Leg:
* As expected, Corcept announced that is has reached a Special Protocol
Assessment (SPA) agreement with the FDA for the design of two pivotal Phase
III trials designed to evaluate Corlux for the treatment of the psychotic
features of psychotic major depression (PMD).
* The protocols agreed upon in the SPA are slightly different than our
expectations. We previously anticipated the primary endpoint of the trials to
be > 30% improvement in the Brief Psychiatric Rating Scale Positive Symptom
Subscale (BPRS PSS) at day 7 and day 28. In contrast, the primary endpoint of
the SPA agreed upon is > 50% improvement in BPRS PSS at day 7 and day 56.
While it may initially appear that it is a higher hurdle to achieve and
maintain efficacy through day 56, we believe that the longer evaluation
period will help reduce the placebo effect, which often clouds the true
efficacy of investigational products in clinical trials.
* In addition, patients are precluded from receiving treatment with
antipsychotic medications or electroconvulsive therapy at any time during the
study. In our opinion this decision is wise, and could potentially improve
the likelihood of achieving success.
* The inclusion criteria established of only admitting patients with BPRS PSS >
12 could help increase the likelihood of success. We believe previous
clinical trials may have failed to achieve statistical significance as a
result of enrolling patients with very mild PMD (low BPRS PSS scores at
baseline). Including only "sicker" patients in the study should allow
evaluators to more clearly determine which patients are benefiting from
Corlux. However, these inclusion criteria may result in slower-than-expected
enrollment into the clinical trials.
* We expect Corcept to initiate the first Phase III trial (Corcept 07) in 3Q04
and to initiate the second Phase III trial (Corcept 06) in 4Q04. We believe
it will take approximately 18-24 months to fully enroll the trials.
* Despite what we consider to be the bright prospects of the company, we
believe the lack of near-term milestones makes it difficult to justify
purchasing shares at this time. We reiterate our Hold rating on the shares.
Investment Conclusion
Corcept is developing Corlux for the treatment of the psychotic features of
psychotic major depression (PMD), a disorder that affects approximately three
million people in the U.S. annually and for which there are no FDA-approved
treatments. The FDA has granted Corlux Fast Track status for the treatment of
the psychotic features of PMD. In addition, the FDA has indicated that Corlux
will receive a priority review if no other treatment is approved for PMD at the
time Corcept submits an NDA. Corcept recently completed a special protocol
assessment (SPA) with the FDA and intends to initiate pivotal Phase III
clinical trials in 2H04. In our opinion, PMD is a major unmet medical need. We
estimate that Corlux has the potential to generate revenues of more than $500
million annually. Additionally, Corcept is conducting Phase II clinical trials
to evaluate the tolerability and efficacy of Corlux in improving cognition in
patients with mild-to-moderate Alzheimer's disease.
Despite what we consider to be the bright prospects of the company, we believe
the lack of near-term milestones makes it difficult to justify purchasing
shares at this time. We believe that shares of Corcept are fairly valued.
Maintain Hold rating oon the shares.
Phase III Trial Design
Corcept intends to initiate two randomized, double-blind, placebo-controlled
Phase III clinical trials of Corlux for the treatment of the psychotic symptoms
of PMD. The primary endpoint of the trials is the proportion of patients with >
50% improvement in the Brief Psychiatric Rating Scale Positive Symptom Subscale
(BPRS PSS) at both day 7 and day 56. Patients must have at least mild psychotic
symptoms (BPRS PSS > 12) to enter the studies and will be hospitalized if
clinically necessary. BPRS PSS assessments will also be made at days 14, 28 and
42.
The first trial, Corcept 07, will begin immediately. The trial will enroll up
to 280 patients at approximately 20 sites in the U.S. Patients will be
randomized one-to-one to receive either:
* Corlux 600mg QD po; or
* Placebo.
Patients in the treatment arm will receive 600mg of Corlux once daily for a
period of seven days. All patients are to be off any antidepressant and
antipsychotic medication for at least one week before beginning the seven-day
treatment period. After the seven days of Corlux treatment, all patients will
receive antidepressant therapy through day 56. Treatment with antipsychotic
medications or electroconvulsive therapy will not be allowed at any time during
the study.
The second clinical trial, Corcept 06, will enroll approximately 440 patients
at approximately 30 sites in the U.S. These patients will be randomized evenly
to receive either:
* Corlux 300mg QD po
* Corlux 600mg QD po
* Corlux 1200mg QD po; or
* Placebo.
Patients will receive medication once daily for a period of seven days. The
three dosing levels fulfill the FDA's request to supplement data on a range of
potential doses beyond that provided by the 33-patient dose ranging study
completed in 2001. All patients in the study must be off any antidepressant and
antipsychotic medication for at least one week before the seven-day treatment
period and will receive antidepressant therapy starting on day 1 through day
56. As with Corcept 07, treatment with antipsychotic medications or
electroconvulsive therapy will not be allowed at any time during this study.
Psychiatric Rating Scales
The following rating scales are commonly used to support regulatory approval of
new antipsychotic and antidepressant medications:
* the Brief Psychiatric Rating Scale (BPRS);
* the BPRS Positive Symptom Subscale; and the
* the HAM-D-21.
The BPRS is an 18-item instrument used to assess psychopathology that
incorporates a range of psychiatric symptoms, including anxiety, depression,
guilt, hostility, and a patient's propensity to commit suicide. Each of the 18
symptoms is scored on a numeric scale ranging from one (not present) to seven
(extremely severe). The BPRS Positive Symptom Subscale, in contrast, is based
on four items of the BPRS. It is designed to assess a patient's psychotic
features by measuring the patient's conceptual disorganization, suspiciousness,
hallucinatory behavior, and unusual thought content. Finally, the HAM-D-21 is a
21-item instrument designed to measure the severity of a number of depressive
symptoms such as insomnia, depressed mood, concentration, ability to experience
pleasure, and agitation. Each question has three to five possible responses,
with associated scores ranging from zero to four. The total score is calculated
from all 21 items.
Potential Upcoming Events/Milestones
* IPO Lock-up expiration, October 11, 2004
* Initiate Corcept 07 (Initial Phase III Trial), 3Q04
* Initiate Corcept 06 (Second Phase III Trial), 4Q04
Company Description
Corcept is a pharmaceutical company engaged in the development of drugs for the
treatment of severe psychiatric and neurological diseases. The company's lead
product candidate, Corlux, is scheduled to begin Phase III clinical trials in
2H04 and has been granted Fast Track status by the FDA for the treatment of the
psychotic features of psychotic major depression, a disorder that affects
approximately three million people each year in the U.S. Corcept also has
initiated a clinical study to evaluate the tolerability and efficacy of Corlux
in improving cognition in patients with mild-to-moderate Alzheimer's disease.
I, Edward Nash, certify that the views expressed in this research report |
