Corcept Therapeutics Inc

NASDAQ:CORT

Earnings Call Transcript 2018-Q4

[Operator]

Good day everyone and welcome to the Corcept Therapeutics Conference Call. Today's call is being recorded. [Operator Instructions]

At this time, I would like to turn the call over to Charlie Robb. Please go ahead sir.

[Charlie Robb, CFO]

Good afternoon, thanks everyone for joining us. Earlier today, we issued a press release announcing our fourth quarter and full year financial results and reviewing our clinical progress. A copy is available at corcept.com. Our full results will be available when we file our annual report on Form 10-K with the SEC. Today's call is being recorded. A replay will be available through March 11, at 888-203-1112 from the United States and 719-457-0820 internationally. Passcode is 6598298.

Statements during this call other than statements of historical fact are forward-looking statements based on our plans and expectations and are subject to risks and uncertainties that might cause actual results to differ materially from those such statements expressed or implied. These risks and uncertainties include, but are not limited to our ability to generate sufficient revenue to fund our commercial operations and development programs. The protections afforded by intellectual property. The availability of competing treatments including generic versions of Korlym; our ability to obtain acceptable prices or adequate insurance coverage and reimbursement for Korlym; and the scientific regulatory management and financial risks related to the development of our product candidates. These and other risks are set forth in our SEC filings, which are available at our Web site and the SECs Web site.

On this call, forward looking statements will include those concerning our 2019 revenue guidance and expected growth in 2019 and beyond. Our stock repurchase program, physician awareness of hypercortisolism and the selection of Korlym as the best of medical treatment for many patients. The timing, cost and outcome of our lawsuit against Teva Pharmaceuticals USA, and the recently instituted Inter Partes review. The clinical attributes of relacorilant; data from the dose finding portion of our Phase 1/2 study of relacorilant plus Abraxane; and the progress and results of our other research and development programs, including the work of independent economic investigators and our current in plan clinical trials of relacorilant COR125281 and COR118335. We disclaim any intention or duty to update forward-looking statements made on this call.

Now I'll review our financial results. Corcept's revenue in the fourth quarter was $66.8 million, a 25% increase from the fourth quarter of 2017. The increase was due to broad based organic growth, more physicians in every part of the country prescribing Korlym to more patients. We reiterate our 2019 revenue guidance of between $285 million and $315 million. Our GAAP net income in the fourth quarter was 22 million compared to 98.3 million in the fourth quarter of 2017.

As you may recall, our fourth quarter 2017 results included a $76.7 million one-time non-cash benefit from the recognition of deferred tax assets. Excluding this one-time non-cash benefit as well as non-cash expenses related to stock based compensation, use of deferred tax assets, interest on our retired royalty financing obligation and related tax affects, our non-GAAP net income in the fourth quarter was $30.4 million compared to $24.7 million in the fourth quarter of 2017. Our press release includes a reconciliation of GAAP to non-GAAP net income.

Cash and investments were $206.8 million at December 31st, compared to $104 million at the end of 2017. We repurchased 1.1 million shares of our common stock in the fourth quarter at a total cost of $14.8 million. In all of 2018, we repurchased 1.8 million shares at a cost of $23.7 million. Under the currently authorized terms of our stock repurchase program at December 31st, $76.3 million remained available to acquire shares. The timing and size of any future repurchases will be based on market conditions, our stock price and other factors.

I'll now provide a brief legal update. As many of you know, Teva Pharmaceuticals notified us in February of last year that it was seeking approval to market a generic version of Korlym. In March, we sued Teva for infringement of two of our patents. Teva moved to dismiss our complaint.

At the time, some speculated the Teva's motion was likely to be granted. That was not a realistic view. In October, Teva's motion was denied. In the 11 months since we filed suit, we have added four patents to the litigation. We asserted the last three of these against Teva a few weeks ago on a separate lawsuit, which as we expected the court consolidated with our original lawsuit.

The most recently issued that the patent we have asserted against Teva is the 214 patent which covers the co-administration of Korlym with medications that our strong CYP3A inhibitors including antiviral, antibiotic, antifungal and antidepressant medications. The warnings and precautions, dosing and administration drug interactions and clinical pharmacology sections of Korlym's label instruct doctors how to do this safely.

The link between the 214 patent and the Korlym label is important. A generic version of Korlym would receive for all practical purposes a copy of Korlym's label because that label instruct physicians to practice the 214 patent, the generic manufacturer would be inducing patent infringement with every tablet it sells. The 214 patent expires in 2037.

Last Thursday, the court issued its first scheduling order. It extends to the end of this year, at which time the parties will propose dates for a Markman hearing. The proceeding at which the judge will hear argument as to what any disputed terms in our patents mean. Timing of events in 2020 and beyond is not certain. In a briskly moving case, trial would likely take place about a year after the Markman hearing, which here would mean the first quarter of 2021 with a verdict following shortly afterward.

Any appeal would likely be resolved six months to one year after the verdict. Please remember the timeline I've just described is merely a reasonable estimate. It is agnostic as to whether a course of we win or lose, which is of course a matter that court will decide. That being said, we are for many reasons confident in our legal position.

Finally, some of you may know that Neptune Generics, a subsidiary of the litigation finance firm, Burford Capital, an entity that is not to our knowledge manufacture, sell or distribute any medications, has requested in Inter Partes review of our 348 patent, one of the four we have asserted against Teva, the concerned methods of dosing Korlym. Recently, the Patent Trial and Appeal Board or PTAB agreed to let Neptune's IPR go forward.

As is true with respect to Teva, we are confident in our legal position and we will defend the 348 patent rigorously. IPR challenges have a predictable schedule. The PTAB should reach its decision in one year, at which time the losing party may appeal to the Federal Circuit, which typically adds 6 to 12 months to the process. The earliest we expect final resolution of this IPR is the third quarter of 2020.

In closing, we believe our profits together with our cash on hand will be sufficient to fully fund our commercial business, complete development of relacorilant in Cushing’s Syndrome and solid tumors, CORT125281 in castration-resistant prostate cancer, and CORT118335 in antipsychotic induced weight gain and NASH advanced to the clinical and to the clinic additional proprietary selective cortisol modulators and fund our stock repurchase program.

I will now turn the call over to Dr Joseph Belanoff, our Chief Executive Officer, Joe?

[Dr. Joseph Belanoff, CEO]

Thank you, Charlie, and thank you everyone for joining us today. 2018 was a transformative year for Corcept. Our revenue increased by $92 million and our non-GAAP net income increased by $45 million. Our cash nearly doubled to $206.8 million, even after we purchased 1.8 million shares of common stock. Our commercial growth was built on a solid clinical foundation. The increasing number of physicians in all parts of the country who identified patients with Cushing's syndrome and are treating them with Korlym.

We expect the number of physicians prescribing Korlym to continue to grow. There are at least 10,000 patients with Cushing's syndrome in the United States. In fact, as I mentioned before, there could be several times that number -- times that number of patients, many who could benefit from Korlym have not yet received it. We took important steps in 2018 to protect and extend our Cushing's syndrome franchise.

Charlie mentioned the patent was allowed in December and which we recently included in our lawsuit against Teva the 214 patent. I want to remind everyone that this patent is legally significant because it is medically significant. Patients taking Korlym can sometimes benefit from drugs covered by the 214 patent, which included commonly prescribed antiviral, antifungal antibiotics anti-depressive to medications. The 214 patent and the corresponding instructions in Korlym's label tell physicians how to do this safely.

For patients whose health depends on receiving both Korlym and one of these drugs, this is a meaningful medical advance. I am proud that our research made it possible. Of course, this legal matter should not obscure the progress we made in 2018 advancing our plan successor for a Korlym, relacorilant. As many of you know, Cushing's syndrome is caused by a tumor that either produces cortisol or causes the body to produce cortisol. Cortisol is a center for life. There are baroreceptors for glucocorticoid receptors or GR in nearly every tissue type.

In a healthy person, cortisol follows a diurnal rhythm, falling during the day and into the evening and rising again this morning approaches. The tumors that cause Cushing's syndrome destroy this rhythm. The cortisol they create also over stimulates GR, causing the wide range of serious signs and symptoms that constitutive Cushing's syndrome. Korlym treated patients with Cushing's syndrome by competitively binding to GR and modulating or turning down the excess cortisol activity that is harming them.

Korlym's pivotal seismic study showed the cortisol modulation is very effective. 87% of patients in seismic has adjudicated by an outside panel of expert endocrinologist, demonstrated significant clinical benefit. Relacorilant shares Korlym's mechanism of action and in its Phase 2 trial generated comparable efficacy data, results that we are seeking to confirm in Phase 3. Today, we released the summary of the complete Phase 2 data. We plan to submit these results for presentation at the American Association Clinical Endocrinologist, AACE Meeting, this April, and we're also preparing a paper for publication in a peer-reviewed scientific journal.

I briefly describe our results. Relacorilant Phase 2 trial enrolled 35 patients at sites in United States and Europe. The protocol calls for each patient to receive a daily dose of relacorilant that increased from 50 milligrams increments every four weeks. The first 17 patients that "low-dose cohort" started a daily dose of the 100 milligrams per day then increase this tolerable to 150 milligrams and finally 200 milligrams per day. The next 18 patients that "high-dose cohort" started at 250 milligrams per day, increasing their doses tolerable to 300 milligrams then 350 milligrams and finally 400 milligrams per day.

The data we released today measure patient response using the endpoint of clinical benefit that we're applying in relacorilant's Phase 3 trial. For comparison, we also applied these endpoints to patients after 16 weeks of treatment in Korlym's seismic study at which point they were receiving the maximum Korlym does of 1200 mg per day. Patients in relacorilant Phase 2 trial high-dose cohort clearly benefited. 50% of patients with hyperglycemia achieved improved glucose control. 64% of patients with uncontrolled hypertension achieved a meaningful drop in blood pressure.

Patients in the high-dose cohort also demonstrated significant improvement among a wide range of other symptoms including hypercoagulopathy, liver function, insulin resistance, cognition and mood. The Phase 2 data demonstrated several of relacorilant's important safety benefits. Some of these were no surprise. As most of you know Korlym binds to the progesterone receptor, PR, for short giving rise to significant off target effects the most notorious of which is termination of pregnancy.

In addition, PR affinity causes many women who take Korlym to experience endometrial thickening and vaginal bleeding, adverse events that are manageable, but can be debilitating and cause some physicians and patients to avoid Korlym. As was our intent when we designed the compound, relacorilant does not bind to PR and so does not cause the adverse events arising from PR affinity. In relacorilant's entire course of development as expected, we have seen none while administering the drug to a significant number of women.

16 of the 18 patients in the Phase 2 trial high dose group were women and several of them had previously discontinued Korlym because of its anti-progesterone related side effects. Relacorilant's Phase 2 data also demonstrated an additional safety benefit. Relacorilant does not appear to cause another of Korlym significant off target effects, hypokalemia, which means low potassium. In many patients Korlym causes cortisol levels to rise sharply sometimes to level sufficient to activate the mineralocorticoid receptor, which causes the body to shed potassium.

Hypokalemia can cause muscle weakness and change in heart rhythm and can be quite dangerous, if not managed properly. Physicians prescribing Korlym must monitor their patients closely for hypokalemia, which occurs relatively frequently. 44% of the patient in seismic experienced. Today is a leading cause of patients discontinuing Korlym because relacorilant does not elevate cortisol levels to nearly extent Korlym does, it is not cause hypokalemia. Our goal now is to confirm relacorilant's benefits in its Phase 3 trial, which goes by the acronym GRACE.

We plan to enroll 130 patients at 60 sites in the United States, Canada, Europe and Israel. GRACE has a two phase design. In the initial open label portion, all patients will receive relacorilant for 22 weeks. Daily doses will start at 100 milligrams then increase in 100 milligrams increments is clinically indicated to a maximum daily dose of 400 mg.

After 22 weeks, patients who exhibit pre-specified improvements in glucose tolerance or hypertension will enter a double-blind placebo controlled, randomized withdrawal phase, lasting 12 weeks. Half of these patients will continue to receive relacorilant and the rest will be switched to placebo. The rate and degree of relapse in patients receiving placebo, we measure against the rate and degree of relapse in those continuing medicine.

I will now turn to our oncology program which in January opened its first Phase 2 trial. I'll start with some background. In cancers where the tumors express GR, such as ovarian, pancreatic and triple negative breast cancer, cortisol stimulates genes that prevent apoptosis, the cell that chemotherapies are meant to provoke. Preclinical and early clinical data suggest that the addition of a cortisol modulator to chemotherapeutic regimen in cost of chemotherapy drug to achieve its full potential.

As many of you know, we've been testing this mechanism in a Phase 1/2 trial of relacorilant combined with Celgene's drug Abraxane in patients with solid tumors. Last year, at ASCO, we reported that of seven patients with metastatic ovarian cancer, four exhibited durable disease control, including one patient with a complete response. As these patients continued in the study, the shortest period of disease control among them reached eight months with the patient who exhibited a complete response continuing to do so 13 months after starting treatment.

As a reminder, all of these patients have previously failed taxane-based therapy, suggesting that the addition of relacorilant had restored the potency of taxane such as Abraxane in treating their illness. These are highly encouraging results in disease where are few few good treatment options. Late last year, our investigators bowed that sufficient results had emerged to prompt the progression of relacorilant plus Abraxane into further clinical study.

In January, we opened the control Phase 2 trial in patients with platinum-resistant ovarian cancer with plans to enroll 180 patients at 30 sites in the United States, Canada and Europe. We will further -- we release further results of the Phase 1/2 study at the time of the ASCO meeting this June. Our Phase 1/2 trial has also produced encouraging data in metastatic prostate pancreatic cancer.

Last year, we reported that 4 of 9 patients had exhibited durable disease control. These are outstanding results in patients with aggressive metastatic disease, all of whom have progressed on one or more taxane in base treatments. We have enrolled additional patients with the disease and plan to report data and the next steps of our development program a few months from now at the time of ASCO.

Finally, we are also exploring the use of cortisol modulators to treat castration-resistant prostate cancer. Androgens stimulate growth and tumors of the prostate, which is why androgen deprivation and androgen synthesis inhibition are common treatments. Unfortunately, patients treated with androgen receptor blockers such as Pfizer's drug XTANDI, eventually develop tumors that express GR and cortisol becomes the tumors primary growth factor.

Our Phase 1/2 trial is evaluating whether combining our selected cortisol modulator CORT125281 with XTANDI and can block this escape route in patients with metastatic disease. We expect to select the dose this year and advance our programs to Phase 2. One of our most promising compounds CORT118335 will enter the clinic next quarter. CORT118335 has shown promise as a treatment for too serious and widespread disorders.

Antipsychotic-induced weight gain and non-alcoholic steatohepatitis, a form of liver inflammation, commonly referred to as NASH that is often a precursor of cirrhosis. At present, there are no good treatments for either indication. Millions of people rely on antipsychotic medications such as such Zyprexa and Risperdal to treat psychosis. The metabolic side effects of these drugs which include weight gain, hyperglycemia and hyperlipidemia substantially diminished and likely shorten the lives of many patients.

We have demonstrated in the placebo-controlled clinical trials in healthy human subjects that cortisol modulation with Korlym significantly mitigates the metabolic side effects caused by Zyprexa and Risperdal. Unfortunately, Korlym's qualities as a border fashion have prevented its development and commercialization as a treatment for such a prevalent disorder. Fortunately, CORT118335 is a selective cortisol modulator with no affinity for PR, because it is not the abortion pill, it can be developed, and if approved, distributed to the millions of patients who could benefit.

We are planning three placebo-controlled trials of CORT118335 in this indication. We plan to open the first trial next quarter to study the prevention of antipsychotic-induced weight gain in healthy subjects using essentially the same protocols we previously used to test Korlym. The next two trials will be in patients. One will evaluate whether CORT118335 can reverse recent weight gain. The other will study whether it can reverse long-standing weight gain. We will start these trials in the second half of the year soon as we complete formulation work on the larger tablet sizes these studies will require.

We are also planning a placebo-controlled Phase 2 trial CORT118335 as a treatment for NASH. We know cortisol modulation may offer treatment for NASH. We observed Korlym reversing fatty liver disease in patients with Cushing's syndrome. CORT118335 is more potent than Korlym in animal models of fatty liver and fibrosis. We plan to start a trial in the second half of the year once required tablet formulation work is complete.

This has been a remarkable year for Corcept. We significantly increased our revenue with non-GAAP profits and cash balance. We began repurchasing our common stock. The intellectual property surrounding Korlym is stronger than it has ever been and our intended replacement for Korlym and relacorilant generated very promising efficacy and safety data in Phase 2, and had entered Phase 3. The future of our Cushing's syndrome franchise has never looked brighter.

Our clinical programs have taken significant steps forward in addition to relacorilant Phase 3 trial. In Cushing's syndrome, we have opened the control Phase 2 trial in metastatic ovarian cancer and will be in a position very soon to determine our plans in pancreatic cancer. COR118335 will enter the clinic next quarter as a potential treatment for antipsychotic-induced weight gain with two additional placebo-controlled Phase 2 trials plan to start later in the year when we also plan to open a placebo-controlled Phase 2 trial to treat patients with NASH.

I'll stop here to answer questions.

[Operator]

[Operator Instructions] We will go first to Adam Walsh with Stifel.

[Adam Walsh, Stifel]

So, the first question is just on the article that came out that was kind of negative on Korlym and I thought you guys did a nice job in refuting that in an 8-K that you put out. I'm just curious to know, when you know some of the allegations were kind of harsh and directed at physicians. Have you seen or heard of any kind of change in Korlym prescribing behavior based on some of the allegations in the report? That’s the first question. Then the second question is just, are you aware of any other companies working toward a generic Korlym at this time?

[Dr. Joseph Belanoff, CEO]

So, first of all, I really do appreciate the question even though of course obviously the basis of it is something that is just you know sort of beyond unfair, both the Corcept and more importantly really to the physicians that we have been working with. The answer is, although, it is never pleasant to have someone cast dispersions on your character in print even if it's in is sort of a one-man band foundation/blog.

The answer is our physicians have not to my knowledge been deterred. They continued to prescribe Korlym because for the reasons they prescribed Korlym all along. They thought it was for the benefit of their patients. So, I haven't seen any impact of it other than irritation and having one's good name dragged through the mud for no good reason whatsoever. So, if I have a little bit of energy behind that is because it's just outrageous. So that's the answer to that question.

As for another generic entry, no, I mean we would -- first of all, if we had any material news, we disclose it, but I am aware of nothing.

[Operator]

We will go next to David Buck with B. Riley FBR.

[David Buck, B. Riley FBR]

I know you've reiterated the guidance for 2019, which obviously, coming off a strong 2018 does imply some slowdown in revenue growth year-over-year as we're in 2019. Can you talk a little bit about the impact, if there is any patient's enrolling in relacorilant trials or competitive trails at Cushing that might be effecting some of the patient counts? And how do you see the dynamic for Korlym this year? There -- are you gaining share chair? Are you losing share perhaps to patients who might be on free drug, research drug? And what -- I know you had it figured the facing action earlier in January. Is that sort of the decision for the year? Or would you reevaluate that going into the second half?

[Dr. Joseph Belanoff, CEO]

Thanks, David, I think I followed your questions in there. And so just I want to make sure to get the whole audience understands really what you're asking, which is that, we now have obviously an ongoing study with relacorilant at the same time we have our first generation commercial product available to patients. So couple things to point out. First, is this, the relacorilant study is both in the United States and in Europe and in fact, in the Phase 2 study, I think because Korlym is not available in Europe, the enrollment was about 70% at the European sites. I don't know if that will be true in the Phase 3 study, but certainly they will have a fair proportion of it.

Nonetheless, you make a good point. There are places where in fact the patient could in fact -- could have gone a Korlym, could in fact enter the relacorilant study that certainly is a possibility, obviously, hard to know in advance how much that happens. But we try to make our best estimate of that in putting together our revenue guidance. So, our revenue guidance takes into account that possible phenomena. Was there a second question?

[David Buck, B. Riley FBR]

Yes, so I was just…

[Dr. Joseph Belanoff, CEO]

You are right. To-date this year, we have not taken a price increase with something that we really look at every quarter and all I can say is the same answer we've always given you, which is it is always something were examining and obviously, we will announce if there is such a change, but to-date we have not made one, but we analyze that on the quarter-by-quarter basis.

[David Buck, B. Riley FBR]

And maybe if I can sneak 1 in as well, Joe. When you switch especially pharmacies, this is, obviously, brought up not by the same one-man band or blog, but there's some conjecture about the change in specialty pharmacies who to obtain and have that might have benefitted revenue. Can you maybe give a review of what might give a decision to change specialty pharmacies and what services are being provided that might not be provided by the open?

[Charles Robb]

David, this is Charlie Robb, I'll answer that one. And the answer is as we switch pharmacies because we thought we knew the teams that had established Optime and we thought they would do the best job working with physicians and patients to get our drug out there and getting into the patient's hands who had been prescribed that dose. That was the motivation for the change. What is the sort of -- I think the implication -- so not your question, but the folks who have sort of ask about that switch is that somehow were using our pharmacy to stuff the channels, so to speak, or somehow inflate or manipulate our revenues.

And there are a number of problems with that argument. The fundamental one is, both at Dohmen, our predecessor pharmacy and at this pharmacy, we sell directly to patients. So there is no channel. Every month as a patient requires Korlym, we ship it to them, we are paid, there is no pharmacy purchasing drug from us that we would dump revenue into. So, that's the -- first of all our revenue at the transparent -- the pharmacy is sort of a completely transparent. It has no impact on our revenue whatsoever.

And separately, to the extent one wonders whether Optime or Dohmen before it, or in this case let's just focus on Optime is an independent entity. Obviously, our pharmacy is an important relationship for us. And so that reason, it is a matter for our annual audit by our auditors who look very closely at our relationship to Optime to ensure that we are independent, which we are in every sense, legal, financial and otherwise. Does that answer your question?

[David Buck, B. Riley FBR]

I think it does.

[Operator]

We will go next to Charles Duncan with Cantor Fitzgerald.

[Peter Stapor, Cantor Fitzgerald]

Hi, this is Pete on for Charles. I have a couple questions on the Phase 3 GRACE study. I don’t know if you can give us a little bit of information about how many sites are been activated, and whether you have identified patients?

[Dr. Joseph Belanoff, CEO]

Okay, so I think that's an important point to I'm glad you gave me an opportunity to answer that. Yes, we're really at the very beginning of the study. The U.S. studies are just coming up right now. We're not -- we're going to do that overtime and sort of not identify specific sites, which have come up as they come up causes to keep updating it. The European sites are not yet up. They will expect them to be up in the second quarter and we will go from there.

[Peter Stapor, Cantor Fitzgerald]

And for the randomized withdrawal portion to study, how many patients do you believe is like minimally required in order to be properly powered?

[Dr. Joseph Belanoff, CEO]

Yes, so, the answer is somewhere between 65 and 70.

[Operator]

We will go next to Matt Kaplan with Ladenburg Thalmann.

[Matt Kaplan, Ladenburg Thalmann]

I want to focus on -- I wanted to focus in on the Teva litigation a little bit and specifically what the two, the newly issued 214 patent kind of gets you in terms of that litigation beyond the I guess the two initial patents and the three other patents that are involved in that litigation with them?

[Charles Robb]

Well, this is Charlie, Matt. I'll answer that. So without commenting on the other patents, right, I think that the difference, the one quality, the 214 patent has that the other patents do not is a direct read on the Korlym label. And that is considered by many people be in especially powerful thing. And that's really the difference. It's the first of our patents that has that express connection. And that's really about all I can say.

[Matt Kaplan, Ladenburg Thalmann]

And then in terms of the sequence and the next steps in that litigation, you mentioned the Markman hearing. When do you think that that will occur? And then I guess I missed the timing of the potential trial that happens?

[Dr. Joseph Belanoff, CEO]

Sure. Well, the schedule only goes to the Markman hearing which is -- and doesn’t go to the Markman hearing, rather the schedule ended December 30 of this year, at which date we and Teva have to propose our dates for the Markman hearing. Now so after that, if timing after that best we can give is sort of typical timing. So with the proposed dates submitted at the end of the year typically the hearing will be held not too long after that.

[Charlie Robb, CFO]

So it would not be an unusual for example for to be in January perhaps February.

[Dr. Joseph Belanoff, CEO]

And then again just speaking typically trial would take place about a year after the hearing, which is why -- so, we are talking January or so of 2021.

[Matt Kaplan, Ladenburg Thalmann]

And just to dig into your pipeline and the timing of the grace study, I guess it's early on in that study, but I guess you had mentioned previously that would take you roughly two years to complete that study. Is that still what your thoughts are?

[Charlie Robb, CFO]

Yes. I mean, again, I just sort of run the numbers for you, Matt, just to make people aware. As said we have 60 sites that we expect to come up for the study, it's about 130 patients. So, it's essentially two patients per site. The period of study really in total is approximately nine months. And so that's our best estimate at this point. Obviously, we are at the very beginning of that we will know better as it's going along, but we have the seismic study and a Phase 2 study from which to base our information.

But I can just tell you we just finished the investigators meeting there is a lot of enthusiasm so lot of it is based on what we saw in the Phase 2 study. So we are going to work as hard as we can to make that go as quickly as we can because we really do think that relacorilant has some significant advantages that Korlym doesn't and we are really anxious to bring this in the market as quickly as we can.

[Matt Kaplan, Ladenburg Thalmann]

And then just a question on your pipeline and I guess specifically thinking about the Phase 1/2 data that you are anticipating at the upcoming ASCO meeting. What should we look for at that data in terms of the update incremental information from prior ASCO?

[Charlie Robb, CFO]

Yes, essentially it's the information which has been added since last year. I know some of it in some sense that kind of given away because the investigators in the ovarian cancer study have already voted based on that data to proceed to the Phase 2 study. So obviously they saw sufficient information to think that it controls really substantial study 180 patients study was warranted and that study has begun. But yes, the specific answer is essentially the update in information in that Phase 1/2 study.

[Matt Kaplan, Ladenburg Thalmann]

And that would drive the decision in terms of initiating a different work in the pancreatic study?

[Charlie Robb, CFO]

Yes, as I said, in ovarian cancer, it was very clear. We still are collecting the last data in patients with pancreatic cancer. But maybe it's worth just, if you're interested just a little bit of detail on that. Basically, the information we have seen so far have been very potent responses in individual patients. That does not prove that the drug works. That's just great for those individuals, but there's no comparator group with that.

Ovarian cancer, it's easy to form up comparator group. There is known sort of late life therapy might look like and having our drug to it or not is actually produces a distinct result. It’s a little tougher in metastatic pancreatic cancer because sort of sadly it sort of end-stage nothing really works and basically the patients who all ended our study, their choices were essentially hospice or our study. There wasn't much else for them to offer.

And in order for the data to be good enough to really proceed to a study that really would be our pivotal study is a big gulp and that's really what were analyzing right now. The last few patients are in that. We obviously -- we will take that or look at that with the hard eye and see where we are. But it isn't that stage and these are cancers, these are particular cancers or one where unfortunately there is not a lot else for these patients and that's a factor and the decision as to what we do.

[Matt Kaplan, Ladenburg Thalmann]

And then last question in terms of the Phase 1/2 trial of the 281 plus XTANDI in the prostate cancer setting. When can we see some initial data from that?

[Dr. Joseph Belanoff, CEO]

Well, we're hoping that we'll actually be able to determine the dose that's really the portion of the study right now and then enter on Phase 2 later in the year. So, I can't tell you because it’s not done yet, but I mention to see all this results to myself and getting on to the next portion of the study.

[Operator]

We will go next to Alan Leong with BioWatch News.

[Alan Leong, BioWatch News]

I want to ask some couple of questions about the antipsychotic-induced weight gain and it's exciting that you've positioned three differentiated Phase 2 trial. Joe, it's been difficult for previous drugs to get traction here and they too looked at the same three conditions. One, weight gain reversal; two, prevention; and three, over an array of a typical antipsychotic, that had -- excuse my question. Can you comment while it's been particularly difficult to achieve treatment effects?

[Dr. Joseph Belanoff, CEO]

Alan, I apologize if I didn’t hear everything you said, but is it why other drugs are not work so well is that the question?

[Alan Leong, BioWatch News]

Yes, especially, first we've been looking at they're trying to achieve reversal prevention and do it over a range of our antipsychotic. Where have they fallen short?

[Dr. Joseph Belanoff, CEO]

I think I understand the question. Yes, well, just to back-up a little bit for context. This really is a thorny problem. You know, I think that many of you know, I know Alan you know that I'm a psychiatrist by training. I actually still see the occasional patient, and these medications while they are terrific in terms of producing psychosis all have this metabolic Achilles' heel where they cause substantial weight gain, insulin insensitivity, and really I think a very diminished or shortened life for these patients and these patients must take the medication.

So, it's really is a dilemma, and we've been working on this frankly, for a very long time. And one of my greatest disappointments, frankly, of course, that was that as well as Korlym worked. There was no path forward for it because of the notoriety of the drug is the abortion pill and that was really a very frustrating thing. As you know, we published all that information it's in peer-reviewed journals, but the test wasn't a path forward for Korlym.

And we thought that GR antagonism, GR modulation really was an effective treatment we saw it in animals, we saw it in the first studies in humans, but it really took getting to the second generation of molecules that were in the abortion pill to really go forward.

Now as to why other people's drugs haven't worked so well, I don't really know that I don't really know the answer to that. But I will secondly what you said it's been unfortunate as a practitioner to see that the other drugs have not worked very well. And so just in all fairness, what we have so far are really two important things. One, we have the actual human data in controlled studies with Korlym indicating a significant effect size and a significant clinical effect.

And two, I can tell you that in the animal models CORT118335 is immensely potent compound significantly more potent than Korlym and that's a good sign. We don't have information in humans yet will be getting that as the year goes along, and then on to next year, and my hope is that we will be able to reproduce what we've seen in animals and what we've seen with Korlym, but only time will tell that. We have not yet treated the first patient with antipsychotic induced weight gain with this medication.

[Alan Leong, BioWatch News]

How would an SPA label and really how does the FDA overall deal look? Would it differentiate reversal as to this prevention? Or is it playing overall mitigation? Or are we really too early in the bargain so the FDA to have a view?

[Dr. Joseph Belanoff, CEO]

The answer is that, before I answer that specifically, let me sort of differentiate things. Because I think this is an important thing people need to think about. This is very different than a weight gain prevention program or weight gain a loss program. There is essentially in the general population. This is really for essentially something that physicians have induced by giving another medication which their patients are required to take. And I think the FDA really looks at that in a very different way.

Now I think that it would be wonderful the way the medication work would be to not only prevent weight gain, but actually reverse the weight gain that these medications are causing. And we have been able to show that in animal models that this class of drugs and particularly COR118335 does both. But before we really talk about how the FDA is going to deal with our specific program, we really need to generate human data and obviously we don't have that so far.

[Dr. Joseph Belanoff, CEO]

Well, listen, thank you all for calling in. Appreciate everyone's time today and look forward to updating you as 2019 goes along. Thanks.

[Operator]

And this does conclude today's conference. We thank you for your participation. You may now disconnect.