye.

Thank you. And that does conclude today's presentation. Thank you for your participation and you may now disconnect.