Corcept Therapeutics Incorporated (CORT) Q4 2020 Earnings Call Transcript

Corcept Therapeutics Incorporated (NASDAQ: CORT) Q4 2020 earnings call dated Feb. 08, 2021

Corporate Participants:

Charles Robb — Chief Financial Officer

Joseph K. Belanoff — Chief Executive Officer, President, and Director

Sean Maduck — Chief Commercial Officer

Andreas Grauer — Chief Medical Officer

Analysts:

Tazeen Ahmad — Bank of America — Analyst

Chris Howerton — Jefferies — Analyst

Swayampakula Ramakanth — H.C. Wainwright — Analyst

Matt Kaplan — Ladenburg Thalmann — Analyst

Alan Leong — BioWatch News — Analyst

Presentation:

Operator

Ladies and gentlemen, thank you for standing by and welcome to the Corcept Therapeutics Conference Call. At this time, all participants are in a listen-only mode. After the speakers’ presentation, there will be a question-and-answer session. [Operator Instructions] I would now like to hand the conference over to your speaker for today, Charlie Robb, you may begin.

Charles Robb — Chief Financial Officer

Good afternoon, my name is Charlie Robb and I’m Corcept’s Chief Financial Officer. Today, we issued a press release announcing our fourth quarter and full year preliminary selected financial results and providing a corporate update. A copy is available at corcept.com. Complete results will be available when we file our Form 10-K 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 express or imply.

These risks and uncertainties include, but are not limited to, our ability to operate our business and achieve our goals during the COVID-19 pandemic and thereafter including our ability to generate revenue and cash reserves sufficient to fund our commercial operations and development programs; the availability of competing treatments including generic versions of Korlym; the initiation or outcome of litigation; our ability to obtain acceptable prices or adequate insurance coverage and reimbursement for Korlym; and risks related to the development of our product candidates including their clinical attributes, regulatory approvals, mandates, oversight, and other requirements; and the impact of the COVID-19 pandemic on our employees, consultants, and vendors as well as on physicians, patients, insurers, regulators, and the practice of medicine generally.

These and other risks are set forth in our SEC filings which are available at our website and the SEC’s website. On this call, forward-looking statements include those concerning our revenue guidance, cash flow and expected growth; our stock repurchase program; the impact of the COVID-19 pandemic on our commercial operations, financial performance, clinical development programs, physicians, payers, and patients; and expectations regarding our financial performance and clinical development programs after the COVID-19 pandemic is brought under control; physician awareness of hypercortisolism and the selection of Korlym as the optimum medical treatment; timing costs and outcome of litigation, including our lawsuits against Teva Pharmaceuticals and Sun Pharmaceuticals; Teva’s challenge to the validity of one of our patents before the Patent Trial and Appeals Board and any legal action that may arise with Hikma Pharmaceuticals USA; the scope and protective power of our intellectual property; progress, enrollment, timing, design, and results of our clinical trials; and the clinical and commercial attributes of relacorilant, exicorilant, miricorilant, and our other selective cortisol modulators. We disclaim any intention or duty to update forward-looking statements.

I will now share with you some preliminary financial information. Keep in mind these results are prior to the completion of our annual independent audit and are subject to adjustment. Final figures will be available when we file our 10-K later this month. Our revenue in 2020 was $353.9 million compared to $306.5 million in 2019. Our fourth quarter revenue was $85.7 million; in the fourth quarter of 2019, it was $87.9 million. Our fully diluted GAAP net income was $0.85 per share in 2020 compared to $0.77 per share in 2019. In the fourth quarter of 2020, our fully diluted GAAP net income was $0.20 per share; it was $0.24 per share in the fourth quarter of 2019.

We expect revenue growth to resume as the COVID-19 pandemic is brought under control with our 2021 revenue being between $375 million and $405 million. In the fourth quarter, our cash and investments increased by $32.7 million to $476.9 million at December 31st. At December 31st, 2019, it was $315.3 million. We repurchased just under 460,000 shares of our common stock in the fourth quarter at an average price of $21.08 per share. Under the currently authorized terms of our program, $190.3 million remains available for the repurchase of shares. We will determine the timing and size of any future repurchases based on market conditions, our stock price, and other factors.

Now a brief legal update. As most of you know, in March 2018, we sued Teva Pharmaceuticals in Federal District Court to prevent it from marketing a generic version of Korlym in violation of our patents. Originally, trial was set for February 2nd, 2021. Last quarter, the court vacated that date and ordered the parties to be ready for trial by March 17th. That date is no longer realistic although a new one has not been set. Our new trial ready date will most likely be in the second or third quarter of this year, although that is for the court to decide. Whatever the date, we will be ready.

As many of you know, in 2019, Teva challenged the validity of our 214 patent in a post-grant review or PGR before the U.S. Patent Office’s Patent Trial and Appeals Board (PTAB). On November 18th, the PTAB announced its decision, affirming the validity of every claim of the 214 patent. Teva has filed notice that it plans to appeal its loss at the PTAB to the Federal Circuit Court of Appeals and has until March 12th to file. Appeals to the Federal Circuit take about 12 to 16 months to resolve. The soonest we expect a definitive resolution of the PGR is the first quarter of 2022. Unless and until Teva prevails on appeal, an outcome we think unlikely, the 214 patent is and will remain valid. Furthermore, Teva is barred from challenging the 214 patent’s validity in our district court action using any arguments it raised or could have raised before the PTAB.

Sun Pharmaceuticals is also seeking to market generic Korlym. Our lawsuit against Sun has stayed final FDA approval of Sun’s proposed product until the early of December 8th, 2021 or a decision by the district court that our patents are invalid, unenforceable or not infringed. Our dispute with Sun is separate from our litigation against Teva and is following its own more indolent timeline. There are at present no trial date or discovery deadlines in this action. Finally, on February 1st, we received notice of another ANDA filer, Hikma Pharmaceuticals USA, another generics manufacturer which seeks to enter the Korlym market is not surprising, it’s an attractive market. The important point is this, as is true with respect to our disputes with Teva and Sun, we are confident in the strength and validity of our intellectual property, which we will assert vigorously. I will now turn the call over to Dr. Joseph Belanoff, our Chief Executive Officer. Joe?

Joseph K. Belanoff — Chief Executive Officer, President, and Director

Thank you, Charlie. Much of life is unknowable, but of one thing I am sure, last January, no company had the words COVID-19 in its business plan. Like the virus itself, the challenges posed by the pandemic have been unprecedented and persistent. In such a difficult environment, Corcept’s stable commercial business and lean operating model are especially valuable. We did not achieve all of the goals that we set for ourselves before the pandemic started, but we accomplished a lot. We generated more revenue, more net income, and more cash in 2020. The patent office ruled against Teva in full in Teva’s challenge to our 214 patent, which runs to 2037. We are more confident than ever in our intellectual property and added several more Orange Book patents over the course of the year.

Our commercial team has adapted to pandemic conditions creatively. The obstacles they face and have faced since last March are significant. The diagnosis of Cushing’s syndrome requires extensive examination and repeated testing. This is obviously hampered by patients being reluctant to leave their homes and by physicians’ understandable concern about necessary follow-up. In addition, many medical practices have sharply limited in-person visits by commercial representatives, reducing educational opportunities for physicians who have not yet prescribed Korlym. The challenges posed by remote medicine made growing our business extremely difficult in 2020. We continued to enroll new patients and added to our roster of Korlym prescribers more slowly.

We are confident the pace of enrollment will quicken as pandemic conditions improve. The signs we see now are encouraging. Many physicians have begun to resume seeing patients in-person. Patients are becoming more comfortable leaving their homes to seek care. These visible shifts, if they are sustained, bode well for our results. The foundation of our business, an effective life-saving medication promoted by a dedicated commercial team that puts the interest of patients first remains rock solid and is poised to support significant growth once conditions improve. We hope not, but there may be setbacks and temporary reversals, but a brighter future is in sight. We are confident in our commercial prospects in 2021 and beyond.

The pandemic’s impact on our development activities has been variable. It has significantly slowed the pace of studies in illnesses that are less rapidly progressing. It has been frustrating to watch our trials in patients with Cushing’s syndrome, castration-resistant prostate cancer, antipsychotic induced weight gain, and non-alcoholic steatohepatitis or NASH accrue patients more slowly than they would have in a world without COVID. During this slowdown, we are working to ensure that our clinical trial sites are ready to make rapid progress once conditions improve. In contrast, studies in patients with acutely life threatening diseases have been largely unaffected. Our trials in patients with metastatic pancreatic cancer and platinum resistant ovarian cancer, severe diseases for which there are no good treatments enrolled briskly and will produce data in the first half of this year as we expected before the pandemic set it.

We are also excited about the progress last year in new clinical development efforts. Despite pandemic-related obstacles, we opened important trials: Phase 3 trial in patients with metastatic pancreatic cancer, a Phase 1b trial in patients with advanced adrenal cancer, a second Phase 2 trial in patients with the antipsychotic induced weight gain, and a Phase 2 trial in patients with NASH. We also continued to advance new selective cortisol modulators. One such compound, CORT113176, has shown promise in animal models of ALS. We plan to evaluate it in a Phase 2 trial, beginning in the fourth quarter of 2021. As I’ve said before, I do not know any company of Corcept’s size that combines commercial success with such diverse and promising clinical activities.

As many of you know, we are evaluating relacorilant, our planned successor to Korlym, for the treatment of hypercortisolism in two Phase 3 trials. Relacorilant is a selective cortisol modulator. Like Korlym, it achieves its effect by competing with cortisol at the glucocorticoid receptor. Unlike Korlym, it does not bind to the progesterone receptor, PR for short, which means it does not cause PR effects including termination of pregnancy, endometrial thickening, and vaginal bleeding. By a different mechanism, relacorilant also does not appear to cause hypokalemia, low potassium, serious side effects experienced by 44% of patients in Korlym’s pivotal trial. Korlym induced hypokalemia is a leading cause of Korlym discontinuation. We expect relacorilant’s Phase 3 GRACE trial serve as the basis for our NDA submission in Cushing’s syndrome.

GRACE continues to enroll patients although the pandemic has significantly slowed the rate of addition. The surge in COVID infections seen in the United States and Europe in the third and fourth quarters of last year coupled with the slow pace of vaccinations will mean we are unlikely to meet our target of submitting an NDA in the second quarter of next year. The date we ultimately achieve will depend in large part on the virulence and duration of the pandemic. It is difficult to know how long the current pandemic conditions will persist. If they are slow to abate, our NDA submission can be delayed as much as a year. We are working to ensure that our sites are ready to resume aggressive, effective enrollment as soon as conditions permit.

The delay in GRACE is exceptionally frustrating. Relacorilant’s Phase 2 results were strong. Patients experienced meaningful improvements in hypertension and glucose control as well as in a variety of other signs and symptoms of Cushing’s syndrome. There were no relacorilant induced instances of endometrial thickening or vaginal bleeding and also no drug-induced hypokalemia. We and our investigators are anxious to take GRACE to the finish line. Our second Phase 3 trial of relacorilant in patients with Cushing’s syndrome, GRADIENT, studying relacorilant’s effects in patients whose Cushing’s syndrome is caused by an adrenal adenoma or adrenal hyperplasia. Patients with this etiology of Cushing’s syndrome often experience a less rapid decline, but ultimately, their health outcomes are poor. GRADIENT is the first controlled study in patients with this type of Cushing’s syndrome. We expect its findings will contribute to the optimal treatment of these patients.

As I mentioned, our trials in metastatic ovarian and metastatic pancreatic cancer will produce data in the first half of this year. Before I go further, let me provide some background. Our oncology program is testing three mechanisms postulated by investigators at the University of Chicago more than 10 years ago. The first mechanism, which we are evaluating in our study in ovarian and pancreatic cancer, concerns apoptosis, the programmed cell death chemotherapy is intended to induce. Cortisol suppresses apoptosis. There is compelling pre-clinical and clinical data suggesting that relacorilant can blunt cortisol’s anti-apoptotic effect helping chemotherapy reach its full potential.

Our study in ovarian cancer is a controlled Phase 2 trial in 178 patients with platinum-resistant disease. The trial has three arms. Patients received either continuous or intermittent doses of relacorilant plus nab-paclitaxel or nab-paclitaxel alone. Trial’s primary endpoint is progression-free survival with secondary endpoints including objective response rate, duration of response, and overall survival. We hope data from this trial will guide us to design a Phase 3 study that will lead to a successful NDA. We will have top line results from this study in the second quarter.

Our study in pancreatic cancer, RELIANT, has a planned enrollment of 80 patients with metastatic disease with each patient receiving relacorilant plus nab-paclitaxel. The trial’s primary endpoint is objective response rate with secondary endpoints including progression-free survival, duration of response, and overall survival. The trial design includes an analysis of data from the first 40 patients. We will also have top line results from this cohort in the second quarter. In addition to blunting apoptosis, cortisol activation reduces inflammation and suppresses the immune system, which is why synthetic cortisols are used to treat inflammatory and autoimmune disorders.

Unfortunately, by suppressing the immune system, cortisol also diminishes the effectiveness of immunotherapy in patients with solid tumors. In September, we initiated an open label Phase 1b trial of relacorilant plus the PD-1 checkpoint inhibitor pembrolizumab, Merck’s drug, Keytruda in patients with advanced adrenal cancer whose tumors produced excess cortisol. These patients suffer the effects of adrenal cancer and Cushing’s syndrome, a usually quickly lethal combination. We believe that cortisol excess may also counteract the intended effects of pembrolizumab, which is rarely effective as monotherapy in these patients.

Our trial is evaluating whether relacorilant can treat these patients Cushing’s syndrome by reducing the effects of excess cortisol activity and by reversing cortisol induced immune suppression also allow pembrolizumab to achieve its full cancer-killing effect. Our posters at this year’s ASCO and AACR meetings present pre-clinical and clinical biomarker data supporting our hypothesis. You can review them at the Research & Pipeline/Publications tab of our website. We plan to enroll 20 patients in this trial at five sites in the United States. Primary endpoint is objective response rate with secondary endpoints including progression-free survival, duration of response, and overall survival.

The third mechanism we are studying concerns cortisol’s ability to stimulate tumor growth in patients with castration-resistant prostate cancer. Cortisol stimulation is a major reason patients treated with the widely prescribed androgen receptor antagonist enzalutamide eventually experience resurgent disease. Deprived of androgen stimulation, their tumor switched to cortisol activity as a growth pathway. Our hypothesis is that adding a cortisol modulator to androgen deprivation therapy will close this tumor escape route. We are conducting a Phase 1b trial of our selective cortisol modulator exicorilant combined with enzalutamide in patients with castration-resistant prostate cancer and expect to identify a dose regimen suitable for advancing to a larger controlled study in the second or third quarter of this year.

I will conclude with a brief update on our program in metabolic diseases where our selective cortisol modulator, miricorilant, has shown promise in pre-clinical and clinical studies. In animal models, miricorilant prevents and reverses fatty liver disease and liver fibrosis, two precursors of NASH, a serious disorder that affects 5% of the U.S. population. In December, we opened a double-blind placebo-controlled Phase 2 trial of miricorilant as a treatment for patients with NASH. The trial has a planned enrollment of 120 patients at 15 sites in the United States. Study participants will receive daily dose of either 600 milligrams of miricorilant, 900 milligrams of miricorilant or placebo for 12 weeks. We are also evaluating miricorilant as a treatment for antipsychotic induced weight gain, a serious and widespread disorder.

In the United States, 6 million people take antipsychotic medications such as olanzapine, Eli Lilly’s drug Zyprexa and risperidone, J&J’s Risperdal, to treat illnesses such as schizophrenia, bipolar disorder, and depression. While these drugs are very effective, they exact a steep price in the form of rapid and sustained weight gain, cardiovascular disease, and other metabolic disturbances. Patients can gain more than 50 pounds and their life expectancy is decreased on average by 20 years due in part to excess cardiovascular events such as heart attacks and strokes. We have completed three double-blind, placebo-controlled clinical trials in healthy subjects in which co-administration of a cortisol modulator reduces these dangerous adverse effects.

Two of these trials use mifepristone, the active ingredient in Korlym. Our positive results were published in the journal’s Advances in Therapy and Obesity in 2009 and 2010. Unfortunately, Korlym which shares its active ingredient with the abortion pill, cannot be advanced for such a prevalent disorder. Miricorilant is not the abortion pill and can be advanced for this use. Results for miricorilant’s first trial in this disorder were promising. In that trial, 99 healthy subjects received olanzapine in either 600 milligrams of miricorilant, 900 milligrams of miricorilant or placebo for 14 days. Study participants who received miricorilant gained statistically significantly less weight than those who received placebo. In addition, they exhibited a smaller increase in triglycerides and in the liver enzymes, AST and ALT, markers of liver damage that rise at the onset of olanzapine therapy. We plan to publish a paper presenting the results of the study later this year.

Our double-blind placebo-controlled Phase 2 trials of miricorilant in antipsychotic induced weight gain continued to enroll patients. The GRATITUDE trial is evaluating whether miricorilant can reverse recent antipsychotic induced weight gain. 100 patients with schizophrenia or bipolar disorder will receive in addition to their established dose of antipsychotic medication either 600 milligrams of miricorilant or placebo for 12 weeks. GRATITUDE is being conducted at 30 centers in the United States. Our GRATITUDE II study is testing miricorilant as a treatment for long standing antipsychotic induced weight gain. 150 patients with schizophrenia will receive in addition to their established dose of antipsychotic medication, either 600 milligrams or 900 milligrams of miricorilant or placebo for 26 weeks. GRATITUDE II will be conducted at 35 centers in the United States. The primary endpoint in both studies is reduction in body weight. Other important measures of metabolic activity will also be examined.

In 2020, the COVID pandemic had a real effect on Corcept as it did on most companies. Nonetheless, we enter 2021 stronger in every respect: financially, legally, and clinically. Although our financial results were affected by the pandemic, our revenue, net income, and cash balance increased significantly. We expect further growth as pandemic conditions improve. Our revenue guidance for 2021 is $375 million to $405 million. Our clinical programs also made substantial progress. Five existing trials advanced and important new trials were started. The pandemic slowed enrollment in some of our trials significantly, especially those studying diseases that are not acutely life threatening. This slowdown has delayed our target date for submitting relacorilant’s NDA as a treatment for Cushing’s syndrome. That being said, all of our trials continue to add patients and collect valuable data and we expect the pace of enrollment in all of them to accelerate once conditions improve.

We completed enrollment in both our Phase 2 trial of relacorilant plus nab-paclitaxel in patients with metastatic ovarian cancer and a short time ago in the first 40-patient cohort of RELIANT, our Phase 3 trial in patients with metastatic pancreatic cancer. We will have data from both these trials in the first half of this year as planned. Enrollment is underway in our Phase 1b trial of relacorilant combined with a PD-1 checkpoint inhibitor pembrolizumab to treat patients with advanced adrenal cancer and cortisol excess. In the second and third quarter of this year, we expect to select the optimum dose of exicorilant to advance in combination with enzalutamide in a controlled Phase 2 trial in patients with castration-resistant prostate cancer. Finally, enrollment is underway in three double-blind, placebo-controlled Phase 2 studies in patients with metabolic disorders, one in patients with NASH and two, GRATITUDE and GRATITUDE II in patients with antipsychotic induced weight gain. I’ll stop here for questions.

Questions and Answers:

Operator

Thank you. [Operator Instructions] Our first question comes from Tazeen Ahmad with Bank of America. Your line is open.

Tazeen Ahmad — Bank of America — Analyst

Hi, good afternoon and thank you so much for taking my questions. One question on Korlym if I may. I wanted to get your thoughts on how you’re thinking about the ramp in sales for this year. You did talk extensively about potential headwinds from COVID and slower than expected vaccination rates as part of your prepared statements, but are you thinking that the pace of growth this year could accelerate more so in the second half of the year. And I guess, to the extent that you can talk about how you made your internal calculations about what you think the lower-end of the range would be this year, that would be helpful. Thank you.

Joseph K. Belanoff — Chief Executive Officer, President, and Director

Good to talk you to Tazeen. I’m just going to switch over to Sean Maduck, who you’ve all heard from before. Sean is our Chief Commercial Officer and runs all of our commercial business in Cushing’s syndrome.

Sean Maduck — Chief Commercial Officer

Hi, Tazeen, thanks for the question. So in terms of 2021 revenue and scale up. I mean obviously January 1st is not a lot different than December 31st of last year but region by region, we are starting to see light at the end of the tunnel and conditions around the country have improved over the last few weeks. COVID cases are declining and based on our own research and expertise, patients are less fearful to visit their doctors in-person and for the most part, patient case loads have returned to pre-pandemic levels. And we’ve stated on earlier calls and Joe mentioned in his statement, this is a disease that takes multiple physician visits and multiple tests to actually diagnose. So this increased patient visits bodes well for testing and diagnosis, which we believe will lead to more Korlym prescriptions.

One other point, just for Corcept specifically is, it seems like a long time ago now, but as a reminder for everybody, we executed on a sales force expansion at the end of 2019, which was completed at the beginning of last year and then the pandemic started. So we never really had the opportunity to experience the full effect of our expanded field. So they’ve been doing their best over the last year to meet with both — physicians both in-person and virtually. They’ve been training and getting ready to hit the ground running when things open up and I expect as the country opens up more and more and in-person interactions increase, we’ll see an increase in productivity. So things are definitely not going to change overnight, but again, conditions really have started to improve and we are optimistic for a return of — some return to a semblance of normalcy this year.

Tazeen Ahmad — Bank of America — Analyst

Okay, that’s helpful. And maybe a related question on relacorilant. So as it relates to enrollment in your current studies, are you making the assumption that the delay of up to one year, what does that assume I guess in your internal assumptions about when you think that people are going to be vaccinated. I know there are estimates about when the U.S. can achieve herd immunity. Is that a major factor in determining the enrollment rate in your study or are there other things that you’re also taking into account?

Joseph K. Belanoff — Chief Executive Officer, President, and Director

Two things, Tazeen. First, I want to give everyone a chance to hear from Andreas Grauer again. Andreas is our Chief Medical Officer and I reserve the right, Andreas, to maybe add a comment or two when you’re done.

Andreas Grauer — Chief Medical Officer

Yeah, Tazeen, thank you for the question. It’s obviously the million dollar question for all of us these days, how do we assume or what kind of assumptions do we make for the pandemic. And keep in mind, this is a global trial. We have enrollment going on in the U.S. and Canada and in a number of European countries and the dynamics of the vaccination is different in all of those. So there is no one fixed state that we base our assumption on. We’re actually working with each individual side. There are pockets in some of the countries that show signs of improvement just like as a specific example, the City of Rome in Italy, they seem to be ahead of the curve in Italy. The rest of Italy not so much. So we’re looking at this at a very granular level and have made sort of a site-by-site assessment on when we think they will be able to pick things up again and that has led us with that assessment and also with the remaining uncertainty.

Tazeen Ahmad — Bank of America — Analyst

Okay, thank you.

Joseph K. Belanoff — Chief Executive Officer, President, and Director

Thank you, Tazeen.

Operator

Thank you. Our next question comes from the line of Chris Howerton with Jefferies. Your line is open.

Chris Howerton — Jefferies — Analyst

Hey, there. Thanks so much for taking the questions, appreciate it. So I guess maybe just to follow-up on the previous question in terms of revenue guidance for this year. So what I heard you say, Sean, was that essentially you’re expecting an increase in some point in this year and certainly an impact of your sales force expansion, but like what — is there any more color that you can give us with respect to specific factors that went into the revenue guidance and maybe some things might specifically could be like increased compliance, new patient adds, and price increase might be some things that investors could be interested in?

Joseph K. Belanoff — Chief Executive Officer, President, and Director

Yeah, okay, Chris, this is Joe Belanoff, I’ll answer at least part of your question here. Look, we would really like, probably everyone else in the world, to know how soon this is going to be over in — from this point forward. I just have to reiterate what Andreas and Sean said, we are seeing things that weren’t happening two months ago happening right now. I don’t know if that’s going to continue, but certainly at this point, the trend at least however slight, really looks like it’s in an improving zone.

And I think that the major thing I’ll just repeat from my comments earlier is that patients who are already on the medicine are doing fine on the medicine and they remain on the medicine really as a group. The hard thing has been adding new patients. And so patient enrollment is really what we think is going to pick up over the course of the year, new patient enrollment over the course of the year, and obviously, we’ll see what happens as time goes on, but we have good reason to think that actually we’ll be ending 2021 at a very different place than we ended 2020.

And so, of all of the things that you’ve mentioned, I think that’s probably the single biggest thing that will lead to growth over time and how quickly that is possible is really going to be the biggest factor in how our revenues increase over the next year, basically based on what we saw sort of in the worst of the pandemic. That was the issue and so that’s what we’re looking forward to. I wish we could give you kind of better timing. I will say, because it’s not really something that you wouldn’t assume. We are assuming improvement over the course of the year although in some sense, not for a while because it really, it is not going to go all away at once, but I think we’ll be looking at a different world nine months from now, six months from now than what we’re looking at today.

Chris Howerton — Jefferies — Analyst

Well, I mean I don’t think I speak alone that I completely agree with your sentiment and I truly hope and believe that it to be the case, not only for Corcept, but more broadly absolutely. Well, maybe just another quick question on the ovarian cancer trial. I guess, as we’re getting closer to those data, what do you — what are the expectations or possibilities of attaining accelerated approval based upon the outcome of this trial and if that weren’t to be the case, what are the specific learnings that you think you can achieve from this trial to design a successful Phase 3?

Joseph K. Belanoff — Chief Executive Officer, President, and Director

Yeah, exactly on the question I think about, Chris, so very good. This trial, just to give everyone a little bit of background who maybe hasn’t followed Corcept for long, is that this is a Phase 2 study based on a relatively small group of patients in Phase 1. So we look at this study as a really great opportunity to learn where the disease works, in which patients it does better, and really to set up as a design — to help us design what we very much anticipate will be a Phase 3 program.

I think the probability of the ovarian cancer study leading to an accelerated approval really is pretty small and I don’t think anybody should really go in with that kind of expectation. Now that said, fingers crossed and rooting for it and so forth, but really our internal thinking is, this was the first opportunity to study a serious group of patients in number, about 180 patients and we really think we will extend on the promise we saw in the Phase 1 study and learn a lot so they can really design a program that will take us to a finish line, but you should anticipate that a large Phase 3 study is still to come.

Chris Howerton — Jefferies — Analyst

Okay, all right. Well, that’s very clear. Thank you. I appreciate the comments, Joe and thanks for your time.

Operator

Thank you. Our next question comes from the line of Swayampakula Ramakanth with H.C. Wainwright. Your line is open.

Swayampakula Ramakanth — H.C. Wainwright — Analyst

Thank you. This is R.K. from H.C. Wainwright. Good afternoon, Joe and Charlie. So to start off, I understand you have tried to help us have a certain idea of 2021 in terms of Korlym revenues and I just want to see if you can give us a little bit of an idea of what happened in the fourth quarter. Certainly you walked into fourth quarter with the lowering of the guidance and still, there was an impact and is there a way for you to give us an idea of what sort of an impact that was and maybe that’s kind of — that will give us an idea of what you’re concerned about for 2021?

Joseph K. Belanoff — Chief Executive Officer, President, and Director

I apologize, R.K. because I had a little trouble hearing you, but I think I got the gist of your question. And in some ways, it’s probably a pretty simple unsatisfying answer, which is simply that the disease got worse in a lot of parts of the United States in post-Thanksgiving and everyone kind of experienced that and it really allowed for much less opportunity for doctors to be seen, for patients — for doctors to see their patients and so that’s really the single biggest factor and I think that as we move forward and that begins to abate, we will — that trend will reverse.

And again, I wish I could give you more detail on sort of exactly how that’s going to become, but really in some sense, the answer to your question is simple and if progress is to be made, it is going to be simple. It’s going to be completely related to how much sort of the world opens up because as I said before, our existing patients taking the medicine really remain well treated and so forth, but getting the information to doctors and having the doctors be able to take care of their patients optimally, it’s very difficult for new patients in the COVID environment.

Swayampakula Ramakanth — H.C. Wainwright — Analyst

Okay, thank you for that. Regarding the Hikma challenge. How different is it from what Teva and Sun — I mean what Teva and Sun are challenging or is it the same set of patents?

Joseph K. Belanoff — Chief Executive Officer, President, and Director

I’m going to pass you to Charlie for that question R.K.

Charles Robb — Chief Financial Officer

Hey, R.K., just because this is really so arcane, let me just take a minute to give folks some background just so everyone’s oriented here. The way these challenges work is there is a legal scheme whereby a would be generic manufacturer provides us notice that they plan to seek approval to be a generic manufacturer and that gives us time to decide to sue them in district court for violation of our patents and then litigation goes from there. If we sue them, there’ll be a 30-month stay of any FDA approval of their proposed medication while we litigate the issues and that’s what happened with Teva, that’s what happened with Sun and we’ll see how things exactly proceed with it, but we received their notice a week ago.

From what we received in the notice, there is really nothing new, nothing about this is any different than anything we’ve seen before with respect to our other litigants and I guess I would say that the other thing to appreciate is this is a very standard course of events for disputes like this. An initial generic manufacturer steps forward, in this case, it was Teva, a litigation with them ensues and it’s very common for a second and third and fourth would be manufacturers to hang back, attempt to seek approval later just in the hope that if the initial mover, Teva, is able to secure anything, they’ll be able to secure something in form of a settlement. Not as good as that the initial filer secures, but something secured at a much lower cost, they just kind of tag along.

I don’t know exactly what Hikma’s strategy is going to be. It’s obviously much too early to know, but this is exactly the course of events you’d expect to see. So I think the important point really is or two, as you asked, nothing really new and secondly, certainly nothing that makes us any less confident in the protective power of our intellectual property. So we’ll see exactly what happens, but it is nothing unsettling or unusual.

Swayampakula Ramakanth — H.C. Wainwright — Analyst

Thank you. And then regarding the clinical data that is anticipated in the first half of this year. Is there a venue that you would — you’re thinking of or is this going to be just a press release over that time?

Joseph K. Belanoff — Chief Executive Officer, President, and Director

My guess is that it will initially be a press release because we’ll in all likelihood can’t imagine it not being material information and then we will do conference presentations. I don’t know if Andreas has any color on that yet, but over time we will — we’re all sort of recovering academics. So we’ll be at more than one conference.

Andreas Grauer — Chief Medical Officer

Yeah, that’s exactly the plan. We’re going to like timeline wise, we’re going to miss the ASCO deadlines and so, therefore, it will be exactly as Joe has outlined it.

Swayampakula Ramakanth — H.C. Wainwright — Analyst

Okay, perfect. Waiting to see it. Thank you very much, gentlemen. Appreciate it.

Joseph K. Belanoff — Chief Executive Officer, President, and Director

[Speech Overlap] Good to talk to you.

Operator

Thank you. Our next question comes from the line of Matt Kaplan with Ladenburg Thalmann. Your line is open.

Matt Kaplan — Ladenburg Thalmann — Analyst

Thank you. Hi guys, thanks for taking the questions. I just wanted to dig in a little bit more in terms of the implications of the PTAB affirmation of the validity of 214 patent with I guess term out to 2037. What are the implications for the Teva litigation and potentially I guess Sun Pharma and Hikma?

Charles Robb — Chief Financial Officer

Sure, Matt. Happy to answer that and again, I’ll just give everybody a little bit of a — a brief TED Talk on legal process before I answer your question directly. These — patent litigation in the United States and these sort of Hatch-Waxman litigations we’re under — involved in now can follow a parallel course, meaning 2018 when Teva announced they wanted to enter the Korlym market, we sued them in Federal District Court and a year after that when Sun said they want to enter the market, we sued them in Federal District Court and those cases have been proceeding, especially the Teva case, doing all the normal things you do in litigation with discovery and motion and expert testimony all that stuff, it’s just been moving along ever since.

Now, in parallel, you can also litigate patents in front of the patent office in a sort of quasi judicial administrative type of proceeding. And so after we asserted our patents against Teva including eventually this 214 patent, Teva went to the patent office and said, look, with respect to this 214 patent, we think it’s invalid, it never should have been issued and we want you to look at it again and the patent office agreed to do that in a procedure called a post-grant review and after a year of back and forth in front of the patent office where we presented our arguments and evidence and witnesses and Teva presented their arguments and evidence and witnesses, the patent office decided in our favor. They ruled that every claim of the 214 patent was valid and that’s where we stand right now.

So the question that we have a valid patent, Teva’s challenge failed may by the way, have the right to appeal that loss, which they have filed notice saying they plan to do and their filing is due no later than March 12th. So we’ll see what happens if they agree to do that. If they do file an appeal, it will be to the Federal Circuit Court of Appeals. Those take about a year to 16 months to resolve, which is why we say the issue won’t be fully settled until this time next year basically or a little bit after that, but until then, the patent is valid and in place and the question then is, what does that mean for the parallel district court dispute, that litigation. And the answer is that the law is designed to keep litigants from having sort of what they call one more bite at the apple, yeah. So having chosen to challenge the validity of our 214 patent before the patent office and lost, Teva is now barred from challenging the validity of that patent using any argument it raised or could have raised at the patent office, which I think in this case is a pretty comprehensive list of arguments.

So, for all intents and purposes, Teva is now barred from challenging the validity of that patent in district court. As this dispute goes along, they are faced with a conceitedly valid patent and their only recourse with respect to it is to argue that they would not — their product would not infringe it, which is a difficult argument for them to make. So, the consequence is that Teva’s options are drastically narrowed with respect to that patent and you recall in these cases, the patent owner has to only prevail on one patent to prevail overall. So Teva has really put themselves in a very, very tough spot. That’s the implication for Teva.

Every litigant is different. Sun would have the right to challenge the patent. Hikma, if we get into litigation with them, would have the right to challenge the patent’s validity, but they will all face the difficulty sort of the difficult fact that the patent office has now both issued the patent and examined it essentially a second time in a quasi judicial proceeding and reaffirmed the validity of it. So all of our challengers are in a tough spot especially Teva, which is not to lose the import of all this in my sort of exposition of legal process, very good news for us.

Matt Kaplan — Ladenburg Thalmann — Analyst

That’s very helpful, Charlie. Thank you for the additional color and clarity. Another question in terms of your clinical development programs. There seems to be a bit of a dichotomy, which for me in terms of what you’re saying about the return to growth for Korlym later this year and the extension potentially for at least another year of the timing for the GRACE results and filing of the NDA potentially out to second quarter of ’22 now. Help me understand, maybe you guys can give us some more detail in terms of the current status of the GRACE study and where that is and why you’re thinking based on the other inputs that it could be delayed by as much as a year?

Joseph K. Belanoff — Chief Executive Officer, President, and Director

Well, Matt, I really understand the nuance of the question and try to kind of walk you through as best I can, but I think the most important thing to understand is that while the pandemic affected almost everything, it didn’t affect everything identically. So for instance, I’ll give you an example of that. Doctors who work in their own office in the community as an example, their living depends on them seeing patients particularly patients in person and as a consequence, I think they have been more — we see in the last weeks or so more aggressive in sort of getting back to work. So that’s an effect which we see primarily in our commercial business.

On the other hand, major medical centers, particularly those medical centers which are in their countries are treating COVID, have basically said for non-acute purposes, our resources are really diverted to that business. And so when things get better, they are going to get better all around, but not necessarily at the same pace. And so we don’t have a great prediction as to particularly the latter because that’s what you’re really asking about in terms of trial enrollment, a little bit harder for us to really visualize since we’ve never been in this circumstance how fast those places reopen.

We absolutely hope they open as quickly as they can so we can really get moving on it, but I just want to point out that these situations are not exactly the same in commercial than they are in clinical and even within the clinical development program as I pointed out, they are not identical either. For instance, the pancreatic and ovarian cancer studies actually came in a couple of months ahead of where they thought they would. Those are very ill patients, they have to go to the hospital anyway. So to continue them in a clinical trial — enter into them in a clinical trial didn’t — wasn’t distracted much by the pandemic.

On the other hand, you have diseases where tomorrow or the next day or the next week don’t seem to be as critical. It’s more easy for patients to avoid those studies or for doctors to not be as active in this study. So I just point this out because it is obviously a new learning for all of us as we went through the pandemic. I’ll just sort of repeat where I started, the pandemic affected everybody or almost everybody, but just to different degrees and we’ll see how it plays out. Obviously, if in fact major medical centers open quicker to clinical trials like ours, we’ll get done quicker. It’s really as simple as that and it may go slowly. Then there’s not much we can do except continue to be ready for when they move less slowly.

Matt Kaplan — Ladenburg Thalmann — Analyst

That’s good added color. Thank you for walking through that.

Operator

Thank you. Our next question comes from the line of Alan Leong with BioWatch News. Your line is open.

Alan Leong — BioWatch News — Analyst

Congratulations to the team. It may be moving slower, but the story looks like it’s unfolding as you outlined before. So, congratulations. Now, first, we noticed that bipolar patients were added to the GRATITUDE trial. Can we hear your thinking on this like example are you preparing the setting for potentially adding bipolar patients to the eventual label or are you strengthening the argument for any non-short-term use of antipsychotics on weight gain.

Andreas Grauer — Chief Medical Officer

That’s a great question and a great observation. Yes, indeed we have added bipolar patients to the original GRATITUDE study. I mean, first of all, we believe that the nature of weight gain and as cutting this weight gain is very similar in schizophrenics and bipolar patients and therefore, it allows us to broaden our base and hopefully facilitate enrollment. On the other hand, if we see consistent results as we hoped, then it may have label implications downstream. Let me remind you, we’re still in Phase 2 at this point and whatever we find will have to be confirmed in a Phase 3 trial, but we learn as much as we can and that’s certainly an important insight that we’re looking forward to have.

Joseph K. Belanoff — Chief Executive Officer, President, and Director

And just let me sort of sum it up in a sense for you, Alan, because I agree with everything that Andreas said. The bottom line is this, what causes the weight gain is not the diagnosis, it’s the medicine. And so patients with bipolar disorder and schizophrenia can be equally prone to having the metabolic issues from these medications and it is important to study them because they are both very large groups of people.

Alan Leong — BioWatch News — Analyst

Congratulations on the CYP inhibition publication. Relacorilant’s profile for drug-drug interactions isn’t as bad as perhaps once feared. Can you provide any light? It seems that only mild dose adjustments are required with abraxane and perhaps also with enzalutamide. So anything you could provide would be helpful.

Joseph K. Belanoff — Chief Executive Officer, President, and Director

Well, as you often do, Alan, you actually read our papers and we don’t even pay you to do that. So I wish more people would read them, but you’re absolutely right. The drug-drug interactions related to relacorilant when we actually tested them in people in rigorous drug-drug interaction studies proved to be much more limited than some people thought they might be. It’s really as simple as that and it really makes it — the interaction, for instance with nab-paclitaxel is really quite manageable with a relatively small does reduction in nab-paclitaxel getting to the right dose. So in some sense, no surprise to us, we have that data. We talked about it as we wanted to, but now it’s been peer-reviewed and published and for people who really do want to read about it in detail, please come to our website and you can find out at the site.

Alan Leong — BioWatch News — Analyst

And a real quick bonus question, I noticed there is a new drug in clinical trials. I know it’s in a liquid capsule form. Can you provide any additional light on the matter at this time?

Joseph K. Belanoff — Chief Executive Officer, President, and Director

Yeah, Alan. I’m not positive. We often use — I think maybe you’re referring to the soft gel capsules for relacorilant. We’ve switched that because we felt like it was both easier to manufacture and was going to produce more reliable plasma levels. We’re not the only people who have actually done that earlier in development, which is easier to do this hard gel capsules and we just think this is better. So I think that’s what you’re referring to and that’s the reasons we did it. We found a really sound manufacturer who could produce very reproducible levels when they tested the drug.

Alan Leong — BioWatch News — Analyst

So you just re-labeled it as CORT125329?

Joseph K. Belanoff — Chief Executive Officer, President, and Director

Oh, different question. CORT125329 is a compound in Phase 1 studies where that is also the case. That’s right.

Alan Leong — BioWatch News — Analyst

Awesome. Thank you.

Joseph K. Belanoff — Chief Executive Officer, President, and Director

But in general, that’s a direction that we would choose to move when manufacturing makes it possible. All right. Well, listen, thank you guys very much post-Super Bowl and on a cold day in New York, thanks for listening in and we’ll be back to you next quarter and fingers crossed that there will be a lighter pandemic conversation by that period of time.

Operator

[Operator Closing Remarks]