Corcept Therapeutics Incorporated (CORT) Q3 2022 Earnings Report, Transcript and Summary

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. [Operator instructions] And 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. Charlie?

Thanks Atabak, I have little to report in March 2018. We sued in Teva in Federal Districts 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 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, is 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, that is the basis of our summary judgment motion at the Patent Office and lost, which means it cannot challenge the 214 patents validity in district court, as a result is only defense to our summary judgment motions that is proposed product would not infringe, a position we believe has no support. 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. 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, discovery in that case is scheduled to include 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. Joe?

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 in person contact with-- 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 guide atoms 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 endocrinologist 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 generate data supporting cortisol modulations broad therapeutic potential. We were very excited about our most recently initially initiated studies ROSELLA, our confirmatory Phase 3 platinum-resistant ovarian cancer and DAZALS, our Phase 2 trial in ALS. We also looking forward to important readouts from our two Phase 2 trials and antipsychotic-induced weight gain by the end of this year. Our portfolio of more than 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 effects by binding to the glucocorticoid receptor, or GR. They do not bind to the progesterone receptor and so don't cause some Korlym approved products with serious off target effects. 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 perform best in models of solid tumors, others are more potent in models 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, anti-psychotic induced weight gain, NASH, and of course, Cushing's Syndrome. We are also investigating cortisol modulations 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 postulated by investigators at the University of Chicago and later confirmed by other prominent researchers. One mechanism is increasing apoptosis, program cell death that chemotherapy is meant to induce in solid tumors. Cortisol works against the beneficial effects of chemotherapy by suppressing apoptosis. And our successful controlled Phase 2 trial in women with platinum-resistant ovarian cancer, the addition of our selective cortisol modulator relacorilant, enhance the effect of chemotherapy, slightly by 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 appear to re-sensitize 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 a study was not powered to show a difference in overall survival, or OS compared to nab-paclitaxel monotherapy, women in the intermittent relacorilant group also live longer than those in the comparator group with a P value that approach 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 experience no additional side effect burden compared to those who received nab-paclitaxel alone. Results from this study were featured multiple podium presentations at the 2021 and 2022 European Society for Medical Oncology, ESMO meetings and at 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 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 told us that in their view, relacorilant's potential benefit improves survival without increased side effect burden would constitute an important medical advance and relacorilant and 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 cortisone 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 experienced resurgent disease deprived of the androgen stimulation, tumor switched to cortisol activity to stimulate growth. Our hypothesis is that adding a cortisol modulator to androgen deprivation therapy enclose 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. 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 the immune system. 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 Cushing syndrome, usually quickly lethal combination. pembrolizumab alone is rarely effective in treating this form of adrenal cancer. Our trial is evaluating with a relacorilant and treat these patients Cushing's Syndrome by reducing excess cortisol activity and by reversing cortisol induced immune suppression, allow 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 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 disease 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 have shown great promise in animal models of ALS, improving motor performance and reducing neuro inflammation 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 to double blind placebo controlled Phase 2 trials of miricorilant, GRATITUDE, and GRATITUDE II in patients with anti-psychotic induce weight gain, a serious and widespread disorder. In the United States, 6 million people take anti-psychotic medication such as olanzapine and Risperidone to treat illnesses including schizophrenia, bipolar disorder, and depression. While these drugs are very effective, they often cause rapid and sustained weight gain, as well as cardiovascular and metabolic disease. 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 seem to build on the positive data from our study miricorilant in healthy subjects. In 2020, we completed a trial which 96 healthy subjects received olanzapine and 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 ASD, which typically exhibit sharp transient increases at the start of olanzapine therapy. 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 long standing 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 patient's metabolic health as an indication of the patient's condition being treated more fully. For example, 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's 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 ASD. The improvement in liver fat in these patients was greater and occurred much more rapidly than we had expected, and it's 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 trials primary endpoint was a 30% reduction in liver fat after 12 weeks. It may be that the rapidity of neural correlates fat reducing effect caused the patient's ALT and ASD to rise. One way to liver chips fat is by metabolize against fatty acids, which in excessive amounts irritate the liver. Lipids in the blood of these patients did not increase providing support the idea that miricorilant caused the excess fats 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 of 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, 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, and so does not cause PR related side effects including termination of pregnancy, endometrial thickening, and vaginal bleeding by a different mechanism Korlym also does not appear to cause hypokalemia, low potassium, serious side effects experienced by 44% of patients in Korlym's pivotal trial. Korlym induced hypokalemia is a leading cause for them discontinuation. Relacorilant's Phase 2 efficacy and safety data were strong. Patients experience 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 real Relacorilant induced instances of endometrial thickening or vaginal bleeding, and no drug induced hypokalemia. The trial results were published in frontiers in endocrinology last year. Recent enrolling patients with any etiology of Cushing's Syndrome and has a randomized withdrawal trial design. All patients initially received Relacorilant for 22 weeks in an open label part of the study. Those who meet response criteria are randomized to continue treatment Relacorilant or placebo for 12 weeks. We had our investigators are eager to take 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 sun up, our commercial business continues to generate substantial profits, even after funding all of our development programs. We are extremely optimistic about the present future of our Cushing syndrome business are 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 cortisol manipulation can provide substantial benefits. Ovarian cancer is a prime example. But there will be others are just open most multinational trial and ALS has real promise, we will have important data from our anti-psychotic induced weight gain later this year as a net from our NASH program in the first half of next year. A whole academic field in the use of cortisol modulation, and alcohol and other addictions is all banish. And in addition to relacorilant, miricorilant and Dazucorilant, we have many, we have many other cortisol modulators in our portfolio with potentially very different clinical attributes. Of course, it is steadily advancing across multiple fronts. Thank our dedicated creative employees and our loyal investors for making this possible. I'll stop here for questions for questions.

Thank you. At this time, we'll conduct a question-and-answer session. [Operator Instructions] 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. And I really appreciate the overall pipeline overview. I just wanted to touch on a point, Joe, that you brought up the beginning of your of your comments, just talking about the limited interactions that are still occurring in the doctor's offices there. And I just wanted to kind of understand, I guess, better understand that because we're clearly not in the in the peak of COVID anymore now and things have relatively gotten back to normal. And 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 just kind of what is going to be the push to, to kind of get things back to where they need to be is it is our patients really having a hard time getting appointments with the endocrinologist to see their follow up or the lab issue or just I'm just trying to understand that there's a lot of moving parts, but kind of what is kind of the overall stop gap that's really causing the problem here on growth Corcept?

Yeah. And I think we really do understand your question. And 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, and thanks for the question. And again, as just stated that interactions really have not returned for us to pre pandemic levels. And right now, we're not sure if they ever Well, as a company, we spend a lot of time educating on disease. And if physicians aren't aware of hypercortisolism, and they're not aware that it could be a source of their patient's comorbidities, they don't look for it or screen for it. So we worked hard, we'll continue to work hard to find new ways to operate what we perceive to be this new normal and will continue to innovate. And I'm confident that, we'll continue to find new and creative ways to reach our target audience. And 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 up to seeing clinical specialists in the past I would say somewhat taken advantage of the change and of the situation now and closed their doors to pharmaceutical reps which is a shame because a lot of newest -- the newest information and science actually delivered by industry

Edward, what I what I'm really just like to answer the question, just to really give you the kind of full round is that. I agree with you, you know, when I'm out now it seems as if that many things are back to pre-pandemic normal, although not entirely. And physician you know, as a physician myself, I can tell you that there are many doctors whose practices have changed in character to, to some degree. Now, our major effort in terms of sales really always relied on, particularly at the very beginning, before a physician had prescribed. Many in person sessions, this person was educated to a doctor was educated over a period of time where they began screening. But I think the reality is that while many practices, in some ways, return to normal, I think that other 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. And I'm really very confident that we have we have very specific ideas of how to do that. But we're now accepting that this is how the world is going to be going forward. And we're going to operate from that perspective.

Great. Thanks so much.

Okay. 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, and then you talk about your commitment, and, you know, importantly, visibility in continuing to achieve a double digit growth, growth profile as we look towards 2023. And afterwards, and then number two, maybe comment on the anti-psychotic induce weight gain trial, you're going to have some data by year end remind us what we showed on percent weight loss, and the level of efficacy you hope to see for a Phase 2 study? And maybe the follow up on that, what opportunities do you see outside of AI, WG and Nash? And I'd be curious to get your view on the broader applicability in much larger markets?

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

Yeah. Thank you for the question. And I want to remind everybody about the significant growth potential that exists in this market. I mean, there is now a substantial amount of independent -- independent research that suggests that I've recordable ism is potentially far more prevalent than previously thought sillery disease, but because there'll be 30 to 40,000 patients, yes. And we're focused on unlocking our full potential. So despite some of these current challenges that we just went through, you know, we're confident in our path to sustained growth. But I thought I'd maybe take a minute to tell you a little bit of a, what a couple of those key strategies are, we talked about how access has been an hour. So one of our key focus areas is to increase position interactions and we're going to do that by increasing the size of our customer, customer facing team and the support groups around that and working to improve the productivity of that team. The second big focus area for us is really around increasing screening and referral rates by raising awareness and specialties that we believe have enriched patient populations. So I'm going to give you a couple examples. For example, number one, dermatologists see a large number of treatment resistant diabetics. Yeah, they do not routinely screen for Cushing's Syndrome, even though literature states that anywhere from 8% to 10% of this population may have hypercortisolism. As another example, radiologists frequently discovered renal nodules during routine abdominal scans. However, those patients are often not referred to an endocrinologist for workup, even though radiology guidelines that they should be. So not all specialties are aware of hypercortisolism and because of this, many patients go undiagnosed. And we're very focused on changing that. We're going to use various marketing channels, as Joe mentioned, to get the message out to these customers, through in person print and digital means. Not all these patients will be problem candidates. But some will. And really, I think sum it up, all of our strategies and tactics are focused on increasing physician interactions, raising hypercortisolism awareness, 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, and I'm going to turn it over in a second to Bill Guyer, who's our Chief Development Officer and responsible for all the drugs development including antipsychotic induced weight gain, but just one small point. But I think it's an important one, you mentioned, olanzapine and just a factual point olanzapine is for the prevention of antipsychotic induced and olanzapine induced waking but not for not for weight loss. I think that's an important distinction. So I'll turn you over now to Bill and give you an answer to your variety of questions.

Thank you very much. So regarding our antipsychotic induced weight gain focus, it's from the GRATITUDE and GRATITUDE II studies. And yes, we will have data by the end of this year. And we expect to evaluate both of those studies individually, but also collectively pooling the data, we just make sure we fully understand all of the data from these trials, because we really think that we've got to take a holistic review of all of the data. And as Joe had stated earlier, we want to make sure that we analyze the data not just on the primary focus of weight gain, but also all of the other metabolic factors, and in addition importantly, psychiatric measures. And so that's going to be our focus is to make sure that we fully understand all of that data, because we believe, when we produce the results, and we communicate those results, we want to make sure that we're clear where we understand and therefore you understand the benefit that miricorilant can bring to these patients. See, I think, Dennis, you also ask the question about the larger issue of maybe weight loss in general, and I just want to make sure all the listeners know that we have no programs in weight loss as an entity. This really is about the specifics of patients who have gained weight by taking antipsychotic medications, medications like olanzapine, Risperdal, Seroquel. That's where we're aiming right now. It's a very different program to consider for weight loss in general. Next question, please.

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

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

Sure.

But quick follow up on miricorilant. It sounds like you'll be when you make the announcement you'll 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 and in antipsychotic induced weight gain or reversing antipsychotic induced weight gain. And we think they're going to provide a very rich data set, which will indicate our best path forward.

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

Let me return you to Sean Maduck for that answer.

So just to clarify, the question is the forward looking through the end of this year, that growth is driven by new patients and more tablets out the door to those patients. And to your question about dose, our dose rarely changes. It's been the same, same average dose for many years.

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

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

Yes, very similarly to how I respond in the past on this one. We haven't seen an impact. And we're pleased honestly that more companies are out there talking about proposals. And that raises awareness, which I just mentioned, is lacking in certain areas and ultimately in all stations.

Okay, and on [Indiscernible] has patient enrollment been hitting your target?

Bill?

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

Yes, your question was a little hard to hear. I'm going to repeat it. And then I'll answer the question I thought I heard and we'll go from there. I think you were asking is what is it 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 -- is that that question is? We don't know the prevalence. I don't think anybody knows the prevalence. I don't think it's been counted in that way. But it's not zero. Without a doubt, these are patients who have overweight, and they have -- often in many cases have had been overweight for a real period of time. And those certainly -- those two characteristics are certainly carried correlated with the development of fatty liver disease and NASH. So I can't answer your question quantitatively or qualitatively. It's certainly something which 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 the CNS and neuro muscular patients seem to experience cortisol dysregulation, so love to get your commentary on that?

You know, good, thank you for giving me the opportunity to talk about that. It's really been known for quite a while, probably 20 years that patients with ALS have hypercortisolism, the exhibit hypercortisolism, 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 a very strong academic researcher who treated an animal model that involved -- that was sort of the standard animal model for ALS, and found that treating them with a cortisol modulator really led to pathological clinical improvements. Now, how they relate to, I'm not sure if the question was about 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 actually heard that question posed before, and I'm not sure I've ever seen any literature on it.

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

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

Yes. Thank you for that question. So for the sub-study, I mean, our focus mainly is around liver fat reduction. And the reason for that is it's been seen in most literature that when you get at least a 30% drop in liver fat reduction that corresponds to getting improvement in fibrosis. Now, within the Phase 1b study, we're not looking at fibrosis at this time, but there were other non-invasive markers that we're going to be using and analyzing as those biomarkers to look at improvements in liver fibrosis. Take -- we will then take those learnings and apply them as we move forward to a Phase 2 study and use those same parameters and/or use liver biopsies as well. But yes, we will be gathering biomarkers to look at different fibrosis to see if we're seeing improvements there as well.

Thank you looking forward to the next month.

Yes. All right. Thanks. Thank you, Alan. And thank you to everybody who's listened in. Look, you're really 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.