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`10-K 1 cort-10k_20161231.htm 10-K
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`
`UNITED STATES
`SECURITIES AND EXCHANGE COMMISSION
`Washington, D.C. 20549
`FORM 10-K
`☒☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
`1934
`
` 
`
` 
`
`For the fiscal year ended December 31, 2016
`or
`☐☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
`OF 1934
`
`For the transition period from to
`Commission File Number: 000-50679
`
`CORCEPT THERAPEUTICS INCORPORATED
`
` 
`
`(Exact Name of Corporation as Specified in Its Charter)
`
` 
`
`77-0487658
`(I.R.S. Employer Identification No.)
`
`Delaware
`(State or other jurisdiction of incorporation or organization)
`149 Commonwealth Drive
`Menlo Park, CA 94025
`(Address of principal executive offices) (zip code)
`(650) 327-3270
`(Registrant’s telephone number, including area code)
`Securities registered pursuant to Section 12 (b) of the Act:
`Name of Each Exchange on which Registered:
`Title of Each Class:
`The NASDAQ Capital Market
`Common Stock, $0.001 par value
`Securities registered pursuant to Section 12 (g) of the Act:
`None
`
` 
`
` 
`
`Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ☒
`Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15 (d) of the Act. Yes ☐ No ☒
`Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
`1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing
`requirements for the past 90 days. Yes ☒ No ☐
`Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File
`required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was
`required to submit and post such files). Yes ☒ No ☐
`Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to
`the best of the Registrant’s knowledge, in definitive proxy or information statements incorporated by reference to Part III of this Form 10-K or any amendment
`to this Form 10-K. ☐
`Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company.
`See the definitions of “large accelerated filer”, “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
`☐    
`Large accelerated filer
`Accelerated filer
`☐   (Do not check if a smaller reporting company)
`Non-accelerated filer
`Smaller reporting company
`Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
`The aggregate market value of voting and non-voting common equity held by non-affiliates of the Registrant was $427,665,971 as of June 30, 2016
`based upon the closing price on the NASDAQ Capital Market reported for such date. This calculation does not reflect a determination that certain persons are
`affiliates of the Registrant for any other purpose.
`On February 28, 2017 there were 112,942,391 shares of common stock outstanding at a par value of $0.001 per share.
`DOCUMENTS INCORPORATED BY REFERENCE
`Portions of the Registrant’s definitive proxy statement for its 2016 Annual Meeting of Stockholders are incorporated by reference in Items 10, 11, 12,
`13 and 14 of Part III.
` 
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`TABLE OF CONTENTS
`
`Form 10-K
`For the year ended December 31, 2016
`
` 
`
` 
` 
` 
`
`PART I
` 
`
`PART IV
` 
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` 
` 
`Business
`ITEM 1.
` 
` 
` 
`ITEM 1A. Risk Factors
` 
` 
` 
`ITEM 1B. Unresolved Staff Comments
` 
` 
` 
`ITEM 2.
`Properties
` 
` 
`ITEM 3.
`Legal Proceedings
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` 
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`ITEM 4. Mine Safety Disclosures
` 
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` 
` 
`PART II
` 
` 
` 
`ITEM 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity
`Securities
` 
` 
`Selected Financial Data
`ITEM 6.
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`ITEM 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
` 
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`ITEM 7A. Quantitative and Qualitative Disclosures About Market Risk
` 
` 
` 
`ITEM 8.
`Financial Statements and Supplementary Data
` 
` 
`ITEM 9.
`Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
` 
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`ITEM 9A. Controls and Procedures
` 
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`ITEM 9B. Other Information
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`PART III
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` 
` 
`ITEM 10. Directors, Executive Officers and Corporate Governance
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`ITEM 11. Executive Compensation
` 
` 
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`ITEM 12.
`Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
` 
` 
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`ITEM 13. Certain Relationships and Related Transactions, and Director Independence
` 
` 
` 
`ITEM 14.
`Principal Accounting Fees and Services
` 
` 
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`ITEM 15. Exhibits, Financial Statement Schedules
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`Signatures and Power of Attorney
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`PART I
`
`This Annual Report on Form 10-K (Form 10-K) contains forward-looking statements within the meaning of Section 21E
`of the Securities Exchange Act of 1934, as amended (Exchange Act), and Section 27A of the Securities Act of 1933, as
`amended (Securities Act). All statements contained in this Form 10-K, other than statements of historical fact, are forward-
`looking statements. When used in this report or elsewhere by management, the words “believe,” “anticipate,” “intend,”
`“plan,” “estimate,” “expect,” “may,” “will,” “should, “would,” “could,” “seek” and similar expressions are forward-
`looking statements. Such forward-looking statements are based on current expectations. The absence of these words does not
`mean that a statement is not forward-looking. Forward-looking statements made in this Form 10-K include, but are not limited
`to, statements about:
`our ability to manufacture, market and sell Korlym® (mifepristone) 300 mg Tablets;
`•
`our estimates regarding enrollment in and the completion dates of our clinical trials and the anticipated results of
`•
`these trials;
`the progress and timing of our research and development programs and the regulatory activities associated with
`them;
`our ability to realize the benefits of Orphan Drug designation for Korlym in the United States;
`our estimates for future performance, including revenue and profits;
`the timing of the market introduction of future product candidates, including new uses for Korlym and any
`compound in our families of selective cortisol modulators;
`our ability to manufacture, market, commercialize and achieve market acceptance for our future product
`candidates;
`uncertainties associated with obtaining and enforcing patents; and
`estimates regarding our capital requirements.
`
`•
`
`•
`•
`•
`
`•
`
`•
`•
`
`Forward-looking statements are not guarantees of future performance. They involve risks and uncertainties. Actual
`events or results may differ materially from those discussed in the forward-looking statements for many reasons. For a more
`detailed discussion of the risks and uncertainties that may affect the accuracy of our forward-looking statements, see the “Risk
`Factors,” “Overview” and “Liquidity and Capital Resources” sections of the “Management’s Discussion and Analysis of
`Financial Condition and Results of Operations” section of this Form 10-K. Forward-looking statements reflect our view only
`as of the date of this report. Except as required by law, we undertake no obligation to update any forward-looking statement.
`You should carefully consider the other reports and documents that we file with the Securities and Exchange Commission
`(SEC).
`
`Unless stated otherwise, all references in this document to “we,” “us,” “our,” “Corcept,” the “Company,” “our
`company” and similar designations refer to Corcept Therapeutics Incorporated.
`
`ITEM 1. BUSINESS
`
`Overview
`
`We are a pharmaceutical company engaged in the discovery, development and commercialization of drugs that treat
`severe metabolic, oncologic and psychiatric disorders by modulating the effects of cortisol. Elevated levels and abnormal
`release patterns of cortisol are implicated in a broad range of human disorders. Since our inception in 1998, we have been
`developing mifepristone, a compound that modulates the effects of cortisol by acting as a competitive antagonist at the
`glucocorticoid receptor (GR). We have also discovered three structurally distinct series of proprietary, selective cortisol
`modulators, all of which share mifepristone’s affinity for GR but, unlike mifepristone, do not bind to the progesterone receptor
`and so do not cause effects associated with progesterone receptor affinity. Development of the lead compounds from these
`series is in progress.
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`In 2012, the United States Food and Drug Administration (FDA) approved Korlym® (mifepristone) 300 mg Tablets as a
`once-daily oral medication for the treatment of hyperglycemia secondary to hypercortisolism in adult patients with endogenous
`Cushing syndrome who have type 2 diabetes mellitus or glucose intolerance and have failed surgery or are not candidates for
`surgery.
`
`We are conducting two clinical trials of our proprietary selective cortisol modulator, CORT125134. One trial is
`investigating CORT125134 as a potential treatment for patients with Cushing syndrome. The second trial is investigating the
`combination of CORT125134 and nab-paclitaxel (Celgene Corporation’s Abraxane®) to treat patients with solid-tumor
`cancers. These trials are enrolling patients.
`
`We plan to begin clinical trials of two other selective cortisol modulators in 2017.
`
`The Role of Cortisol in Disease
`
`Cortisol is a steroid hormone that plays a significant role in the way the body reacts to stressful conditions. It influences
`metabolism and the immune system and contributes to emotional stability. It is essential for survival. Insufficient cortisol
`activity may lead to dehydration, hypotension, shock, fatigue, low resistance to infection, trauma, stress and hypoglycemia.
`Excessive cortisol activity may lead to a suppressed immune response, impaired glucose tolerance, diabetes, obesity, fatty liver
`disease, depressed mood, psychosis, wasting of the arms and legs, edema, fatigue, hypertension and other problems. Pre-
`clinical and clinical data suggest that cortisol may reduce a patient’s immune response to oncogenesis and shield certain cancer
`cells from the apoptotic effects of chemotherapy.
`
`The challenge in regulating excessive levels of cortisol is that destroying the ability of the body to make cortisol can
`cause serious harm. An effective medication must modulate cortisol’s effects without suppressing them below normal levels or
`disrupting the body’s normal cortisol rhythm, in which cortisol levels rise at awakening and decrease during the day. The
`action of cortisol can effectively be modulated by the use of compounds that compete with cortisol as it attempts to bind to GR.
`Mifepristone, the active ingredient in Korlym, is a competitive GR antagonist, as are Corcept’s proprietary compounds.
`
`Because mifepristone works by reducing the binding of excess cortisol to GR, it can modulate the effects of abnormal
`levels and release patterns of cortisol without compromising cortisol’s necessary, normal functions and rhythms. However,
`mifepristone also binds to the progesterone receptor and thereby terminates pregnancy and sometimes causes other side effects,
`including irregular vaginal bleeding. Our selective cortisol modulators block GR as potently as mifepristone does, but have no
`affinity for the progesterone receptor and so do not cause progesterone receptor-related side effects.
`
`Cushing Syndrome
`
`Background. Cushing syndrome is caused by prolonged exposure of the body’s tissues to high levels of cortisol. It is
`relatively uncommon and most often affects adults aged 20 to 50. An estimated 10 to 15 of every one million people are newly
`diagnosed with this syndrome each year, resulting in approximately 3,000 new patients and an estimated total of 20,000
`patients with Cushing syndrome in the United States.
`
`Symptoms vary, but most people with Cushing syndrome have one or more of the following manifestations: high blood
`sugar, diabetes, high blood pressure, upper body obesity, rounded face, increased fat around the neck, thinning arms and legs,
`severe fatigue and weak muscles. Irritability, anxiety, cognitive disturbances and depression are also common. Cushing
`syndrome can affect every organ system in the body and can be lethal if not treated. The preferred treatment for Cushing
`syndrome patients is surgery, which, if successful, can cure the disease. Depending on the type of tumor, surgery can result in a
`range of complications and has varying rates of success. In approximately half of the patients, surgery is not successful because
`the tumor cannot be located or removed completely.
`
`Korlym to Treat Patients with Cushing Syndrome. We have received Orphan Drug designation from the FDA for
`Korlym in the treatment of patients with endogenous Cushing syndrome. Drugs that receive Orphan Drug
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`designation receive seven years of marketing exclusivity for the approved indication, as well as tax credits for clinical trial
`costs, marketing application filing fee waivers and assistance from the FDA in the drug development process.
`
`We first made Korlym available to patients on a commercial basis in April 2012. We sell Korlym using experienced
`sales representatives, who target U.S. endocrinologists who care for a large portion of the patients with Cushing syndrome. In
`addition, we have a field-based force of medical science liaisons. We also reach patients directly through web-based initiatives
`and interactions with patient groups. Because a large percentage of the people who suffer from Cushing syndrome remain
`undiagnosed or are inadequately treated, we have developed and continue to refine and expand programs to educate the
`medical community and patients about diagnosis of this syndrome and to increase awareness regarding the role of cortisol
`modulators to treat the disease.
`
`We use a specialty pharmacy and a specialty distributor to distribute Korlym and provide logistical support. We have
`retained a vendor to help patients with the reimbursement process and to administer our financial assistance programs for
`uninsured or under-insured patients. We also donate money to independent charitable foundations. These organizations, along
`with our own programs, help us ensure that no Cushing syndrome patient is denied access to Korlym for financial reasons.
`
`CORT125134 to Treat Patients with Cushing Syndrome. We are enrolling patients in a Phase 2 trial of our proprietary,
`selective cortisol modulator, CORT125134, to treat patients with Cushing syndrome. CORT125134 shares Korlym’s affinity
`for GR. Data from the compound’s Phase 1 trial showed that it potently modulates the effects of the steroid prednisone, a
`commonly-used GR agonist. Modulating the effect of prednisone is important because it is a strong surrogate for Korlym’s
`modulation of cortisol – the essential quality of an effective treatment for patients with Cushing syndrome. Pharmacokinetic
`data indicate that CORT125134 is suitable for once-daily oral dosing. We expect to have data from this trial by the end of
`2017.
`
`FKBP5 Gene Expression. We are developing a CLIA-validated assay to measure expression of the gene FKBP5, which
`is stimulated by cortisol activity at GR. Our hypothesis is that FKBP5 expression increases in patients with Cushing syndrome
`and falls as their disease is treated. If our hypothesis is correct, our assay would allow physicians to measure the degree to
`which their patients suffer from excess cortisol activity – the cause of Cushing syndrome – which would help them more easily
`identify patients with the disease and better treat those already in their care.
`
`Oncology
`
`There is substantial in vitro, in vivo and clinical evidence that cortisol’s activity allows certain solid-tumor cancers to
`resist treatment. In some cancers, cortisol activity promotes tumor growth. Cortisol also stimulates genes that retard cellular
`apoptosis.
`
`Our oncology development program also seeks to exploit a second mechanism. Cortisol suppresses the body's immune
`response. Suppression of the immune response is often beneficial, as it lessens the frequency of autoimmune diseases.
`However, activating, not suppressing, the body's immune system is beneficial in fighting certain cancers. Our hypothesis is that
`adding a cortisol modulator to a treatment regimen will help the patient’s immune system combat the disease.
`
`A range of tumor-types express GR and are potential targets for cortisol modulation therapy, among them triple-negative
`breast, ovarian, castration-resistant prostate, cervical and pancreatic cancer, as well as sarcoma and melanoma.
`
`Korlym to Treat Patients with Solid-Tumor Cancers. In December 2016, we announced the results of our Phase 1/2 trial
`of Korlym in combination with eribulin (Eisai’s Inc.’s drug, Halaven®) to treat patients with metastatic triple-negative breast
`cancer. The trial studied 21 patients with GR positive tumors, one with GR negative tumors and one with tumors whose GR
`status was not known. As determined using the Response Evaluation Criteria in Solid Tumors (RECIST), efficacy results were
`as follows: four patients exhibited a partial response, defined as a 30 percent or greater reduction in tumor size; eight had stable
`disease; and 11 had progressive
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`disease. Six patients achieved progression-free survival (PFS) longer than the upper bound of the 95% confidence interval for
`PFS (15 weeks) in patients receiving Halaven® monotherapy in a comparable population (Aogi et al., Annals of Oncology 23:
`1441-1448, 2012). Median PFS in the trial was 11.1 weeks – compared to 7.2 weeks in the Halaven monotherapy study
`reported by Aogi. We believe that the addition of Korlym to chemotherapy warrants further study, such as the double-blind,
`placebo-controlled, multicenter, University of Chicago-led trial described above that Celgene is funding.
`
`Korlym to Treat Patients with Triple-Negative Breast Cancer and Castration-Resistant Prostate Cancer. Investigators
`at the University of Chicago have initiated a double-blind, placebo-controlled, multicenter Phase 2 study of Korlym in
`combination with Celgene’s drug Abraxane to treat 64 patients with advanced, GR-positive triple-negative breast cancer.
`Celgene is funding the trial. We are providing Korlym. University of Chicago investigators are also leading a controlled,
`multicenter Phase 2 study of Korlym combined with the androgen deprivation agent enzalutamide (Astellas Pharma Inc.’s
`drug, Xtandi®) versus Xtandi monotherapy to treat 84 patients with metastatic, castration-resistant prostate cancer. The
`investigators’ hypothesis is that adding cortisol modulation to androgen deprivation therapy will better suppress tumor growth.
`The Department of Defense and the Prostate Cancer Foundation are funding the trial. Astellas is providing Xtandi. We are
`providing Korlym.
`
`We have exclusively licensed patents from the University of Chicago covering the use of cortisol modulators in
`combination with anti-cancer agents to treat triple-negative breast cancer and with androgen deprivation agents to treat
`castration-resistant prostate cancer.
`
`CORT125134 to Treat Patients with Solid-Tumor Cancers. We are conducting a Phase 1/2 trial of Abraxane (nab-
`paclitaxel) in combination with CORT125134 to treat any solid-tumor cancer suitable for treatment with Abraxane. Once we
`identify a recommended dose of this combination, we will open 20-patient cohorts to test the combination’s efficacy in one or
`more solid-tumor cancers. Our likely initial targets will be triple-negative breast cancer and ovarian cancer. Other possible
`indications include pancreatic cancer, cervical cancer and sarcoma. We may choose to open additional dose-finding cohorts to
`study CORT125134 in combination with different companion therapeutic agents, including immunotherapy, to treat other
`solid-tumor cancers.
`
`Development of Our Other Selective Cortisol Modulators
`
`CORT125134 is the lead compound in our portfolio of proprietary selective cortisol modulators, which consists of three
`structurally distinct series. All of these compounds, like Korlym, potently block GR but do not block the progesterone,
`estrogen or androgen receptors. In addition to our findings with CORT125134, several of our new compounds have
`demonstrated positive results in animal or in vitro models that test cortisol modulation. We are advancing the most promising
`of these compounds towards the clinic and expect to begin clinical trials of CORT118335 and CORT125281 in 2017.
`CORT118335 is a potential medication for fatty-liver disease, anti-psychotic-induced weight gain and other metabolic
`disorders. CORT125281 is a candidate for the treatment of castration-resistant prostate cancer (in combination with an
`androgen-deprivation agent such as Xtandi) and other indications.
`
`The United States Patent & Trademark Office (USPTO) and the European Patent Office (EPO) have issued to us
`composition of matter patents related to our selective cortisol modulators. In addition, we own or have exclusively licensed
`patents for the use of all cortisol modulators (including Korlym) in a broad range of disorders. See “Business – Intellectual
`Property.”
`
`We intend to continue our discovery research program with the goal of identifying new selective cortisol modulators, to
`manufacture and conduct pre-clinical development of one or more of these compounds and to study the most promising of
`them in humans.
`
`Studies by Independent Investigators
`
`We have, for many years, sought to advance our understanding of cortisol modulation’s therapeutic potential by
`supporting the work of independent academic investigators. These researchers have studied the utility of our proprietary
`selective cortisol modulators in pre-clinical studies in a wide range of disorders, including post-traumatic
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`stress disorder, alcoholism, Alzheimer’s disease, ALS, muscular dystrophy, Cushing syndrome, metabolic syndrome, fatty liver
`disease, ovarian cancer, castration-resistant prostate cancer and triple-negative breast cancer.
`
`Clinical Trial Agreements
`
`Some of our clinical trials are conducted through the use of clinical research organizations (CROs). Our Phase 2 trial of
`CORT125134 for the treatment of patients with Cushing syndrome is being conducted under an agreement with Chiltern
`International Limited (Chiltern). This agreement may be terminated by us upon 60-days written notice to Chiltern or sooner if
`the parties mutually agree.
`
`Research and Development Spending
`
`We incurred $23.8 million, $15.4 million and $18.4 million of research and development expenses in the years ended
`December 31, 2016, 2015 and 2014, which accounted for 33%, 29% and 34%, respectively of our total operating expenses in
`those years.
`
`Manufacturing Korlym
`
`We do not have manufacturing capabilities and intend to continue to rely on experienced contract manufacturers to
`produce Korlym and our product candidates. We have a long-term agreement with one contract manufacturer, Produits
`Chimiques Auxiliaires et de Synthese SA (PCAS), to produce mifepristone, the active pharmaceutical ingredient (API) for
`Korlym, pursuant to which we agree to purchase a minimum percentage of our mifepristone requirements. The initial term of
`the agreement is five years, with an automatic extension of one year, unless either party gives 12-months prior written
`termination notice. We have the right to terminate the agreement if PCAS is unable to manufacture mifepristone for nine
`consecutive months.
`
`We have one tablet manufacturer for Korlym – Alcami Corporation (formerly known as AAI Pharma Services Corp., or
`AAI). In April 2014, we entered into an agreement with Alcami for the manufacture and packaging of Korlym tablets. The
`initial term of this agreement is three years, with consecutive automatic extensions of two years, unless either party gives
`written termination notice (in the case of Alcami, 18 months prior to the end of the applicable term; in our case, 12 months
`prior to the end of the applicable term). We have the right to terminate the agreement if (i) Alcami is unable to manufacture our
`product for four consecutive months or (ii) our product is withdrawn from the market. We have no minimum purchase
`obligations under this agreement.
`
`Competition for Korlym
`
`Korlym competes with established treatments, including surgery, radiation and other medications, including “off-label”
`uses of drugs such as ketoconazole, an anti-fungal medication. Korlym also competes with Novartis’ drug, Signifor®
`(pasireotide) Injection, which the FDA approved in December 2012 for the treatment of adult patients with Cushing disease
`who are not candidates for pituitary surgery or for whom surgery did not work. (Cushing disease is a subset of Cushing
`syndrome that afflicts approximately 70 percent of patients with Cushing syndrome.)
`
`Korlym may also experience competition from compounds under development for Cushing syndrome. For example,
`Strongbridge Biopharma plc has received Orphan Drug designation in the United States and the EU for the use of
`levoketoconazole, a chiral form of ketoconazole, to treat Cushing syndrome and has begun a Phase 3 clinical trial in Europe
`and the United States for this indication.
`
`Intellectual Property
`
`Patents and other proprietary rights are important to our business. It is our policy to seek patent protection for our
`inventions and to rely upon trade secrets, know-how, continuing technological innovations and licensing opportunities to
`develop and maintain our competitive position.
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`Mifepristone. The composition of matter patent covering mifepristone has expired. The only other FDA-approved use of
`mifepristone is to terminate pregnancy. The FDA has imposed significant restrictions on the use of mifepristone to terminate
`pregnancy. To protect our market for Korlym we plan to rely on (1) the exclusive marketing rights conferred as a benefit of
`Orphan Drug designation in the United States, (2) the restrictions imposed by the FDA on the use of mifepristone to terminate
`pregnancy, (3) the different patient populations, administering physicians and treatment settings between the use of
`mifepristone to terminate pregnancy and to treat Cushing syndrome and (4) our method of use patents described below.
`
`Oncology. We have an exclusive license agreement with the University of Chicago to patents covering the use of all
`cortisol modulators, including mifepristone, in the treatment of triple-negative breast cancer (in combination with anti-cancer
`agents) and castration-resistant prostate cancer (in combination with androgen deprivation agents). See “Business – License
`Agreements.”
`
`Other Method of Use Patents. We own issued U.S. patents for the use of cortisol modulators in the treatment of mild
`cognitive impairment, the prevention and treatment of stress disorders, improving the therapeutic response to electroconvulsive
`therapy, the treatment of delirium, the treatment of catatonia, the treatment of psychosis with Interferon-Alpha therapy,
`inhibiting cognitive deterioration in adults with Down’s Syndrome, the treatment of weight gain following treatment with
`antipsychotic medication, the treatment of gastroesophageal reflux disease, the treatment of migraine headaches, the treatment
`of neurological damage in premature infants, and the treatment of diseases using combination steroid and GR antagonist
`therapy. We also own a method of use patent for optimizing mifepristone levels in plasma serum in patients suffering from
`mental disorders, including the mental disorders seen in Cushing syndrome. The expiration dates of these patents and their
`foreign counterparts range from 2020 to 2034.
`
`In addition, we have six U.S. method-of-use applications covering certain cortisol modulators, including the treatment
`of patients suffering from mental disorders by optimizing mifepristone absorption, and the treatment of patients suffering from
`muscular dystrophy and from ALS.
`
`We estimate that the expiration dates of the patents that could issue from these applications and their foreign
`counterparts range from 2029 to 2036.
`
`Composition of Matter Patents Covering Our Proprietary, Selective Cortisol Modulators. We have eight U.S.
`composition of matter patents containing claims relating to three structurally distinct series of next-generation cortisol
`modulators. Four of these patents have issued in Europe, with an additional U.S. application pending. The expiration dates of
`these patents and their foreign counterparts range from 2026 to 2033.
`
`We have also filed, where we deemed appropriate, foreign patent applications corresponding to our U.S. patents and
`applications. We cannot assure you that any of our patent applications will result in the issuance of patents, that any issued
`patent will include claims of the breadth sought in these applications, or that competitors or other third-parties will not
`successfully challenge or circumvent our patents if they are issued.
`
`We believe that our patents are valid and that we do not currently infringe any third-party’s patents or other proprietary
`rights, and we are not obligated to pay royalties relating to the use of intellectual property to any third-party other than
`Stanford University and the University of Chicago.
`
`License Agreements
`
`We have exclusively licensed three issued U.S. patents from Stanford University for the use of cortisol modulators,
`including mifepristone, in the treatment of psychotic depression, cocaine-induced psychosis and early dementia, including
`early Alzheimer’s disease. We are required to make milestone payments and pay royalties to Stanford University on sales of
`products commercialized under these patents. Milestone payments are creditable against future royalties. Our license will end
`upon expiration of the related patents in 2018 and 2019 or upon notification by us to Stanford.
`
`We have also exclusively licensed from the University of Chicago two issued U.S. patents for the use of cortisol
`modulators in the treatment of triple-negative breast cancer, and a second patent family consisting of an
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`cort-10k_20161231.htm
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`https://www.sec.gov/Archives/edgar/data/1088856/0001564590170...
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`issued U.S. patent and applications in Europe having claims directed to the use of cortisol modulators to treat castration-
`resistant prostate cancer. We are required to pay the University of Chicago customary milestone fees and royalties on revenue
`from products commercialized under the issued patents or patents that may issue pursuant to the pending applications. Our
`license will end upon expiration of the related patents in 2031 and 2033 or upon notification by us to the University of
`Chicago.
`
`Government Regulation
`
`Prescription pharmaceutical products are subject to extensive pre- and post-approval regulation, including regulations
`that govern the testing, manufacturing, safety, efficacy, labeling, storage, record keeping, advertising, and promotion of the
`products under the Federal Food, Drug and Cosmetic Act. All of our product candidates require regulato