Corcept Therapeutics Inc (CORT) 2022 Q3 法說會逐字稿

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. To ask a question during that session, you'll need to press star 11 on your telephone and you'll then hear an automated message advising that your hand is raised. 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 might 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 in 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 of 2022 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 and investments at September 30 was $401.2 million, an increase of $19 million in the quarter. We expect our revenue growth to continue and have 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 Teva and Federal District work to prevent it from marketing and generic version of KORLYM in violation of our patents. That lawsuit is still underway, although there has been no activity for more than a year. In the second quarter of 2021, we filed for some rejudgment based on Teva's infringement of our 2014 platform. Teva as expected, responded by filing its own summary judgment function. Summary judgment is a procedure whereby court's design 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 general motion at the patent office and lost, which means it cannot challenge the 214 patent validity in District Court. As a result, it's only defense to our summary judgment motion is that its proposed product would not infringe, a position we believe has no support. The court decided pending summary judgement motions in our favor. Teva would be barred from marketing generic KORLYM until 2037 when the 2 and 4 patent expires. If the court rules in Teva's favor, we will proceed to trial, most likely sometime next year. There's no timetable for the summary judgement 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 conclude 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. I'll now turn the call over to Dr. Joseph Belanoff, our Chief Executive Officer. Joe?

Thank you, Charlie. Our Cushing's syndrome business built on a solid foundation, a life setting medication promoted by a commercial team that puts the interest of patients first. Diagnosing and treating patients with a complex disease such as Cushing's syndrome, requires frequent in-person contact. Our revenue in the third quarter was affected by fewer-than-expected in-person interactions as many physician practices have not returned to prepandemic patterns of activity. To reflect this near-term challenge, we are tightening our 2022 revenue guidance to $400 million to $410 million. We remain extremely optimistic about the present and the future of our Cushing's syndrome business. KORLYM is an excellent treatment for patients with pitching syndrome and leading endocrinologists increasingly believe they are considerably more patients with Cushing's syndrome that 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 modulation's broad therapeutic potential. We are very excited about our most recently initiated studies, ROSELLA, our confirmatory Phase III trial of platinum-resistant ovarian cancer and DAZALS, our Phase II trial in ALS. We are also looking forward to important readouts from our 2 Phase II trials in antipsychotic-induced weight gain by the end of this year. Our portfolio of more than 1,000 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 of KORLYM or approved products with serious off-target effects. Interestingly, while all of our compounds modulate cortisol's activity without modulating progesterones activity, they are not identical. Some cross the blood brain barrier, others do not. Some perform best in models of solid tumors, others are more potent models with metabolic disease. Some appear to be tissue specific, others have more global effects. These diverse qualities allow us to study a wide variety of disorders. Currently, we are conducting programs in ovarian, adrenal and prostate cancer, ALS, antipsychotic-induced weight gain, NASH and, of course, Cushing's syndrome. We are also investigating cortisol modulation role in other diseases and have 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 3 anticancer mechanisms, first delighted by investigators at the University of Chicago and later confirmed by other prominent researchers. One mechanism is increasing apoptosis, the program cell that the chemotherapy is meant to induce in solid tumors. Cortisol works against the beneficial effect of chemotherapy by suppressing apoptosis. Our successful controlled Phase II trial in women with platinum-resistant ovarian cancer, the addition of our selective cortisol modulator, relacorilant, enhance the effect of chemotherapy, likely by blending cortisol anti-apoptotic effect. Relacorilant improved provide a meaningful benefit to many of the women in our study. While these women's disease have progressed on 2 or more previous lines of treatment, including previous taxanes, relacorilant appear to resensitize some of them to chemotherapy's beneficial effects. Those who received relacorilant intermittently, the day before, the day of and the day after they received nappaclitaxel, exhibited a statistically significant improvement in progression-free survival and duration of response compared to the group who received nab-paclitaxel monotherapy. While our 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 dose comparator group with a p-value that approached statistical significance. I remind you that to date, no approved therapies have demonstrated an overall survival benefit in patients with platinum-resistant ovarian cancer. In addition, the women who received relacorilant with nab-paclitaxel experienced no additional side effect burden compared to those who received nab-paclitaxel alone. The results from this study were featured multiple podium presentations at the 2021 and 2022 European Society for Medical Oncology, ESMO, meetings and in the 2022 American Society of Clinical Oncology, ASCO Annual Meeting. AURELIA, our pivotal Phase III trial in platinum-resistant ovarian cancer, is active and enrolling patients. AURELIA's design closely tracks our Phase II study with planned enrollment of 360 women randomized 1:1 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 this 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 III is simply to replicate our positive Phase II results. Leading gynecological oncologists have told us that, in their view, relacorilant's potential benefit, improved survival without increased side effect burden would constitute an important medical advance and the relacorilant plus nab-paclitaxel has the potential to become a new standard of care in women with platinum-resisted 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 and zalutamide eventually experience resurgent disease. The product of androgen stimulation mean their tumor switch to cortisol activity to stimulate growth. Our hypothesis is that adding a cortisol modulator to androgen deprivation therapy and close this tumor escape route. Next year in collaboration with the University of Chicago, we will begin a randomized placebo-controlled Phase II trial of relacorilant plus enzalutamide in patients with prostate cancer early in their course of treatment before they have had their prostate. The third 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 therapy 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 Ib 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, a usually quickly lethal combination. Pembrolizumab alone is rarely effective in treating this form of adrenal cancer. Our trial is evaluating whether relacorilant can treat these patients' Cushing's syndrome by reducing excess cortisol activity and by reversing cortisol-induced immune suppression, allowing pembrolizumab to achieve its full cancer-killing effect. The primary endpoint of this 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 disease is a devastating illness with an urgent need for better treatment. We are excited that we have initiated DAZZLE, our 198-patient randomized, double-blind placebo-controlled Phase II trial of dazucorilant in patients with ALS. Dazucorilont is a selective cortisol modulator that crosses the blood brain barrier and has shown great promise in animal models of ALS, improving motor performance and reducing neuroinflammation and muscular atrophy. We are 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 2 double-blind, placebo-controlled Phase II trials of miricorilant, GRATITUE 1 and GRATITUE 2, in patients with antipsychotic-induced weight gain, serious and widespread disorder. In the United States, 6 million people take antipsychotic medications such as olanzapine and risperidone to treat illnesses including schizophrenia, bipolar disorder and depression. While these drugs are 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 GRATIITUDE trials seek to build on the positive data from our study of miricorilant in healthy subjects. In 2020, we completed a trial with a 96 healthy subjects received olanzapine and even 600 milligrams of miricorilant, 900 milligrams of miricorilant or placebo for 14 days. Subjects who received miricorilant gained significantly less weight than those who received placebo. They also exhibited a smaller increase in triglycerides and in the liver enzymes, ALT and AST, which typically exhibit sharp transient increases at the start of olanzapine therapy. 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 2 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 is also our candidate treatment for patients with NASH, a serious liver disease that affects millions of patients in the United States. In our prior NASH study, patients who receive miricorilant exhibited large rapid reductions in liver fat, but also substantial, albeit transient, elevations in the liver enzymes ALT and AST. The improvement in liver fat in these patients was greater and occurred much more rapidly than we had expected and has rarely seen over any period of treatment. Patients exhibited reductions in liver fat, ranging from 38.5% to 73.8% after receiving miricorilant from just 1 month. To put this in perspective, recall that the trial's primary endpoint was a 30% reduction of liver fat after 12 weeks. It may be that the rapidity of miricorilant fat-reducing effect caused the patient's ALT and AST to rise. One way the liver sheds fat is by metabolizing it's fatty acids, which in excessive amounts, irritate the liver. Lipids in the blood of these patients did not increase, providing support for the idea that miricorilant caused their excess fat to be metabolized immediately within the liver. The goal of our Phase Ib dose-finding study in patients with NASH is to identify a dosing regimen that captures the unprecedented lipidity 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, our planned successor to KORLYM, for the treatment of hypercortisolism in 2 Phase III trials, GRACE and GRADIENT. Relacorilant is a selective cortisol modulator. KORLYM achieves its effect by competing with cortisol at the glucocorticoid receptor. Unlike KORLYM, it does not binded 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, relacorilant also does not appear to cause hypokalemia, low potassium, a serious side effect experienced by 44% of patients in KORLYM's pivotal trial. KORLYM induced hypokalemia, a leading cause of KORLYM discontinuation. Relacorilant's Phase II efficacy and safety data were strong. Patients experienced meaningful improvements in hypertension and glucose control as well as in a variety of other signs and symptoms of Cushing syndrome. There were no relacorilant-induced instances of endometrial thickening or vaginal bleeding and no drug-induced hypokalemia. The trial results were published in Frontiers and Endocrinology last year. GRACE's 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 with relacorilant or placebo for 12 weeks. We and our investigators are eager to take race to the finish line. We expect GRACE to serve as the basis for our NDA submission in Cushing's syndrome, which we expect to submit in the second half of 2023. Our second Phase III trial, GRADIENT, is seeing that relacorilant effects in patients whose Cushing's syndrome is caused by an atrial atenoma or a trenalhyperplasia. 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 from Radiant, we do expect that its findings will help improve the care of those increasingly recognized patients. GRADIANT, a randomized placebo-controlled study, has a planned enrollment of 130 patients. To sum up, our commercial business continues to generate substantial profits even after funding all of our development programs. We are extremely optimistic about the present feature of our Cushing's syndrome business and are making significant investments to improve the screening and treatment of patients with Cushing's 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 modulation can provide substantial benefits. Ovarian cancer is a prime example, but there will be others. Our open multinational trial in ALS has real promise, and we will have important data from our antipsychotic usage studies later this year in from our NASH program in the first half of next year. A whole academic field in the use of cortisol modulation in alcohol and other addictions is opened. In addition to relacorilant, miricorilant and dazucorilant, we have many other cortisol modulators in our portfolio with potentially very different clinical attributes. Corcept is steadily advancing across multiple fronts. I thank our dedicated, creative employees and our loyal investors for making this possible. I'll stop here for questions. Thank you.

Thank you. At this time, we'll conduct a question-and-answer session. As a reminder, to ask a question, you'll need to press star 1 1 on your telephone and then wait for your name to be announced. Please stand by while we compile our Q&A roster Okay. Our first call comes from the line of Ed Nash with Jefferies. Your line is open.

It's actually Edward from Canaccord. Thanks for taking my call and really appreciate the overall pipeline overview. I just wanted to maybe touch on a point, Joe, that you brought up at the beginning of your comment, just talk about the limited interactions that are still occurring in the doctor's office there. I just wanted to better understand that because we're clearly not in the peak of COVID anymore now and things have relatively gotten back to normal. It seems that a lot of the doctors' offices that 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 kind of get things back to where they need to be. Are patients really having a hard time getting appointments with the endocrinologist to either for follow up? Or is it a lab issue? Or I'm just trying to understand, there's a lot of moving parts, but kind of what is kind of the overall stock gap that's really causing the problem here on growth of KORLYM?

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

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

Yes. What I'd really just like to answer the question, just to really give you the kind of pull around it is that I agree with you. When I'm out now, it seems as if that many things are back to pre-pandemic normal, although not entirely, and I think as a physician myself, I can tell you that there are many doctors whose practices have changed in character 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 as a person was educated or doctors educated over a period of time before they began screening. I think the reality is that while many practices in some ways, have returned to normal, I think that other practices may not ever return to what was like prepandemic. It's really on us to figure out ways to make sure that education process continues in this new way. 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.

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

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

Yes. Thank you for the question. I want to remind everybody about the significant growth potential that exists in this market. There is now a substantial amount of independent research that suggests that hyperportalosm is potentially far more prevalent than previously thought. It's disease, could there be 30,000 to 40,000 patients? Yes, and we're focused on unlocking that full potential. So despite some of these current challenges that we just went through, we're confident in our path to sustained growth. I thought I'd maybe take a minute to tell you a little bit about what a couple of those key strategies are. We talked about how access has been a power. So one of our key focus areas is to increase physician interactions. We're going to do that by increasing the size of our customer-facing team and the support groups around that and working to improve the productivity of that team. The second big focus area for us is really around increasing screening and referral rates by raising awareness and specialties that we believe have origination populations. So I'm going to give you a couple of examples. For example, number one, divatologists see a large number of treatment-resistant diabetics, yet they do not retain the screen for Cushing's syndrome, even though literature states that anywhere from 8% to 10% of this population may have underlying hyperphosals. As another example, radiologists frequently discovered dreal modules 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. 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, and print and digital means. Not all these patients will be pooling candidates, but some will. I think to sum it up, all of our strategies and tactics are focused on increasing physician interactions, raising hyperphosal awareness, increasing patient screening and most importantly, improving care for hyperphosal patients.

Dennis, your second question has to do with our antipsychotic-induced Wigan program, and I'm going to turn it over to a second to Bill Guyer, who is our Chief Development Officer, and responsible for all of the drugs in development, including antipsychotic induced gain. Just one small point, I think it's an important one. You mentioned [29:46] just a factual point is we [29:51] is for the prevention of antipsychotic. In fact, olanzapine-induced weight gain, not for weight loss. I think that's an important distinction. So I'll turn you over now to Bill, and he can give you an answer to your variety of questions.

Yes. Thank you very much. So regarding our weight gain focus, it's from the GRATITUDE 1 and GRATITUDE 2 studies and yes, we will have data by the end of this year. We expect to evaluate both of those studies individually, but also collectively pooling the data to 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. 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. So that's going to be our focus, 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 miricorlin can bring to these patients.

I think, Dennis, you also asked the question about the larger issue, maybe weight loss in general. 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 or risperdal or 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?

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

Sorry, thanks for taking the question and good afternoon. A quick follow-up on miricorilant. It sounds like 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 studies we've done with miricorilant in antipsychotic-induced weight gain or reversing antipsychotic educate 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 and the growth that's 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?

I'll return you to Sean 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? To your question about dose, our dose rarely changes, it's been the same average dose for midyear.

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 impact from relacorilant or from the more mature products? 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 responded in the past on this one. We haven't seen an impact. We're pleased, honestly, that more companies are out there talking about our proposals and raising awareness, which I just mentioned is lacking in certain areas and ultimately, it all switches.

Okay. And then on GRACE, has patient enrollment been hitting your targets? Bill?

Well, we don't typically talk about enrollment. What we talk about is our focus on NDA, and the team is focused on completing that NDA in the second half of next year. I'm very confident that the team is working hard to meet that target of submitting that NDA. We've taken, as I think I've said on previous calls, an all hands on deck approach and that continues where we're cross-functionally working with investigators as well as working internally not only to enroll the study, but also to start actively riding and completing the NDA today. We are actively working on the NDA, we're actively working with the FDA. We've completed investigator meetings in the U.S. and Europe this year, and we made many one-on-one visits to our key investigators. It's clear after meeting with those investigators and talking about the trial that they have an unwavering support and excitement around relacorilant and the GRACE study and are committed to completing this trial.

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

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

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

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. I have a few questions. Let me ask how prevalent is NASH or fatty liver among chronic schziophrenics? Is there any collected input to infer this in the current 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 it known or do we know the prevalence of NASH in patients who have chronic psychiatric illnesses and are treated with antipsychotic medications. That question, 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 are overweight, and they have, in many cases, have been overweight for a real period of time. Those certainly, those two characteristics are certainly correlated with the development of fatty liver disease and NASH. So I can't answer your question quantitatively, but qualitatively, it certainly is something which exists.

Yes. The third question is for ALS patients. What do you know about metabolic syndrome in ALS patients? When I look at the literature, it seems that the CNS in neuromuscular patients seem to experience cortisol is regulation. So I'd love to get your commentary on that.

It's 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 hypercortisol, they exhibit hypercortisol. You never really know what to do about that or if that was, in fact, leading to their disease. The key element for us was a very strong academic researcher who treated an animal model that involved, that was sort of a standard animal model for ALS and found in treating them with a cortisol modulator really led to pathological and clinical improvement. 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 closely 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 fibrotic composition structure because in the past, MRI detects only growth changes, but I want to make sure I haven't missed anything with very recent improvements in the MRIs.

Yes. For that question, I'm going to give you back to Bill, who really is a NASH 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. 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 Ib study, we're not looking at fibrosis at this time, but there are other noninvasive markers that we're going to be using and analyzing as those biomarkers to look at improvements in liver fibrosis will then take those learnings and apply them as we move forward to a Phase II study and use those same parameters and/or use liver biopsies as well. Yes, we will be gathering biomarkers to look at liver fibrosis to see if we're seeing improvements there as well.

Thank you. Looking forward to the next month.

Yes. Thank you, Alan, and thank you to everybody who's listened in. really looking forward to our next communication, and hope you have a good rest of the week. Thank you very much.

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