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Msg  2968 of 3002  at  2/10/2020 5:06:10 PM  by

BSR_Alan

The following message was updated on 2/10/2020 11:28:06 PM.

 In response to msg 2963 by  pastemp
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Re: Phase 1 Neurological Trial

Did anyone really see the Cushing's market being this large? Remember when the initial market estimates were tiny? It was just enough to keep tiny Corcept alive after the wreckage of the earlier failed trials.

...and
first the large city medical centers were a disappointment for sales. It was ugly. Second, the company then pursued the community clinics. Cushing's patients were distributed in a way that wasn't often seen.for a serious rare disease. ThirdI remember when some were laughing when I posted a $50 to $60M obtainable market size, that I had overshot. 
 
Remember when we had straight quarters of single digit million dollar sales? (Hey Alan, you're crazy if you think it will even reach $20M!). 

With a small market, Corcept isn't going to invest in an expensive patent portfolio. It's just not going to attract large competitors. 
 
Also, I think the use of the independent investigators was a deliberate strategy and takes into account more than avoiding dilution.
 
1) The university strategy assumes greater failure rates. Belanoff once remarked on a conference call that more clinical trial failure had been expected. 

2) Cancer trials have scary odds. Let's face it, the whole cancer program was a surprise. Most of us were in apoplexy when Corcept announced it was going into cancer. I marched into Corcept's HQ and essentially said "Cancer? Really?" 
 
I was surprised that the ovarian and pancreatic trials both came with positive signals.Actually "shock: is a better word. The focus went to those indications rather than others. I still fully expect  the cancer trials to experience hiccups. It's simple blackjack. :-}
 
3) The board and dilution is...complicated? A couple years ago, one of our investor village message board members went to the annual meeting. He addressed the board and asked to bring the trials in-house and accelerate the platform.  There were actually a few board members reportedly nodding sympathetic agreement. 
 
4) I would have liked to have seen Relacorilant hit clinical trials earlier - Yeah I agree with this sentiment. Nevertheless, it was a difficult call. There were key questions to answer.

Is Korlym enough (it wasn't)? When did Corcept have enough cash to push relacorilant hard? What obstacles were there?

I remember one thing: relacorilant was supposed behave just like mifepristone without its progesterone blocking problems. It didn't. Luckily...it behaves better. I don't know what was occurring behind the scenes, but yes, I wanted relacorilant to be 1 to 2 years ahead of this schedule. This is the provocative gripe. 
 
5) Patents? Recalling the history, I don't think earlier expenditures in the Cushing's portfolio made sense. Now it does. One of our local biotech patent attorneys examined the Corcept IP and said: it has a portfolio normally seen in companies 10x larger. 
 
6) Corcept is 2/3 biotech and 1/3 blue chip. The CEO has spoken on the call about its old-fashioned approach of patiently growing with your revenues. I have another take. My old math professor was also a top notch poker player. He played the probabilities and said to bluff very infrequently, just enough to keep everyone on their toes. Somehow, I believe Corcept's CEO must be a card player. He is playing the odds.
 
If it turns out that the clinical trials are mostly successful, then we'll argue he did it wrong. Right now, it's a toss-up. PTSD was not successful enough to pursue, while Cancer is a surprise. This is about the expected failure rates.
 
7) ALS and Alzheimer's? Even if it takes a long time to market, if there's promise, then it impacts valuation - even from Phase 2 trial results. BTW, it looks possible that CORT113176 exerts short-term improvements on ALS. If so, this begins to validate the entire platform. Right now, observers are just like we were: Cancer? Diabetes? AIWG? Cushing's? Neurological? Really? But the perception changes after a two or three more good results...even if mixed with failure. We need to increase the pipeline...for failure will come.  


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Msg # Subject Author Recs Date Posted
2969 Re: Phase 1 Neurological Trial rufustoehee 3 2/10/2020 6:40:20 PM






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