Senior Staff Writer

Corcept Therapeutics Inc.'s antipsychotic drug, Corlux, failed in its first Phase III trial, devastating the company's stock, which lost more than half of its value.

Shares (NASDAQ:CORT) plummeted 56 percent, or $1.96 Friday, to end the day at $1.54.

While the Menlo Park, Calif.-based company still has coming data from two other Phase III trials - which, if successful, could support a new drug application filing on their own - the drug response rate in the first study (Study 07) was similar to those receiving placebo.

"There was very little difference" between the drug and placebo groups, said Joseph Belanoff, Corcept's CEO, in a conference call. "Obviously, we're very disappointed with the results of this negative study and are just now beginning to look into all the details of the underlying results."

The primary endpoint of 07 was the proportion of patients who had at least a 50 percent improvement in the Brief Psychiatric Rating Scale Positive Symptom Subscale (BPRS PSS) at both day seven and day 56. Patients received only Corlux or placebo for the first seven days and then standard antidepressant therapy for the following seven weeks. A total of 30.5 percent of Corlux-treated patients were responders at both day seven and day 56, compared with 28.6 percent of placebo-treated patients (p=0.762).

"One of the things, which really was very striking," Belanoff said, "was that by the end of the study virtually all of the patients in both groups had actually become responders."

Data at day 56 showed that about 80 percent of patients in both arms of the study were responders. Belanoff said he would have expected the non-Corlux group to have a response rate of between 30 percent to 40 percent, the "highest that I've actually seen" for antidepressants. "So to our knowledge, this really is an unprecedented high placebo response rate."

The company is poring through the data to try to find out why Study 07 did not confirm results from Study 03, the Phase II trial from which the Phase III studies were designed and one that showed a "very robust difference" between drug and placebo, Belanoff said.

The only difference he noted between 03 and 07 is that in the first study "all of the patients were hospitalized at the beginning of the study," he said. "In this study, virtually all of the patients were outpatients from the get-go."

The BPRS PSS is an 18-item rating instrument used to assess psychopathology and a subset of four items that specifically measure psychosis. Corlux is being studied to treat the psychotic features of psychotic major depression, a condition characterized by severe depression accompanied by delusions, hallucinations or both. PMD affects about 3 million people in the U.S.

"This is an episodic disease, as opposed to a chronic disease," said Fred Kurland, Corcept's chief financial officer. Episodes can last between six and 18 months, and "the suicide rate is very high at 70 times that of the healthy population."

There is no FDA-approved treatment.

In August 2004, Corcept agreed with the FDA on a special protocol assessment for two pivotal Phase III trials of Corlux. (See BioWorld Today, Aug. 31, 2004.)

Study 07 enrolled 258 patients who received 600 mg of oral Corlux or placebo once daily for seven days, followed by the antidepressant therapy. The second trial, Study 06, begun in October 2004, is enrolling about 440 patients who will receive 300 mg, 600 mg or 1,200 mg of Corlux or a placebo once daily for seven days, and antidepressant therapy from day one through day 56.

Neither study permitted treatment with antipsychotic medications or electroconvulsive therapy.

In May 2005, Corcept initiated a third Phase III trial of Corlux, known as Study 09. The company's first European study, it completed enrollment of 247 patients in late May. Patients are receiving either 600 mg of Corlux or placebo once daily for seven days, along with antidepressant therapy from day one through day 56. The primary endpoint is a 50 percent improvement in BPRS PSS at day seven and day 28, while a secondary endpoint is an improvement at day seven and day 56 - the primary objective in the first two pivotal trials.

Belanoff said Study 09's results should be available in September, while the 06 study, which is still enrolling patients, "will have results at the end of the year."

If both of those studies are positive, the company intends to file a new drug application for Corlux sometime in 2007. The FDA recently asked the company to do "a few supportive studies" for that filing, Kurland told BioWorld Today, "such as drug-drug interaction studies and a dose-proportionality study." Corlux has fast-track designation.

In four previous studies, Corlux has shown positive results. A dose-finding trial demonstrated that two-thirds of patients in the two higher dosage groups experienced clinically meaningful reductions in psychosis. That trial led to Study 02 and Study 03, double-blind, placebo-controlled safety and efficacy trials that enrolled 429 patients. Study 02 showed that Corlux was well tolerated and had no drug interactions, while the 03 study showed a statistically significant difference between the Corlux and placebo groups. A fourth trial indicated patients could tolerate retreatment with the drug; 28 of those from the 02 and 03 studies who experienced a favorable drug response participated.

Corlux, a GR-II antagonist, appears to reduce the effects of the elevated and abnormal release patters of cortisol seen in PMD. It also is being studied in a proof-of-concept trial to evaluate its ability in mitigating weight gain associated with the use of Indianapolis-based Eli Lilly and Co.'s olanzapine. Results are expected in the first quarter.

Corcept licensed Corlux (mifepristone) from Stanford University, and the drug has method-of-use patent protection for the PMD indication through 2018.

As of June 30, the company had $17.5 million in cash and cash equivalents - enough money to take into 2007 and through the conclusion of the 06 and 09 studies, Kurland said.