Corcept Therapeutics Inc (CORT) 2018 Q1 法說會逐字稿

Good day, and welcome to the Corcept Therapeutics' conference call. Today's conference is being recorded. (Operator Instructions) At this time, I would like to turn the conference over to Charlie Robb. Please go ahead, sir.

Good afternoon, I am Corcept's Chief Financial Officer. Thank you all for joining us. Earlier today we issued news release giving our first quarter financial results and providing an update on our clinical development activities.

For a copy, go to corcept.com and click 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 22 at 1 (888) 203-1112 in the United States and (719) 457-0820 internationally. The passcode will be 3450659.

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 patients acceptance of Korlym, the cost, timing and results of our clinical trials, including the interim and final results of our trial of relacorilant to treat patients with Cushing's syndrome. Our Phase I/II trial of relacorilant to treat patients with pancreatic cancer and other solid tumors. Our trial of CORT125281 in castration-resistant prostate cancer, our Phase I trial of CORT118335, and our anticipated Phase II trials of CORT118335 to treat patients with antipsychotic-induced weight gain and nonalcoholic steatohepatitis. 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 to treat patients with Cushing's syndrome, triple-negative breast cancer, castration-resistant prostate cancer, pancreatic cancer and other indications.

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

Now I will review our financial results. Corcept's revenue in the first quarter was $57.7 million, a 109% increase from our revenue in the first quarter of 2017. This growth reflects a net price increase of approximately 4% taken at the start of the year, but otherwise, represents broad-based organic growth. More physicians prescribing Korlym to more patients.

As we stated on our last call, we expect revenue for 2018 to be between $275 million and $300 million. We look forward to significant growth in 2019 and beyond.

Our fully diluted net income in the first quarter was $0.14 per share compared to $0.04 per share in the first quarter of 2017. When considering our income, keep in mind that our expenses in the first quarter included for the first time a material amount of income tax, $3.8 million.

Last quarter, we reported a onetime gain of $77 million as we brought on to our balance sheet, the majority of our deferred tax assets, which represent the value of the net operating losses and R&D tax credits we accumulated in the years we spent developing Korlym and our proprietary-selective cortisol modulators.

Having recognize the value of these assets, our income tax expense now reflects both tax we must ultimately pay and the tax we are using our deferred tax assets to offset.

In the first quarter, $600,000 of our tax expense reflects a cash obligation, accrued primarily in states where we do not have net operating losses to offset state income tax.

We will offset the remaining $3.2 million of tax expense entirely using our deferred tax assets. This amount is not a cash expense. Excluding noncash expense related to stock compensation and utilization of our deferred tax assets, our first quarter non-GAAP net income was $24.5 million, compared to $7.4 million in the first quarter of 2017.

Our cash and investments at March 31, were $140.4 million, up from $104 million at year-end.

Our March 31 balance includes the $12.9 million we received in January in settlement of litigation with our former specialty pharmacy.

As we've 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 commercial business, conduct Phase II and Phase III trials of relacorilant in both Cushing's syndrome and solid tumors, conduct Phase I, Phase II and Phase III trial of CORT125281 for castration-resistant prostate cancer and CORT118335 for antipsychotic weight gain and NASH, and advance 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, for joining us today.

Corcept had another strong quarter. Revenue grew to $57.7 million, 109% more than our revenue in the first quarter last year. Excluding significant noncash items, our non-GAAP income was $24.5 million, a 233% increase over the first quarter last year.

Our cash and investments grew by $36.4 million to $140.4 million. We generated these increases despite a commercial challenges we face at the start of every year when many insurance companies force patients to obtain reauthorization of coverage for Korlym and many other medications and suspend reimbursement until that process is complete.

Patients taking Korlym with help from their doctors and our specialty pharmacy eventually overcome this hurdle, and we provide Korlym to them at no cost until they do.

As we've said in past calls, we expect our growth to continue. We are forecasting 2018 revenue of between $275 million and $300 million and expect significant growth in 2019 and beyond. The first quarter growth in our Cushing's syndrome franchise was driven by the factors I've described on previous calls.

Most important, Korlym works extraordinary well for nearly all patients with hypercortisolism. Physicians are increasingly aware that hypercortisolism is a serious condition that merits treatment and are screening more patients for the disorder.

Often patients, who exhibit symptoms of excess cortisol activity, such as glucose intolerance or hypertension, but who have not responded to conventional therapies for those specific problems. When they identify patients with hypercortisolism, physicians have become more likely to select cortisol modulation with Korlym at the optimum medical treatment.

A poster giving one example of the shift in medical practice was presented at the 2017 annual meeting of the American Association of Clinical Endocrinologists or AACE.

An endocrinologist in private practice screened 34 patients with severe Type 2 diabetes, who were taking U-500 insulin. He discovered that 14 with hypercortisolism refused surgery or were not candidates for surgery. These patients were prescribed Korlym. A poster at this year's AACE Annual Meeting, poster number 81995 will present the results. After 6 months of treatment with Korlym, these patients exhibited a 41% reduction in their daily insulin requirement and at the same time, significantly improved glycemic control as demonstrated by among other measures, a 1% or greater reduction in their hemoglobin A1c.

Despite doctors' growing awareness of and willingness to treat hypercortisolism, and despite growing appreciation of Korlym's ability to normalize cortisol's level of activity, a significant limitation of Korlym's potential for growth is unchangeable. Korlym's affinity for the progesterone receptor or PR. PR affinity makes Korlym an abortifacient. Just as important, it causes endometrial thickening and vaginal bleeding in many women of all ages. Physicians and patients would strongly prefer to avoid these effects. Korlym's PR affinity also erects a logistical barrier to patient access. Because its active ingredient is the same as the abortion pills, Korlym's distribution is tightly controlled.

A medication with Korlym's efficacy that did not cause PR related adverse events would be a significantly superior treatment and one that could be distributed more broadly. It would make cortisol modulation safer and easier to access option.

As many of you know, we are conducting the Phase II trial of one of our proprietary selective cortisol modulators relacorilant. A potent cortisol modulator with no progesterone activity. Relacorilant Phase II trial is a 30-patient, open label study being conducted at sites in the United States and Europe.

The trial consists of 2 cohorts: The first low-dose group received a daily relacorilant dose of 100 milligrams for 4 weeks, followed by 4 weeks of 150 milligrams, and then 4 more weeks of 200 milligrams.

This group has completed the study; the second, high-dose cohort follows the same protocol, but with daily dosage of 250 milligrams for the first 4 weeks, followed by 4 weeks each of 300 milligrams, 350 milligrams and 400 milligrams per day. We added the 400-milligram dose because of the lack of toxicity seen at lower doses.

Last quarter, we released top line results from the low-dose cohort. They were striking. At these doses, we expected relacorilant to be very well tolerated and it was. We also did not expect to see much efficacy, but instead, we saw statistically significant improvement in key symptoms of Cushing's syndrome.

Patients with hyperglycemia exhibited statistically significant dose-dependent improvements in glucose tolerance. Serum osteocalcin, a marker of bone growth, suppressed in patients with Cushing's syndrome, who often suffer from osteoporosis, also improved its statistical significance.

45% of the patients with hypertension experienced a 5-millimeter or greater reduction in systolic or diastolic blood pressure. That the improvements in glucose tolerance in serum osteocalcin were statistically significant in just 17 patients is proof of their consistency.

There was not only a large drug effect size, there was also a small standard deviation. Again, despite relacorilant clear evidence of clinical activity, there were no serious adverse events and no drug-related discontinuations.

As expected, there was also no evidence of PR affinity in the cohort's female patients, who ranged in age from 31 to 64. The reason for this is simple. Relacorilant does not bind to PR. A fact we have verified pre-clinically with our results published last year in a leading peer-reviewed publication, the Journal of Medicinal Chemistry. These results will be displayed in detail at the American Association of Clinical Endocrinologists, AACE's Annual Meeting in Boston next week.

As we disclosed in our press release, this trial is now fully enrolled. In the meantime, we have already learned enough to begin preparing our Phase III trial, which we expect to open later this year.

I will now turn to our oncology program. Cortisol modulators may help treat solid tumors through several mechanisms. In cancers, where the tumors express the glucocorticoid receptor or GR, such as pancreatic, triple-negative breast and ovarian cancer. Cortisol stimulates genes that prevent apoptosis. The program 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.

Cortisol modulation may also increase the effectiveness of therapies that stimulate the body's immune system to fight cancer. A healthy body produces cancer cells regularly, but the immune system identifies and destroys them.

Cortisol, even at normal levels, suppresses the immune system. The physiological and psychological stress of cancer and its treatment raise cortisol activity, creating even greater immunosuppression.

Cortisol modulators counter this effect allowing the immune system to attack more potently.

Our open label Phase I/II trial of relacorilant plus nab-paclitaxel, Celgene's drug Abraxane to treat patients with solid tumors continue to seek this combination's maximum tolerated dose.

The human results produced so far replicate the combination's potent preclinical effects. The trial's lead investigator, Dr. Pamela Munster of The University of California at San Francisco, will present the current results at the ASCO Annual Meeting in June.

As I mentioned on the last conference call, based on these initial findings, we have opened an expansion cohort in patients with metastatic pancreatic cancer, a dire disease, for which there are no good treatment options and expect to open additional expansions cohorts in patients with other tumor types, including ovarian and triple-negative breast cancer later this year. We expect to have results from a cohort of patients with metastatic pancreatic cancer by year-end.

As we develop relacorilant, our collaborators at the University of Chicago are following their groundbreaking foundational research in cortisol modulation, with their own clinical trials involving Korlym. With financial support from Celgene, they continue to enroll patients in their 64-patient double-blind placebo-controlled multicenter Phase II trial of Korlym plus Abraxane to treat patients with triple-negative breast cancer.

We are providing Korlym, and possess the intellectual property covering the use of this combination of medications. These investigators have also begun enrolling 74-patient open label Phase II trial of Korlym in combination with Merck's immunotherapy agent, KEYTRUDA, to treat patients with triple-negative breast and HER2-negative breast cancer.

It is well known that androgens stimulate growth in tumors of the prostate. That is why androgen-deprivation, known as chemical castration, is a common treatment.

And it has been shown more recently that patients treated with the androgen-receptor blocker, enzalutamide, Pfizer's drug, XTANDI, quickly developed colonies of cells where cortisol is the tumor's growth factor.

Combining a cortisol modulator with an androgen modulator such as enzalutamide from the outset of treatment may block this cancer escape route.

The development of cortisol modulation to treat patients with castration-resistant prostate cancer is now advancing on 2 tracks.

Our open label Phase I/II trial of our proprietary selective cortisol modulator CORT125281, combined with XTANDI is dosing patients at sites in the United States and the United Kingdom.

At the same time, University of Chicago investigators continue to enroll patients in their 84-patient controlled multicenter Phase II trial of Korlym plus XTANDI. The Department of Defense and the Prostate Cancer Foundation are funding this trial. Pfizer 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 I trial of our proprietary selective cortisol modulator, CORT118335. This compound has particularly potent effects in the liver.

We feel it has the potential to treat 2 serious disorders. Antipsychotic-induced weight gain and nonalcoholic steatohepatitis, which is commonly referred to as NASH.

Antipsychotic medications such as Eli Lilly's drug, ZYPREXA, and Johnson & Johnson's drug, Risperdal, are effective treatments for psychotic disorders.

In the United States, millions of people rely on them. Unfortunately, these medications also cause serious metabolic side effects, including weight gain, hyperglycemia and hyperlipidemia.

There are no good treatment options for patients suffering from these ill effects, caused by the antipsychotic medication that they absolutely need to take.

Controlled study showed that Korlym was an effective treatment for the metabolic side effects caused by these medications. Some years ago, we conducted a placebo-controlled clinical trial in which healthy human subjects were administered ZYPREXA plus either placebo or Korlym. We conducted a similar trial using Risperdal.

In both studies, Korlym prevented the adverse metabolic effects that these medications cause. The study results are published in the journals Advances in Therapy in October 2009 and in Obesity -- in Journal Obesity in December 2010.

Many of you are already familiar with NASH, a form of liver inflammation that is often a precursor to cirrhosis. NASH affects millions of people in the United States and there are no good treatment options. Our interest in cortisol modulation as a treatment for NASH is also based on human data.

The observation that Korlym reverses fatty liver disease in patients with Cushing's syndrome. But despite its demonstrated promise, Korlym's abortifacient properties which necessitate tightly controlled distribution, disqualify it as a treatment for these widespread conditions.

A selective cortisol modulator is required. In animal models, CORT118335, potently prevents and reverses the effects of Zyprexa.

It also prevents and reverses, both fatty liver disease and liver fibrosis, a symptom of NASH.

These results are striking on their own. They are especially compelling in light of our clinical findings with Korlym. If CORT118335's Phase I trial is successful, we plan to advance it to Phase II for these indications by year-end.

To recap, Corcept had another excellent quarter, driven by the continued increase in the number of patients receiving Korlym.

Revenue increased by 109% over the same period in 2017. We expect 2018 revenue of between $275 million and $300 million, with significant growth in 2019 and beyond.

Excluding significant cash, noncash items, our non-GAAP net income increased by 233% over the first quarter last year. Our cash and investments grew by $36.4 million. We have no debt. Our Phase II trial of relacorilant is fully enrolled. A poster detailing the results from its low-dose cohort will be displayed at the AACE meeting in Boston next week and results from the high-dose group will be released as soon as they're available. We are planning to start Korlym's Phase III trial later this year.

A trial of relacorilant in combination with Abraxane continues to generate promising early data, which will be detailed at the ASCO meeting this June.

We expect to have data from the trial's expansion cohort in patients with metastatic pancreatic cancer later this year.

Our Phase I/II trial of CORT125281 is combination with XTANDI, is enrolling patients with castration-resistant prostate cancer.

The Phase I trial of CORT118335 continues to progress. We plan to initiate Phase II trials in patients with antipsychotic-induced weight gain and NASH, serious common disorders by year-end.

I will stop now to answer questions.

(Operator Instructions) And we'll go first to Adam Walsh with Stifel.

My first question is can you just remind us of your thinking around the Phase III trial design for relacorilant, will it be open label or randomized placebo controlled? And how long would you think the Phase III might take to complete?

Yes. And just -- I have other people in the room, who are near and dear to me, I'd like to let Bob Fishman, who is our Chief Medical Officer, answer that question.

Yes. Hi there, thank you for your question. We are -- we have planned for 100-patient open label trial similar to what we conducted with Korlym.

We're currently in discussions about the path to the NDA. We'll know more in the coming months, but that's our expectation. And I would assume on the order of a couple of years to enroll.

And I'm just curious, with respect to the ANDA filing, any intelligence on where Teva might have gotten the Korlym to perform the bioequivalent studies? And I guess, where do you think that matters at the end of the day?

Adam, this is Charlie Robb, I'll answer that. So no additional intelligence now, I mean, just to provide a bit of background for folks.

Teva has submitted to the FDA an application to sell a generic form of Korlym, and we brought suit against Teva, under the Hatch-Waxman Act rules in March.

So our lawsuit alleging infringement of our Orange Book patents. So the lawsuit stayed FDA approval while the district court litigation progresses for 30 months or the length of litigation, whichever occurs first. So that is sort of the legal background. But the question is where did Teva get the tablets that they used to demonstrate or claim to have demonstrated bioequivalence with Korlym? The answer is we still don't know. They certainly didn't get them from us or didn't ask us for them.

So we will find out over the course of the litigation, we don't know now. I think the consequences of that -- of what we found out are sort of twofold. On the one hand, if what we find casts doubt on the validity of Teva's bioequivalent study that would be an issue we'd raise with the FDA in terms of the FDA's reliance on that data.

If that isn't the case, but Teva obtained the tablets improperly, we might have a separate claim against Teva or others that we would pursue. But -- so we don't know now what the answers are, but we are going to find out. It's something that really matters to us.

Thanks so much for the color and then a question with respect to the Phase III trial. Just curious, is -- I know you're planning for the trial now, but is the high dose cohort data a gating factor to beginning the Phase III? Or could that proceed ahead of those data?

I don't -- I can't say with certainty what the answer to that question is. And I can only give you sort of a little bit more information, Adam, which is, I just want to really remind the audience that this is an open-label study, and we have to really be very careful about what we say.

Understood, and then my final question, and thanks for taking so many, is just regarding the competitive dynamics in terms of the Cushing space. There are couple of competitors that do have some data reads that will be coming out this year. Maybe, Joe, you could just highlight what you think the strengths of Korlym are relative -- I mean, not, obviously, directly to the competitors, but just relative to kind of what's out there? Or how you're thinking about the competitive dynamics?

Well, I think the strengths really are kind of in -- I'll really describe them in two different ways. Probably the most obvious strength really dates the data that we produced in the SEISMIC study and then it replicated in commercial practice, which is that -- basically every patient who is on the medication at the right dose gets better. In the pivotal trial which got the drug approved, 87% of the patients were registered significantly improved in clinical global improvement, so I think that's really a very -- that's a very strong drug in any disorder, much less this disorder.

I think the other thing to point out, is at this time and certainly for years to come, we're the only drug, which has the mechanism of action of being a selective -- I'm sorry, of being a competitive antagonist at the glucocorticoid receptor or the ability to modulate cortisol by blocking its effects at the endpoint in a way which can be moderated to individual patients.

I think one of the really critical things about that is, a very important characteristic of cortisol, is that it has a diurnal rhythm. So drugs, which would simply lower the amount of cortisol in the system, are very non-physiologic in their effect.

Cortisol is high in the morning, it drops through the day, it rises through the night, and that sine curve is extremely important. So merely lowering drugs, for instance, 24-hour urinary-free cortisol to something which averages the normal limit is very unphysiologic.

Korlym does not do that, and I think that that's an important thing to consider for physicians as they use whatever drugs come along.

And we'll go next to the Tazeen Ahmad with Bank of America.

So Joe, maybe, you can give us a preview of what kind of data you would be considering positive data for pancreatic, the ones that you plan on releasing by year-end? And what you -- where you think in the treatment regimen this could be -- there's very limited opportunities now for patients to be treated in pancreatic, so how are you thinking about the market opportunity there?

Yes. No. You are welcome, Tazeen. First, I really do have to point out to everybody that this is really the very beginning of a development program. We've seen the first group of patients be treated. They of course were treated in an open label fashion, as you see in Phase I/II study. And we've been really struck, and again, I want to hold much of this until the poster actually is presented at ASCO. We've really seen some striking individual results and that actually is what caused us, and really caused our investigators to be interested in expanding the cohort to study more of those patients.

Again, unfortunately, for many patients with pancreatic cancer, survival is measured in terms of weeks, not even months and certainly not years. And so improvement in that disease is really of a -- of great clinical benefit, if we can provide it.

So I think that the real -- the best way to really answer your question is in the form that we've given the medicine so far, we really have seen these striking individual results, and they were in patients who previously had received the background medication, which was taxane, but for whom the medicine had failed them.

So it's, again, an uncontrolled result, very important to understand, as a clinician scientist, my own vote is that until you had a controlled result, you don't know exactly what you have. But clearly, we have seen activity, which has exceeded what we were expecting.

And how many patients in total do you think would be enrolling in the study?

The expansion cohort is 20 patients.

Okay. And then maybe one question on your expectations for the full Phase II data for the follow-on to Korlym? What should we be looking for beyond what you presented last -- for the interim read on last quarter's call?

Yes, I mean, I think, basically it was looking for improvements in the symptoms of Cushing’s syndrome. And prominent among them are glucose tolerance, blood pressure, but there are other things, which involve distribution of weight, which with Cushing’s syndrome is particularly around the middle, psychiatric effects like sleep, inattention and so forth. And again, I think for those who know me for a long time, I am kind of recovering academic. So we measure basically everything that we can. I think we have over 20 different endpoints, but I think the primary things that you'll be looking at -- that first get noted are things like the effect on glucose tolerance and on blood pressure.

We'll go next to Corey Davis with Seaport.

First on the Korlym in the quarter, you mentioned, kind of the normal payer churn that everybody experiences in Q1, but you ensure the patient's continue to get product. Is there a way, if not precisely to quantify it for us at least partially in terms of -- is all of that or most of it resolved now, such that you will see some sort of unusually high snapback in Q2 and subsequent quarters? Or won't we really notice it?

No, the answer to your first question is, yes, the time is now come and gone. And I think the most important thing to understand is that this is a regular phenomenon for us. And so in sort of thinking about the year before the year had begun, this is really part of our thinking as well.

So -- because it's something that we face basically in all the years that we've launched in other particularly Orphan Drugs phase as well.

So yes, we don't provide quarter-by-quarter guidance. But yes, what we expected to see was not so different than what we actually saw.

Okay. Another question that, that's come up a lot, and I'm sure you -- it's been asked and answered before, but how concentrated is Korlym prescribing right now? And every unit of incremental growth, does it come more from new prescribers or existing prescribers adding new patients?

I'm going to give you a very brief statement, and then I want to introduce you to the fourth person who is in our room, is Sean Maduck, who runs all of our commercial franchise.

The answer is it comes from both places, both existing physicians, who are prescribing to more patients, as they've seen the medicine work. And it also be -- comes from new doctors prescribing to patients, who were not previously prescribed.

And it's actually a little bit more of the latter than it is the former, but I'll keep -- I'll introduce you to Sean, and he can provide a little more color.

Yes. Thanks for the question. I think that was most of the answer, I think. The only other piece to add to that is that for the last couple of quarters, we really, on an increasing basis added more new prescribers, and as Joe stated as, doctors -- the hardest thing for us as a company commercially is to get physicians to write their first prescription, and when they do and they see the benefit of Korlym, they look for more patients.

So from a dispersion standpoint from the business, we have many unique prescribers, new prescribers that come into the business, we have many multi-prescribers and we're seeing prescriptions from all over the country.

And next question would just be how you differentiate relacorilant other than what you've talked about it? It seems like Korlym is a pretty good drug. So how does it get better, if it can, on efficacy?

Well, I think, that in terms of efficacy, it would be surprising to get something which was better because Korlym works on pretty much everybody, and that's terrific.

But it really does have this Achilles' heel, that's very, very consequential of the progesterone receptor side effects. In addition to the medical side effects causing endometrial hypertrophy and irregular vaginal bleeding, it has both political and actual logistical problem that this is the same ingredient which is in the abortion pill and has to have very restricted distribution as a consequence.

I can tell you this, and it's always sort of hard to prove it a negative, although I've really had some anecdotal evidence and this is the case. There are places in the country where Korlym is not prescribed, and I can tell you with certainty that there are doctors who prescribe to men who like the medicine very much but don't prescribe to women.

So this is not a small thing. And taking away the progesterone receptor side effect is a major clinical advance for people who want to use this medication. And again, I'll just repeat, it's in 2 different ways: One, it's a serious medical advance; and two, it allows potentially for far less restricted distribution than is currently necessary.

And last question, Charlie, thanks for breaking out all of the non-GAAP or noncash expenses, so we can use adjusted EPS instead of GAAP. I know you don't give guidance for your expense items, but can you help us just with R&D and SG&A, should they continually climb throughout the subsequent quarters this year or stay flat off a Q1's run rate?

Well, I think the way to think about this is just as our clinical programs advance, our clinical spending advances with them. And so they're going to become -- yes, they -- as they advance across year, there will be more patients taking medicine, more sites opened, more product being purchased. And I think you just need to figure that into your forecast.

As for the sort of the administration portion of our spending, I think that we really are and it has been true for quite some time, that we generate marginal revenue with very little additional administrative expense. And that's going to continue to be true.

And we'll go next to David Buck with the B. Riley FBR.

This is Mike Kratky filling in for Dave Buck. So just in terms of the enrolling plan for relacorilant, what's the company doing to ensure a timely enrollment for the Phase III studies?

Well, the Phase III study for -- we have no Phase III studies for relacorilant so far. But is the question, how do we expect to enroll? How do we expect to deal with the enrollment as we get to Phase III?

Yes, exactly.

Bob?

Yes, this is Bob Fishman, I can take that. One of the really important developments in Phase II is that as we started to see evidence of individual benefit in individual patients, the -- really the entire complexion of enrollment changed. And now we have a well-organized and very scholarly and excellent group of investigators that do a nice job planting the seed for what we'll be a global study.

We are applying all lessons learned logistically from Phase II, we have a good sense of who are the great triallers, who are the people who will enroll and contribute. In essence, we're really getting to know the landscape and that alone is going to be one of the powerful, really key success factors for enrolling Phase III.

And we'll go next to Matt Kaplan with Ladenburg Thalmann.

Just wanted to dig in a little bit more to the relacorilant Phase II -- ongoing Phase II study? If you look at, I guess, now kind of the concept about adding the 400-milligram dose, stepping it up higher above 350? And talk a little bit about the -- what you're seeing as the potency, I guess, of relacorilant versus Korlym in the studies that were done with Korlym so far?

Yes. As I said, we really have the opportunity, and that's the great thing about a Phase II study is to really try to test all the dose that we could. And as I said earlier, the lack of toxicity we saw at lower doses really enabled us to add a higher dose than we had even anticipated at the beginning of the study.

And that's the reason it's there. And our first and most important thing with the Phase II study is really to learn as much as we could and that's what we're doing.

And it's our expectation that dosed appropriately, which means for each individual patient, the relacorilant will be just as potent as Korlym is, but without the important detriment of progesterone activity.

That's helpful. And then could you talk about your current penetration of the overall Cushing’s market? Where you are with Korlym and the potential...

Yes. Without really sort of pinning it down to very specific numbers as you know we don't give on a call. We feel like our penetration is still a fraction of what it might be.

And we feel like the -- and I think -- I'll elaborate in 2 ways: One, I think that even with Korlym, there are many doctors who we think have patients who would benefit from the medication, who have not yet tried it. And I just want to echo something that Sean said. Sort of the proof of that to us is the growth in new prescribers every quarter. And we think of that as really something that we have not seen the end of. So that's the first part.

Second thing is, I think, the overall market size is probably grown, not that the patients weren't there, but they weren't being screened for previously. So many times in the past because it was really what was in the literature, we said, we thought there was about 10,000 patients with Cushing's syndrome.

And clearly, there are millions of patients with Cushing's syndrome, but could there be somewhat more than 10,000. I think the answer to that is yes, because I think there are patients who are now being screened for hypercortisolism, who are just kind of suffering along with all the various symptoms, not in medicines that weren't getting at the core of it.

So I think that in some sense the penetration rate is not what it would be even with a static number, but it's actually lower than you might think it is, because I think there are patients who will be added to the potential patients to be treated.

And then turning to -- going back to the Phase III design for the relacorilant, thanks for the detail, how long do you anticipate treating patients for? Will it be at 24-week study? Will it be at 4-week study? What are your thoughts?

No. Our anticipation will be that it will be a 6-month study, same as the SEISMIC study for Korlym.

And I think that's actually another thing just to think about. I don't want to put too much emphasis, I want to just make sure that people understand the difference. The results we're seeing with the relacorilant are in essentially what you've seen so far, 3-month study. And there are certainly good effects with Korlym in 3 months, but the effects continue not just over months 4, 5 and 6, but even beyond that when we saw them in the -- in their extension study.

And we'll take our next...

All right. Look, sorry Corey.

Corey Davis with Seaport.

Okay, sorry, Corey, didn't mean to interrupt you.

That's okay. I wanted to go back to something that you mentioned about the diurnal rhythm of cortisol, because I'm not sure, I quite caught it. Were you saying that any drug that inhibits it has to follow that same pattern or there might be clinical consequences?

No, what I'm saying is that it's -- this is a very important biological characteristic of cortisol, which is that it is not released in a static way. It's highest when we wake up in the morning, and then it's drop through the day, and then it rises through the night, and it's got this very nice sine curve and that's very, very important. I think for most of people who know me know I'm a psychiatrist by training, and I can tell you that the nadir in -- that you need with cortisol is very important for psychiatric effects. Not the least of which is sleep. In order to get a good night of sleep, your cortisol access has to really turn off. On the other hand, you have to really be ready to kind of greet the day with a higher cortisol level.

So that's a very, very -- it has evolved over a long-period time, a very, very important biological characteristic of cortisol.

So a medicine that simply gave you an average in the appropriate range, but obliterated the diurnal rhythm of cortisol, would leave you in a condition where you're not feeling well. That would not be a good thing to do. And that's in fact something that Korlym does not do.

Korlym, if anything, exacerbates the diurnal rhythm, and it actually makes sure that you have a high peak and a nadir. And I think that one of the interesting things clinically is that people will notice with Korlym that even in the first week they start to sleep better. And that's actually very important characteristic of this type of medication. A good corticoid receptor competitive antagonist that Korlym is, and that we're developing.

Is that unrelated to what you said about measuring year-end levels of cortisol? I think you were getting at that that's not predictive -- perfectly predictive of a clinical effect, is that correct?

What I'm saying is that getting a person to a quote, "normal level of urinary-free cortisol," dodges the question of whether or not they kept a normal diurnal rhythm.

Getting to a normal cortisol level is simply lowering the water in the pool. It is not actually mimicking the normal biological activity.

Okay, well, thank you, everyone, for listening in and for listening to a little bit of science, but we really look forward to talking to you next quarter. Thanks.

That does conclude today's conference. We thank you for your participation.