Corcept Therapeutics Inc (CORT) 2016 Q1 法說會逐字稿

Welcome to the Corcept Therapeutics conference call. My name is Anna and I will be your operator for today's call. At this time, all participants are in a listen-only mode. Later we will conduct a question and answer session. Please note that this conference is being recorded.

I will now turn the call over to Charlie Robb. Please go ahead.

Thank you. Good afternoon. My name's Charlie Robb, Corcept's Chief Financial Officer. Joining me today is Dr. Joseph Belanoff, our Chief Executive Officer. Thank you all for participating in the call.

Earlier today we issued a news release giving our first quarter 2016 financial results, a reaffirmation of our 2016 revenue guidance, and a corporate update. To get a copy of this release, go to Corcept.com and click on the Investors tab. 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 through May 17th, 2016 at 1-888-843-7419 from the United States and 1-630-652-3042 internationally. The passcode is 42398569.

Before we begin, I want to remind you that any statements during this call other than 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 anticipated revenues and expenses for 2016 and beyond; the pace of Korlym's acceptance by physicians and patients; the anticipated contributions of our sales organization; the cost and timing of preclinical and clinical trials, whether conducted by us or by our academic collaborators, and the results of such trials; the clinical attributes and advancement of our next generation selective cortisol modulators, including CORT118335, 125281, 122928, and 125134; the protections afforded by Korlym's orphan drug designation for Cushing's syndrome or our other intellectual property rights, including our patents concerning the use of cortisol modulators to treat triple-negative breast cancer and castration-resistant prostate cancer.

These and other risks are set forth in our SEC filings, which are available at our website, Corcept.com, or from the SEC's website, SEC.gov. We disclaim any intention or duty to update any forward-looking statement made during this call.

Now I'll review our preliminary financial results. Corcept's net revenue in the first quarter of 2016 was $16.1 million compared to $10.1 million in the first quarter of 2015, a 59% increase. We expect our growth to continue and reiterate our 2016 revenue guidance of between $76 million and $81 million.

In the first quarter, Corcept recorded a GAAP net loss of $19,000 compared to a net loss of $4.8 million, or $0.05 per share, in the first quarter of last year.

Our cash balance at quarter end increased to $40.7 million, up from $40.4 million at December 31st. Our increase in cash is after a payment of $3 million in principal and interest under our capital royalty financing arrangement. We expect to make our final payment under that obligation in 2017.

As we have said in past calls, we believe revenue from our Cushing's syndrome business, together with our cash on hand, will be sufficient to fund our planned activities, which include fully funding our Cushing's syndrome franchise; completing our Phase 1/2 study of Korlym for the treatment of triple-negative breast cancer and, if that study produces positive results, conducting a Phase 3 study; conducting Phase 2 studies of our proprietary selective cortisol modulator, CORT125134, in both Cushing's syndrome and solid tumor cancers; advancing to the clinic at least two more of our next generation cortisol modulators; and repaying the balance of our capped royalty financing obligation.

I will now turn the call over to Dr. Belanoff. Joe?

Thank you, Charlie, and thank you all for joining us. Before I talk about our recent results and key development programs, I want to set our first quarter accomplishments in context by briefly discussing Corcept's business model, which is different from that of most other biotech companies.

First, the scope of the therapeutic platform we are developing, cortisol modulation, is exceptionally broad. Our research, together with the work of our academic collaborators around the world, has shown that cortisol, also known as the stress hormone, plays a role in many serious illnesses.

Preclinical and clinical studies using mifepristone, the active ingredient in our approved product, Korlym, and our proprietary selective cortisol modulators have generated promising data in a wide range of disorders. The most prominent of these is Cushing's syndrome, which Korlym treats and for which we are advancing our lead selective cortisol modulator, CORT125134, to Phase 2 this quarter.

Studies of cortisol modulation as a potential therapy have also yielded positive results in oncologic diseases such as triple-negative breast cancer, ovarian cancer, and castration-resistant prostate cancer, metabolic disorders such as antipsychotic induced weight gain and non-alcoholic fatty liver disease, and psychiatric indications such as post-traumatic stress disorder and alcohol and cocaine dependence.

The second and perhaps most uncommon feature of Corcept's business model, among biotech companies at least, is that our revenue pays for our planned development program. To be sure, our top priority right now is not increasing our cash reserves.

Our bottom line will fluctuate from quarter to quarter as we use our increasing revenues to broaden and advance our cortisol modulation platform. Nonetheless, we have built a fundamentally sound business that has grown significantly since Korlym's launch and will, we believe, grow much more.

Finally, an important feature of Corcept's business model is that we are able to rely on the work of our academic collaborators to identify target indications efficiently and, in many cases, to produce the preliminary preclinical and clinical data we need to develop medications.

This distributed approach to research and development has important advantages. From the perspective of Corcept, it is very efficient. In return for providing our independent investigators with mifepristone or samples of our proprietary molecules, we receive access to data generated by their creative and insightful research that informs our development decisions.

We initiated our own oncology program, for example, because preclinical and clinical work by researchers at the University of Chicago had generated compelling evidence at virtually no cash cost to us that cortisol modulation can be used to treat certain solid tumor cancers.

Now that I've pointed out some of the less common and valuable attributes of Corcept's business, a therapeutic platform and portfolio of compounds with the potential to produce treatments for a wide range of diseases, a self funding operating model, and a development program that benefits from the expertise and findings of academic researchers around the world, let me summarize our most recent results.

As Charlie mentioned, revenue from our Cushing's syndrome business grew 59% in the first quarter compared to the first quarter of 2105. We expect growth to continue and have reiterated our full year 2016 revenue guidance of between $76 million and $81 million.

During the first quarter, our cash balance increased slightly even after payment of $3 million in principal under our capped royalty financing arrangement.

In an important step toward securing our Cushing's syndrome franchise, our lead selective cortisol modulator, CORT125134, will enter Phase 2 to treat patients with Cushing's syndrome by the end of this quarter.

Our expectation, based on substantial preclinical and clinical data, is that CORT125134 will share Korlym's effectiveness while having the significant advantage of not causing the side effects associated with Korlym's affinity for the progesterone receptor, such as irregular vaginal bleeding.

Our oncology program continues to progress. Our Phase 1/2 trial of mifepristone in combination with eribulin will generate results by midyear. We have broadened our oncology program significantly by starting a Phase 1/2 trial of CORT125134 in combination with nab-paclitaxel, which is the generic name for Celgene's drug Abraxane, to treat patients with solid tumor cancers.

Lead candidates from our proprietary portfolio of selective cortisol modulators continue to progress towards the clinic. CORT118335 has shown promise in animal models of fatty liver disease and other metabolic disorders. We expect it to enter Phase 1 by this time next year.

CORT122928 is effective in animal models of Cushing's syndrome and alcohol withdrawal. CORT125281 is a candidate for treating ovarian cancer, triple-negative breast cancer, and castration-resistant prostate cancer. These compounds are also moving towards Phase 1 next year. As they progress, we are conducting our own research and monitoring the work of our academic collaborators to identify therapeutic targets.

I'll briefly review our key programs and stop to answer your questions. As most of you know, our first product, Korlym, has been approved for the treatment of endogenous Cushing's syndrome, an orphan disease that affects about 20,000 patients in the United States.

Cushing's syndrome is the archetypal disease of cortisol excess. It is caused by a tumor that produces either cortisol or ACTH, a hormone that produces -- that causes the body to produce cortisol. Because there are cortisol receptors in nearly every human tissue type, patients with Cushing's syndrome become sick in many ways.

Left untreated, the disease can be deadly. Approximately half of patients with Cushing's syndrome are cured by surgery. The other half, approximately 10,000 patients in the United States, are candidates for treatment with Korlym.

In the first quarter of 2016, we added new patients and new prescribers, as we have done very quarter since launch. Physicians who had already prescribed Korlym introduced new patients to the medication.

Our clinical specialists and medical science liaisons continue to refine the way they speak to endocrinologists about Korlym as a treatment for Cushing's syndrome. Our patient advocates and specialty pharmacy personnel continue to improve the support they provide patients.

These tightly coordinated activities contributed to our first quarter revenue growth. Just as important, these activities continue to solidify our position in the Cushing's syndrome market, with our highest emphasis on increasing our knowledge of the disease and making sure that patients are supported at every point of their treatment.

We expect significant growth in our Cushing's syndrome business over the coming years. Many of the 10,000 or so patients who could benefit from Korlym have yet to use it. We are constantly refining our skills to ensure that every patient who can be helped by Korlym will get a chance to try it.

We have said before, most recently in a press release issued last week that you can find under the Investor's tab of our website, that we plan to solidify our position in the Cushing's syndrome market by advancing next generation cortisol modulator CORT125134 to Phase 2 later this quarter.

Let me provide a bit of background as to why we think this compound is so promising. Although Korlym is an excellent treatment for patients with Cushing's syndrome, it has some drawbacks, the chief being that it blocks the progesterone receptor and, in some women, causes endometrial thickening and irregular vaginal bleeding, nonthreatening -- non-life threatening, manageable side effects, but ones that patients and physicians would prefer to avoid.

CORT125134 has a potent affinity for the cortisol receptor, also known as the glucocorticoid receptor or GR for short, but does not act as a progesterone receptor and so will not cause the side effects I have just described. Further, data from the compound's Phase 1 trial show that it appears to share Korlym's ability to potently reverse the effects of excess cortisol activity, the essential quality in treating Cushing's syndrome.

Because it appears so far to share Korlym's efficacy but without its propensity to cause endometrial thickening or irregular vaginal bleeding, we believe that for some patients CORT125134 will prove to be superior to Korlym. Our Phase 2 trial will be open-label and will enroll 30 patients. We look forward to seeing the data it produces.

Before I discuss the particulars of our oncology program, let me briefly explain why we believe cortisol modulation can be used to treat certain types of cancer. In some cancers, such as triple-negative breast and ovarian cancer, activity at the cortisol receptor promotes tumor growth. To simplify, after binding to GR, cortisol stimulates genes that retard cellular apoptosis.

Modulation cortisol's activity with a competitive GR antagonist such as Korlym, CORT125134, one of our other next generation compounds, should help combat the disease by increasing the tumor apoptosis triggered by chemotherapy.

There is another, more systemic mechanism. Cortisol suppresses the body's immune response. This has the benefit of reducing the frequency of autoimmune diseases, but also reduces the immune system's ability to fight certain cancers. The realization that the patient's own immune system can be enlisted to treat the disease has fueled the current interest in checkpoint inhibitors, including PD-1 inhibitors.

What has been less widely appreciated is that cortisol modulation's ability to bolster the immune system may also be a powerful therapeutic tool, especially when combined with another anticancer agent such as a chemotherapeutic agent or PD-1 inhibitor.

In cancers such as melanoma that are particularly susceptible to the body's immune response, cortisol modulation may even prove to be useful without a companion agent. Our oncology program is based on the insights I've just described, which originated with our academic collaborators and have been validated by our own studies in animal models of different tumor types.

In the press release we issued last week, we provided data showing mifepristone and CORT125134's efficacy in mouse models of triple-negative breast cancer, prostate cancer, and colon cancer.

At midyear we expect to have efficacy results from our Phase 1/2 trial of Korlym in combination with the drug eribulin to treat metastatic triple-negative breast cancer. At a reminder, eribulin is the generic name for Eisai's drug Halaven.

By way of background, patients with triple-negative breast cancer have tumors that do not express the three receptors, estrogen, progesterone, and HER2, to which medications like tamoxifen or Herceptin bind, which means that those medications cannot treat the disease. The great majority of triple-negative breast cancer tumors do, however, express GR.

Forty thousand women in the United States are diagnosed with this disease every year. There is no FDA approved treatment, and patients with metastatic disease have a dire course.

Our open-label trial is enrolling 20 women with GR positive, metastatic, triple-negative breast cancer. Each of them will receive 300 milligrams of Korlym every day and 1.1 milligram per meter squared of Halaven on a 21 day cycle.

The preliminary efficacy data we presented at the San Antonio Breast Cancer Symposium in December 2015 were promising. We will need to complete the study before deciding the next appropriate steps.

In the first quarter, we opened the first site in our open-label Phase 1/2 trial of CORT125134 in combination with nab-paclitaxel to treat solid tumor cancers. The trial's design is similar to that of our trial of mifepristone plus eribulin to treat triple-negative breast cancer.

The first phase will determine the maximum tolerated dose in patients with any solid tumor cancer susceptible to treatment with nab-paclitaxel. Once a maximum tolerated dose is identified, we plan to open 20 patient expansion cohorts to test the combination's efficacy in one or more of the solid tumor cancers studied in the dose-finding phase.

Possible target indications include triple-negative breast cancer, castration-resistant prostate cancer, ovarian cancer, pancreatic cancer, and sarcoma. We may also study CORT125134 in combination with different companion therapeutic agents, including PD-1 inhibitors.

I will close with a brief discussion of Corcept's portfolio of preclinical programs. As many of you know, we continue to advance leading candidates from our proprietary portfolio of more than 300 selective cortisol modulators. These compounds all bind to GR and none are active at the progesterone receptor but -- and this is important -- they behave some differently from one another.

Some appear to be tissue specific, for instance. Others are not. This variability should allow us to develop compounds that target specific indications.

For instance, in animal models, CORT118335 appears particularly potent in fatty liver disease, an illness suffered by millions of Americans, but is not as active at CORT125134 in animal models of Cushing's syndrome. The differentiated quality of these compounds will allow us to develop medications for relatively common disorders without undermining our more focused product offerings.

The preclinical development of our next generation cortisol modulators continues to advance. CORT125134 is obviously the farthest along, but CORT125281, CORT118335, and CORT122928 continue to progress. We hope to have them in human testing early next year. As our preclinical work progresses, we will look to our own research and the studies of our academic collaborators to identify therapeutic targets.

To sum up, revenue from our Cushing's syndrome business reached $16.1 million in the first quarter, a 59% increase from the same period last year. We reiterate our 2016 revenue guidance of $76 million to $81 million. We continue to believe that our cash flow together with our cash on hand will fully fund the planned development of our cortisol modulation platform, which shows increasing promise in providing treatments for a wide variety of serious illnesses.

Our lead next generation compound, CORT125134, will enter Phase 2 for the treatment of patients with Cushing's syndrome at the end of this quarter. Preliminary preclinical and clinical data suggest that this compound may offer patients Korlym's benefits but without the side effects associated with Korlym's affinity for the progesterone receptor.

Our oncology program also made important strides. The preliminary efficacy data from our Phase 1/2 trial of Korlym to treat triple-negative breast cancer that we reported last December was encouraging, and we expect to complete the trial by midyear.

CORT125134 began its own Phase 1/2 trial in combination with nab-paclitaxel for patients with solid tumor cancers. The trial's flexible design will allow us to investigate other companion agents and tumor types, should we choose.

Finally, promising next generation compounds continue their preclinical development. We hope to advance several of them to the clinic by this time next year.

I'll stop here and answer any questions.

We will now begin the question and answer session. (Operator instructions.) Charles Duncan, Piper Jaffray.

Okay. Hi, guys. First of all, thanks for taking the questions and congrats on a good quarter of progress.

Thanks, Chas.

So, my first question really is on the ASCO meeting coming up. It sounds like, I mean, you've been making progress on triple-negative breast cancer with mifepristone, and I'm just kind of wondering why you didn't have that data for ASCO. Is it pushing out in part due to patient enrollment? And then also, how many patients do you anticipate being able to include in that data in midyear?

Okay, so it's a couple questions. Chas, we actually will have a -- in fact, we've already submitted our abstract for it, and it will be presented at ASCO. And we will present an up to the moment evaluation of where we are at that point.

But, the study is still ongoing and is not complete. We don't anticipate it will be complete because patients are still active in it at the time of ASCO. And of course we'll produce the results as finally complete.

But, as you know, our idea really is this is an open-label study. And this is a major meeting that we thought that, as we did with the San Antonio breast cancer meeting, that we would present exactly where we stood at the time of the ASCO meeting. And we will do so, although as I said, I think the study will continue to go beyond that point in time.

Okay. So, you're not really targeting -- I mean, you are targeting midyear, but in addition there'll be information at ASCO.

That's right. Midyear is our best estimate, but we actually will give up to date -- up to the moment information at ASCO as to exactly where we stand at that point.

It depends on event rates in terms of responses, etc., right?

That's correct, progression-free survival, response rates, so on and so forth. We will characterize the patients as broadly as we can, just as we did at the San Antonio breast cancer meeting, to give you the most up to date update we can at that point.

Okay, that's helpful. And then moving on to 134 in terms of oncology, I'm wondering what kind of patients you'd like to have in that study. Do they all need to be expressers of glucocorticoid receptor? Will you be testing for that, or will you just be kind of taking all-comers and then testing for that?

Well, Chas, I'm actually going to take the opportunity to take a breath and introduce you to Bob Fishman. I think you may have met at the last call. Bob is our Chief Medical Officer, and he can answer that question for us.

Hi. Thanks for your question. As you know, the study will have two parts. The first part is dose finding and then we will advance to a variety of dose expansion cohorts.

The dose finding phase of the study will enroll all-comers with solid tumors for whom the investigator has decided that nab-paclitaxel is an appropriate treatment. We will be of course assaying for GR positivity, but that will not be a requirement for their entry and beginning in the entry -- excuse me, at the time of entry into the study.

Similarly, for the dose expansion cohorts we will -- it's typical that the results of the GR assay become available some time after enrollment. That was one of the lessons learned from the mifepristone/eribulin trial. So, we will gather those data. But, again, at the time of entry, patients who are suitable candidates will be allowed to enroll into the selected dose expansion cohorts, which are to be determined at this time.

Hey, Chas, let me just elaborate just a little bit on that. A very interesting thing that we learned last summer was we did a large tumor bank screening, I think the first one which had ever been done, certainly by far the largest for GR positivity in a variety of tumors.

And we actually found several interesting things, one of which we've already talked about, which is that triple-negative breast cancer, although in the literature it had really talked about sort of being 25% to 50% GR positive, it's really proven to be much closer to 100%, certainly above 75%. And that's really proven to be the case in the current study we're running.

Now, what's interesting about that is I think that there are tumors that are in fact very GR positive and some tumors which are not so GR positive. But, we're really still gathering that information.

And I think that really will be part of what we're thinking about as we go to the expansion cohorts, whether or not we really do have to select along those lines, or whether or not it's a particular tumor where one would expect most of the patients to be GR positive and therefore be in some sense automatically eligible for treatment with the GR antagonist.

That's helpful. I was wondering if this could be potentially a companion diagnostic in the future, but it seems like you're still defining what GR positivity means and how it correlates with potential response in these patients.

And whether or not in fact the prescreening tool is actually the most efficient way to go. But, yes, it's something that we think about all the time.

Okay. And then my last question and then I'll hop back in the queue is more operational, and to Korlym revenues had a good year-on-year growth. I'm wondering about the quarterly or sequential growth. I know that this is a little bit of a mathematical issue or a denominator issue. But, I'm wondering about the growth rate, if you will, and if that's a function of something that happened perhaps last year that made it very high versus this year, and what you plan to do to continue to drive Korlym revenue growth.

Chas, I'm just going to point you to Charlie who's going to answer the question.

Hey, thanks, Chas. We had the challenge in the first quarter of this year that's the same as the challenge we really had in all of the fourth -- first quarters we've operated in since launch, which is, as you know, insurance companies tend to put their patients, especially their patients -- orphan drug patients through a reauthorization process at the start of every year.

Now, for a lot of patients, this is really bad news because they're denied access to medicine while they straighten our their insurance and go through the reauthorization process. We don't do that to patients. We continue to provide them with medicine and assist them as we can as they work through the reauthorization, which we do with great success typically.

But, what that does mean for us is that, in the first quarter, typically we have patients shift from commercial to free drug for a time before coming back. So, we do the right thing by the patients and make sure they get their medicine. This is a challenge that we anticipate every year, and it's something that we took into account when we generated our revenue guidance, which is why we're -- for the year, which is why we're comfortable reiterating it now.

We put in place programs this year to shorten that time of the reauthorization. Some of them worked. Many of them didn't. And we already are working on our ideas for next year. So, that's just a headwind that we've run into every first quarter.

Okay, that's helpful. Thanks for the added color, Joe and Charlie. And have a good day.

Thank you, Chas.

Chris James, FBR Capital Markets.

Hey, guys. Thanks for taking the questions, and congrats on another stellar quarter.

Thanks.

I guess my first question is on the existing Cushing's business. Maybe either one of you guys can speak to the incremental effects of the sales force expansion that you're seeing. And maybe do you see an opportunity to potentially further expand the sale team?

Oh, that's great. Thank you for the question. And let me introduce the whole audience to Sean Maduck, who is our Senior Vice President of Commercial and runs the whole Cushing's syndrome franchise.

Chris, thanks for the question. And maybe just stepping back just to remind everyone on sort of the growth of last year, we made a decision early in the year to increase the size of the sales force pretty substantially by about eight clinical specialists, up to 25. And a good part of the early part of last year was training up those individuals and getting them into the field.

And one things we've touched on previously is that it takes up to five to seven touches to actually move an naive physician to being a productive physician. And I can tell you that that expanded field force as well as our existing clinical specialists have been productive. We've seen an increase in productivity both in Q4 as well as in Q1, and dispersed enrollment activity from across the country.

One other thing that I think is important to remind everyone of in terms of our model is that, when patients first come onboard, it's a chronic condition and it takes a while for these patients to dose to their most efficacious dose. So, they come in at 300 milligrams, and it does take some time to get to the optimal dose which then drives, from a value standpoint, revenue in the organization. So, there's anywhere for a three to six month lag on that increased activity to actually sort of appear in terms of output from a model standpoint.

So, your second part of your question is in terms of expansion. I mean, we are always looking at opportunities to increase the size of the field where appropriate. We will not add bodies to just add bodies. But, where we feel we can hire the right talent in a territory where we can have incremental gain in the organization, we will do that.

So, since we last talked, we actually have increased the size of the field by a couple of clinical specialists, and we're now at 27 plus our four regional managers. And we also have eight MSLs and one MSL head. So, we continue to, again, look for the opportunistic both territory and individual to bring into the organization to grow when appropriate.

Hey, Chris, I'm just going to -- just because I think it's important, I want to make sure that whole audience gets it. I just want to reiterate a couple of things that Sean said.

One is that, as we talked about before, we think it takes -- we've now done it for multiple years, really about six months to train people up to the point where they are really productive. And that, for us, was about the first of the year.

The new group of reps were very productive in the first quarter. But then again, as Sean really points out, we can see their productivity, but it doesn't show up in a financial way as much as it's going to show up as the year goes along, just because of this being a chronic illness and the way the medication is dosed.

So, again, as we expected, that was how we hoped it would go. And we hope, fingers crossed, that it continues in that way as the rest of the year progresses.

Great. That's helpful. And then on CORT125134, can you discuss maybe what you're seeing or how you're thinking about this pharmacologically, really sort of what drives the decision to combine it with Abraxane, nab-paclitaxel versus eribulin with mifepristone? Just what's the sort of rationale there?

Yes. I think I can really answer your question more generally, which is that at this point in time we think that GR antagonism can enhance any treatment that has a tumor that is potentially sensitive to cortisol, regardless of what the background therapy is. And we're really at the sort of the discovery point as to what the best companion therapy might be.

As you know, with mifepristone there's actually been the study which was done with nab-paclitaxel. We're now doing one with eribulin. There's another one going on with the combination of gemcitabine and carboplatin. And there's no a priori guess as to which the best of those are going to be. We think that this -- for GR positive tumors, there an enhancement of chemotherapy no matter what the chemotherapy is.

Now, it happens that nab-paclitaxel is sort of a broadly applicable chemotherapy, so it's a good first companion agent for 125134. But, I just want to make sure everyone understand that this is the first potential combination that we might use. There might be others involved. And in some sense, you have to start somewhere, and this was really a very reasonable place to start.

I mean, one of the things that we put out in our press release of last week which I just thought was intriguing -- it was the very first animal study that we've done, but it was an interesting one to do was that we looked at a PD-1 inhibitor in an animal model of colon cancer in combination with CORT125134. And it clearly, in a highly statistically significant way, enhanced its effect.

So, I just think for the audience generally, I think you have to understand that I think this is a very interesting modality of treatment, and we're really learning ourselves where it could best be applied. There's really in some sense no more to it than that.

Got it. Thanks, Joe. And then finally, can you may address some of the -- you have a lot going on with the investigator sponsored trials. I think the post-traumatic stress disorder study is pretty interesting. Maybe -- can you discuss maybe the rationale and when could we potentially see some data there?

Yes, I'll try to do it briefly because I don't want to take the rest of the afternoon for what's a really interesting topic for me.

Sure.

It may be more interesting to me than almost anybody. But, in some sense, I think everyone understands that, by its very nature, post-traumatic stress disorder is related to cortisol. Stress -- we talk about it in laymen's terms. Stress is actually the physiologic expression of too much cortisol activity.

And we really think that potentially by modulating that, we might be able to not only treat post-traumatic stress disorder but prevent post-traumatic stress disorder. And maybe really the primary reason is that memories which form under high stress states are very, very different than memories which form under normal stress states.

And there are potential treatment which can take advantage of that by reducing cortisol activity as patients are actually brought through on a psychotherapeutic level to deal with the trauma that they've faced.

Now, the VA ran a -- the Bronx VA ran a pilot study with mifepristone I guess about four years ago, a small study but with big effect size, quite positive results. And the VA is now paying for a much larger study which is ongoing, again arm's length from Corcept although we provide the medication, to try to utilize cortisol antagonism as a treatment in post-traumatic stress disorder.

And as I always point out to people, the timeline is not as tightly under our control as when we do our own study. But, it is progressing. We know that it is, and we think that results in it will -- certainly those cards should be turned over in the next 12 to 18 months.

And I think there is a lot of good preclinical and actually human data that would be -- that would point us in the direction that this might be an effective therapy. So, yes, that is one of the investigator studies which has a particular interest to me. It's got a relatively near term readout and good science behind it.

Thanks, Joe. Appreciate it. I'll jump back in the queue.

Okay, thank you. Sure.

Roy Buchanan, Janney Montgomery.

Hi. Thanks for taking the questions. I guess just on the same lines as the last question, can you update us on the alcohol dependence studies? What's going on there?

Yes, I'd be glad to, Roy, and thank you for asking about it. I think as many of you know there is -- if you follow the Company more closely, there really is a very interesting scientific program which has now in later years proceeded to a clinical program on the use of cortisol modulation to help with addictions.

And you've asked specifically about the alcohol addiction and I'll point to that. Basically -- and again, I'll tell the story very briefly. You've probably all heard some form of the joke. It's easy to -- it's not that funny, but it's easy to quit alcohol. I've done it a hundred times.

That's the problem. The problem is that it's actually very stressful for people who have used alcohol on a chronic basis to stop drinking, and one of the things that -- where an intervention really might be most effective is actually at the beginning as people begin to come off alcohol and see if they can really get them to stay off.

And I think that the issue really is that the stress that they feel when they stop drinking is actually very supportive of the cravings they feel to restart drinking. And if it can be modulated in that early period, essentially in the first few weeks before that, you might really do a much better job of getting people who really do want to quit drinking to be able to quit drinking.

And again, I'd point you to the academic papers. This started as an animal-based model and then ultimately was in a double-blind human study which was done at Scripps. And it's now in a much larger study also being led by Scripps. I know it has enrolled well.

It's again not a joke, but there are plenty of people who want to quit drinking. And we also expect that that data -- although again I have to always give the same caveat, not under our control, that that data will actually turn over results in the next 12 to 18 months too.

Okay, great. And then to circle back on the 125134 in oncology, you guys had the press release with some interesting data in the mouse xenograft last week where it looked like there was at least a trend to efficacy superior to mifepristone and PD-1 inhibition for 125134. Do you guys have any ideas about a possible mechanism, why that might be the case?

Well, I have to just ask the -- sort of answer that more broadly. It's a subtle and interesting question. One of the things that we -- and again, I'll take you back again for context.

For those who have followed the Company for a long time, our initial goal was really to see if we could just create mifepristone without progesterone antagonism, for all the reasons we've talked about many, many times, and really come up with a single follow on drug.

But, when we started to actually do empirical testing on it, we found out that these compounds were not identical, although they all shared the property of cortisol modulation with no activity at progesterone. And it really turned out, I think again on an empirical basis as we started testing them, some were more potent at creating insulin sensitivity. Some were more potent at creating weight loss. Some got into the brain. Some didn't get into the brain.

And then as we began to test them in our oncologic models, some were more potent at mifepristone and some were less potent in mifepristone. And it turns out that 125134, for reasons we don't entirely understand but we really are exploring with our academic investigators as well as our own work, is pretty consistent.

Mifepristone is a good companion agent. In the preclinical model so far, 125134 has been even stronger. And we'll just have to see whether that actually translates to the human effect in the study that Bob and his group are currently running.

Okay, great. And then I had a question to follow up also on the prior study of Abraxane plus mifepristone in breast cancer. I think investigators made some comments about metabolic interactions and influencing the dosing. Is that not going to be the case with 125134? Is it metabolized through a different pathway, and are you not as worried about potential dosing interactions? Thanks.

Well, it's actually -- drug-drug interaction is often something that you look at in these early studies. And there is potential for drug-drug interactions with CORT125134. We don't know exactly how it's going to interact, and it's part of what we look at in this form of the study, so to be determined.

Okay, great. Then I had one last question and get out of the line. But, just wondering about partnering interest. I assume you're probably getting inbound interest on the compounds. Are you guys aggressively looking for partnering of any of the compounds? You guys have a pretty large library. Or are partners kind of waiting for -- to see you guys get through a certain phase of development? Thanks.

Well, I thin that you're certainly right in a very important regard, that we have a very interesting portfolio of pipeline compounds. And maximizing their utility to patients is really our goal, and what can get us there in the most efficient way is what we want to do.

I will tell you at this point in time kind of two facts. One, we have the money to advance them in the way that we would like to at this point in time. And I think that's a very nice position to be in.

The other is that we're really, as I've tried to point out through this call, still really characterizing them. There's still information as to where they will work best that is unknown. And I think that they increase in value as we actually do that research.

And that's going to happen, again, as we talked about, in the timeframe that I've discussed, that really, again in the next 12 to 18 months, we'll have a lot more information about where these medications are potentially most useful and can have broader conversations on topics at that point.

But, we have the money to do the information gathering. We think that the information gathering adds value, and that's what we're doing.

Okay, very good. Thanks, Joe.

Okay.

All right. Well, thank you very much for all who participated in this quarter's call, and look forward to talk to you next quarter.

Thank you. Ladies and gentlemen, this concludes today's conference. Thank you for participating. You may now disconnect.