Corcept Therapeutics
Annual Report 2014

Plain-text annual report

Table of Contents UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, 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, 2014or ☐ 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)________________________________________________________________________________________________________________________________________ Delaware 77-0487658(State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.) 149 Commonwealth DriveMenlo 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: Title of Each Class: Name of Each Exchange on which Registered:Common Stock, $0.001 par value The NASDAQ Capital Market Securities registered pursuant to Section 12 (g) of the Act: NoneIndicate 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 1934during 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 filingrequirements 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 requiredto 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 tosubmit 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 thebest 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 thisForm 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 thedefinitions of “large accelerated filer”, “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. Large accelerated filer ☐Accelerated filer ☒Non-accelerated filer ☐ (Do not check if a smaller reporting company)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 $184,675,000 as of June 30, 2014 basedupon the closing price on the NASDAQ Capital Market reported for such date. This calculation does not reflect a determination that certain persons are affiliates ofthe Registrant for any other purpose.On March 2, 2015 there were 101,405,250 shares of common stock outstanding at a par value of $0.001 per share.DOCUMENTS INCORPORATED BY REFERENCEPortions of the Registrant’s definitive proxy statement for its 2015 Annual Meeting of Stockholders are incorporated by reference in Items 10, 11, 12, 13and 14 of Part III. Table of Contents TABLE OF CONTENTSForm 10-KFor the year ended December 31, 2014 PagePART IITEM 1. Business2 ITEM 1A. Risk Factors13 ITEM 1B. Unresolved Staff Comments30 ITEM 2. Properties30 ITEM 3. Legal Proceedings30 ITEM 4. Mine Safety Disclosures30 PART IIITEM 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities31 ITEM 6. Selected Financial Data 33 ITEM 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations34 ITEM 7A. Quantitative and Qualitative Disclosures About Market Risk44 ITEM 8. Financial Statements and Supplementary Data44 ITEM 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure44 ITEM 9A. Controls and Procedures44 ITEM 9B. Other Information45 PART IIIITEM 10. Directors, Executive Officers and Corporate Governance46 ITEM 11. Executive Compensation46 ITEM 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters46 ITEM 13. Certain Relationships and Related Transactions, and Director Independence46 ITEM 14. Principal Accounting Fees and Services46 PART IVITEM 15. Exhibits, Financial Statement Schedules47 Signatures and Power of Attorney50 Table of Contents PART I This Annual Report on Form 10-K (Form 10-K) contains forward-looking statements within the meaning of Section 21E of theSecurities Exchange Act of 1934, as amended (Exchange Act), and Section 27A of the Securities Act of 1933, as amended (SecuritiesAct). All statements contained in this Form 10-K, other than statements of historical fact, are forward-looking statements. When used inthis report or elsewhere by management from time to time, the words “believe,” “anticipate,” “intend,” “plan,” “estimate,” “expect,”“may,” “will,” “should,” “seek” and similar expressions are forward-looking statements. Such forward-looking statements are based oncurrent expectations, but the absence of these words does not necessarily mean that a statement is not forward-looking. Forward-lookingstatements 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 dates by which we expect to report results of our clinical trials and theanticipated results of these trials;·the progress and timing of our research, development and clinical programs and the regulatory activities associated with suchprograms;·our ability to realize the benefits of Orphan Drug designation of 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 mifepristone and any compound inour families of selective glucocorticoid receptor (GR) antagonists;·our ability to achieve marketing approval of mifepristone in the European Union (EU) (for which we have requested the brandname Corluxin) and realize the benefits of Orphan Drug designation there;·our ability to manufacture, market, commercialize and achieve market acceptance for our future product candidates, includingmifepristone for the treatment of triple-negative breast cancer or any other indications and any compounds in our families ofselective GR antagonists;·uncertainties associated with obtaining and enforcing patents; and·our estimates regarding our capital requirements. Forward-looking statements are not guarantees of future performance and involve risks and uncertainties. Actual events or resultsmay differ materially from those discussed in the forward-looking statements as a result of various factors. For a more detailed discussionof such forward-looking statements and the potential risks and uncertainties that may impact upon their accuracy, see the “Risk Factors”section of this Form 10-K and the “Overview” and “Liquidity and Capital Resources” sections of the “Management’s Discussion andAnalysis of Financial Condition and Results of Operations” section of this Form 10-K. These forward-looking statements reflect our viewonly as of the date of this report. Except as required by law, we undertake no obligations to update any forward-looking statements.Accordingly, you should also carefully consider the factors set forth in other reports or documents that we file from time to time with theSecurities and Exchange Commission (SEC). Unless otherwise stated, all references in this document to “we,” “us,” “our,” “Corcept,” the “Company,” “our company” andsimilar designations refer to Corcept Therapeutics Incorporated. 1 ®®Table of Contents ITEM 1. BUSINESS Overview We are a pharmaceutical company engaged in the discovery, development and commercialization of drugs for the treatment of severemetabolic, oncologic and psychiatric disorders associated with the steroid hormone cortisol. Elevated levels and abnormal release patternsof cortisol have been implicated in a broad range of human disorders. Since our inception in 1998, we have been developing mifepristone -a potent glucocorticoid receptor (GR) antagonist that modulates the activity of cortisol - for the treatment of serious illnesses. We havealso discovered three series of proprietary, next-generation selective GR antagonists. In February 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’ssyndrome who have type 2 diabetes mellitus or glucose intolerance and have failed surgery or are not candidates for surgery. FDA approvalmeans that we can market the drug for the approved indication in the United States. We first made Korlym available to patients in April2012 and continue to develop the sales, marketing, medical affairs and logistical infrastructure needed to commercialize the drug. We are conducting a Phase 1/2 trial of mifepristone (Korlym’s active ingredient) in combination with the chemotherapy drug eribulin(Halaven) to treat patients with GR-positive triple-negative breast cancer – a form of cancer with a particularly poor prognosis. We havecompleted the first, dose-finding portion of the study and have begun enrolling patients in the second, efficacy phase. We expect to haveresults by the end of 2015. In September 2014, we began a Phase 1 clinical study of CORT 125134, one of our proprietary, selective GR antagonists, to assess itssafety, tolerability and pharmacokinetics in healthy human volunteers. We expect to have results from this study in the second quarter of2015. On May 7, 2014, we announced the discontinuation of our Phase 3 study of mifepristone, the active ingredient in Korlym, fortreatment of psychotic depression (Study 14) after receiving the report of the study’s data monitoring committee that the trial was unlikelyto meet its primary endpoint with statistical significance. We began this study in 2008. See further discussion under “PsychoticDepression” below. The Role of Cortisol in Disease Corcept is focused on the development of drugs that modulate the activity of cortisol, a steroid hormone that plays a significant rolein the way the body reacts to stressful conditions. Cortisol is essential for survival. It significantly influences metabolism, exerts aclinically useful anti-inflammatory effect and contributes to emotional stability. Insufficient levels of cortisol may lead to dehydration,hypotension, shock, fatigue, low resistance to infection, trauma, stress and hypoglycemia. Excessive levels of cortisol may lead to impairedglucose tolerance, diabetes, obesity, depressed mood, psychosis, wasting of the arms and legs, edema, fatigue, hypertension and otherproblems. Pre-clinical and clinical data suggest that cortisol activity at GR may shield certain cancer cells from the effects ofchemotherapy. Elevated levels and abnormal release patterns of cortisol have also been linked to a broad range of conditions, such asweight gain, diabetes, hypertension, mood changes, psychosis and cognitive impairment. Cortisol binds to two receptors, the mineralocorticoid receptor and the glucocorticoid receptor, known as MR and GR,respectively. MR is a high-affinity receptor that is involved in the routine functions of cortisol in the brain. It has approximately ten timesthe affinity of GR for cortisol and its binding sites are filled with cortisol nearly all the time. In general, GR binding sites do not fill untillevels of cortisol become elevated. Short-term activation of GR has benefits, including increased alertness and improved ability to functionin stressful conditions. Long-term activation of GR, however, has been shown to have significant toxicity and appears to be linked tomultiple metabolic, psychiatric and oncologic diseases, including Cushing’s syndrome. Cortisol activity also appears to suppress the effectof chemotherapy in triple-negative breast cancer, ovarian cancer and prostate cancer. The action of cortisol can be moderated by the use of blockers, or antagonists, that compete with the hormone as it attempts to bind toits receptors. These antagonists, referred to as GR antagonists, may prevent the undesirable effects of elevated levels and abnormal releasepatterns of cortisol. The challenge in regulating levels of cortisol is that cortisol is essential for life, destroying the ability of the body to make cortisol ordrastically reducing its presence would cause serious harm. To have a viable therapeutic effect, a compound must be able to selectivelymodulate cortisol’s effects without suppressing them below normal levels. Mifepristone, the active ingredient in Korlym, works by selectively blocking the binding of cortisol to GR. It is neither an antagonistnor agonist of MR. It also blocks the binding of progesterone to the progesterone receptor (PR) and thereby terminates pregnancy. Becauseof its selective GR affinity, we believe that mifepristone can have a therapeutic benefit by modulating the effects 2 ®®Table of Contents of abnormal levels and release patterns of cortisol without compromising its necessary, normal functions. We have discovered three seriesof additional compounds that, while potently blocking the GR receptor, do not block the progesterone receptor, like mifepristone does, andthus do not terminate pregnancy. One of these compounds, CORT108297, has successfully completed Phase 1 trials. We expect anothercompound, CORT125134, to complete Phase 1 in the second quarter of 2015and we believe it is a potential therapy for several oncologicdisorders and Cushing’s syndrome. Cushing’s Syndrome Background. Cushing’s syndrome is a disorder caused by prolonged exposure of the body’s tissues to high levels of the hormonecortisol. Sometimes called “hypercortisolism,” it is relatively uncommon and most often affects adults aged 20 to 50. An estimated 10 to15 of every one million people are newly diagnosed with this syndrome each year, resulting in approximately 3,000 new patients and anestimated prevalence of 20,000 patients with Cushing’s syndrome in the United States. Symptoms vary, but most people with Cushing’s 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 andweak muscles. Irritability, anxiety, cognitive disturbances and depression are also common. Cushing’s syndrome can affect every organsystem in the body and can be lethal if not treated effectively. The preferred treatment for Cushing’s syndrome patients is surgery, which if successful can cure the disease. Depending on the typeof tumor, surgery can result in a range of complications and has varying rates of success. In approximately half of the patients, surgery isnot successful, either because the tumor cannot be removed completely or the disease returns. In February 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’ssyndrome who have type 2 diabetes mellitus or glucose intolerance and have failed surgery or are not candidates for surgery. FDA approvalmeans that we can market the drug for the approved indication in the United States. We received Orphan Drug Designation from the FDA in 2007 and in the EU in 2011 for Korlym for the treatment of endogenousCushing’s syndrome. In the United States, Orphan Drug Designation is a special status granted by the FDA to encourage the developmentof treatments for diseases or conditions that affect fewer than 200,000 patients. Drugs that receive Orphan Drug Designation in the UnitedStates obtain seven years of marketing exclusivity for the approved indication from the date of drug approval, as well as tax credits forclinical trial costs, marketing application filing fee waivers and assistance from the FDA in the drug development process. Even after anorphan drug is approved for its orphan indication, the FDA can later approve a different drug for the same condition if the FDA concludesthat the later drug is safer, more effective or makes a major contribution to patient care. In addition, the FDA may, during the orphanexclusivity period, approve the same drug for a different indication. Orphan Drug Designation in the EU confers benefits similar to those in the United States but includes ten years of marketingexclusivity for the approved indication in all 28 Member States, free scientific advice during drug development, access to a centralizedreview process and a reduction or complete waiver of fees levied by the European Medicines Agency (EMA). In October 2013, wesubmitted a Marketing Authorization Application (MAA) to the EMA that, subject to review by the EMA, could serve as the basis for theapproval of mifepristone in the EU. Commercialization of Korlym. We first made Korlym available to patients on a commercial basis in April 2012 Physiciansprescribing Korlym determine the appropriate dose for each patient by assessing tolerability and degree of improvement in manifestationsof Cushing’s syndrome. In the first six weeks, these manifestations may include changes in glucose control, anti-diabetic medicationrequirements, insulin levels and psychiatric symptoms. After two months, physicians may assess their patients for improvements incushingoid appearance, acne, hirsutism, striae and decreased body weight, along with further changes in glucose control. We sell Korlym using experienced sales representatives and medical science liaisons (MSLs) who target the approximately 1,500endocrinologists who care for a large portion of the Cushing’s syndrome population. We also reach patients directly through web-basedinitiatives and interactions with patient groups. Because a large percentage of the people who suffer from Cushing’s syndrome remainundiagnosed or inadequately treated, we have developed and continue to refine and expand programs to educate the medical communityand patients about early diagnosis of this syndrome and to increase awareness regarding the role of GR antagonists to treat this syndrome. We use a specialty pharmacy and a specialty distributor to distribute Korlym and provide logistical support. We have also retained a vendor to help patients with the reimbursement process and to administer our financial assistance programsfor uninsured or under-insured patients. We donate money to the National Organization for Rare Disorders (NORD), an 3 ®Table of Contents independent charitable foundation that helps Cushing’s syndrome patients who satisfy its financial criteria pay for their Cushing’ssyndrome care. Triple-Negative Breast Cancer. In January 2014 we began a Phase 1/2 study of Korlym in combination with eribulin in the treatment of triple-negative breast cancer. Triple-negative breast cancer is a form of the disease in which the three receptors that fuel most breast cancer growth – estrogen,progesterone, and the HER-2/neu gene – are not present. Because the tumor cells lack these receptors, common treatments, such as drugsthat target estrogen, progesterone, and HER-2, are ineffective. Approximately 40,000 women are diagnosed with triple-negative breast cancer each year. There is no FDA-approved treatment andneither a targeted treatment nor a preferred standard chemotherapy regimen for relapsed triple-negative breast cancer patients exists. There is substantial in vitro, in vivo and clinical evidence that it is cortisol’s binding to GR – the receptor to which Korlymcompetitively binds – that allows triple-negative breast tumor cells to escape chemotherapy. Our research indicates that substantially morethan half of patients with triple-negative breast cancer have tumors that express GR. We have developed a proprietary diagnostic test foridentifying GR-positive tumors, using a laboratory that meets Clinical Laboratory Improvement Amendments (CLIA) federal regulatorystandards. These standards require clinical laboratories to establish and document their own performance specifications for laboratory-developed tests to ensure accurate and precise results. Should we seek approval of Korlym or one of our selective GR antagonists to treattriple-negative breast cancer, we plan to include use of this assay in our requested label. At the December 2013 San Antonio Breast Cancer Symposium, investigators from the University of Chicago reported the findingsfrom their own clinical study of Korlym in combination with the chemotherapy drug nab-paclitaxel (Abraxane) to treat triple-negativebreast cancer in patients with relapsed, metastatic disease. Of the six patients in their study whose tumors were GR positive, five respondedto treatment: two had a “complete response” (defined, according to the RECIST criteria, as the complete disappearance of the target tumor);two had a “partial response” (which RECIST defines as at least a 30 percent reduction in tumor size); and one had stable disease. All of thepatients had previously failed chemotherapy with a taxane. (RECIST (Response Evaluation Criteria In Solid Tumors) is a set of publishedrules that define when tumors in cancer patients improve ("respond"), stay the same ("stabilize"), or worsen ("progress") during treatment.The criteria were published in February 2000 by an international collaboration including the European Organization for Research andTreatment of Cancer, the National Cancer Institute of the United States, and the National Cancer Institute of Canada Clinical Trials Group.) In January 2015, we completed the dose-finding portion of our Phase 1/2 study and have begun the efficacy phase of our study. Thisphase enroll 20 patients with relapsed, metastatic, GR-positive triple-negative breast cancer. These patients will receive one 300 mgKorlym tablet each day, combined with eribulin administered on days one and eight of a 21-day cycle. We expect to have efficacy resultsof our Phase 1/2 study by the end of 2015. CORT125134 and Our Other Next-Generation Selective GR Antagonists In 2003, we initiated a discovery research program to identify and patent selective GR antagonists. We have identified three distinctseries of selective GR antagonists. These compounds, like Korlym, potently block GR but do not block the PR (progesterone), ER(estrogen), AR (androgen) or MR (mineralocorticoid) receptors. Both the United States Patent & Trademark Office (USPTO) and theEuropean Patent Office (EPO) have issued to us composition of matter patents in each of the three series. One additional composition ofmatter patent application is pending. See “Business - Intellectual Property.” Several of our new compounds have demonstrated positive results in animal or in vitro models in various indications, including butnot limited to the following: for the prevention and reversal of alcohol dependence; amyotrophic lateral sclerosis (Lou Gehrig’s disease);Alzheimer’s disease; anti-psychotic-induced weight gain; fatty liver disease; breast, ovarian and prostate cancer (in combination with achemotherapeutic agent); electroconvulsive-induced retrograde amnesia; metabolic syndrome; muscular dystrophy; obesity; prevention ofglucocorticoid-induced neurological damage in premature infants; and post-traumatic stress disorder. In September 2014, we commenced enrollment in a Phase 1 clinical study with CORT125134. This study will assess the safety,tolerability and pharmacokinetics of CORT125134 in healthy human volunteers. If Phase 1 results are positive, we plan to advanceCORT125134 to Phase 2 for both an oncology indication and Cushing’s syndrome early next year. Another compound, CORT108297, hascompleted Phase 1 trials and we may explore its potential use in psychiatric and other central nervous system disorders. 4 ®Table of Contents We intend to continue our discovery research program with the goal of identifying new selective GR antagonists, to manufacture andconduct pre-clinical development of one or more of these compounds and to study the most promising of them in humans. See “Business – Intellectual Property.” Proof-of-Concept Studies Conducted by Corcept We have performed proof-of-concept studies using mifepristone and several of our proprietary, selective GR antagonists for theprevention and reversal of weight gain caused by the use of atypical anti-psychotic medications. Mifepristone In 2005, we announced results from two preclinical studies conducted in a rat model of olanzapine-induced weight gain. Thesestudies demonstrated that mifepristone’s GR antagonist action has the potential to both reverse the weight gain associated with olanzapineand to prevent the weight gain associated with the initiation of treatment with olanzapine, which led to our studies in humans. In 2007, we announced results of our human clinical proof-of-concept study evaluating the ability of mifepristone to mitigate weightgain associated with the administration of Eli Lilly’s Zyprexa (olanzapine). The results indicated a statistically significant reduction inweight gain in those subjects who took Zyprexa plus mifepristone compared to those who took Zyprexa plus placebo. Eli Lilly providedZyprexa and financial support for this study. During 2009, we announced results from another proof-of-concept study evaluating theability of mifepristone to mitigate weight gain associated with the administration of Johnson & Johnson’s Risperdal (risperidone). Theresults indicated a statistically significant reduction in weight gain in those subjects who took Risperdal plus mifepristone compared tothose who took Risperdal plus placebo. Both Zyprexa and Risperdal are indicated for the treatment of schizophrenia and bipolar disorder. In the study of mifepristone and Zyprexa, 57 lean, healthy men (body mass index of 25 or less) were randomized to receive eitherZyprexa plus placebo (n=22), Zyprexa plus mifepristone (n=24) or mifepristone plus placebo (n=11). This study took place in aninstitutional setting where daily weights were recorded and a range of metabolic parameters were measured. In the two week study, subjectsin the Zyprexa plus placebo group gained an average of 7.0 pounds and subjects in the Zyprexa plus mifepristone group gained an averageof 4.4 pounds; which is a statistically significant difference (p<.001). Subjects in the mifepristone plus placebo group gained an average of4.4 pounds. The difference in weight gain trajectory was apparent in the first days of the study, reaching statistical significance during thefirst week. The increase in waist circumference, a surrogate for abdominal fat, in subjects who received Zyprexa plus placebo was alsosignificantly greater than subjects who received Zyprexa plus mifepristone (p<.01). The study was not designed to enroll a sufficientnumber of patients to have statistical power to detect significant effects on metabolic measures; however, the effect of mifepristone in thismodel was greater than expected. In addition to the finding about waist circumference, notable additional non-statistically significantgroup differences were observed. Patients taking Zyprexa plus placebo experienced greater increases from baseline to end of study in bothtriglycerides and fasting insulin compared to patients taking Zyprexa plus mifepristone. No unexpected study drug related adverse eventswere observed. These results were published in Advances in Therapy in 2009. In the study of mifepristone and Risperdal, 75 lean, healthy men (body mass index of 23 or less) were randomized to receive eitherRisperdal plus placebo (n=30), Risperdal plus mifepristone (n=30) or mifepristone plus placebo (n=15). This study also took place in aninstitutional setting where daily weights were recorded and a range of metabolic parameters were measured. In this four-week randomizeddouble-blind controlled study, subjects in the Risperdal plus placebo group gained an average of 9.2 pounds, compared to a gain of 5.1pounds in the Risperdal plus mifepristone group. This difference was statistically significant (p<0.0001). Additional important metabolicparameters, including fasting insulin, triglycerides and abdominal fat, as reflected by waist circumference, were also measured. Theaddition of mifepristone to Risperdal resulted in a statistically significant reduction in fasting insulin levels, triglyceride levels, andabdominal fat (as measured by waist circumference). Consistent with prior studies, mifepristone appeared to be well tolerated. These resultswere published in Obesity in 2010. The combinations of Zyprexa and mifepristone or Risperdal and mifepristone are not approved for any indication. The purpose ofthese studies was to explore the hypothesis that GR antagonists would mitigate weight gain and other metabolic effects associated withantipsychotic medications. The group of medications sometimes referred to as “atypical antipsychotics,” including Zyprexa, Risperdal,Clozaril (clozapine) and Seroquel (quetiapine), are widely used to treat schizophrenia and bipolar disorder. All medications in this groupare associated with treatment-emergent weight gain of varying degrees and carry a warning in the label relating to treatment-emergenthyperglycemia and diabetes mellitus. 5 Table of Contents Our Proprietary Selective GR Antagonist, CORT108297 In January 2009, we announced results from two preclinical studies of our next-generation selective GR receptor antagonist,CORT108297, for the prevention and reversal of weight gain caused by olanzapine, a medication marketed by Eli Lilly as Zyprexa. Usingthe same experimental rat model used previously with mifepristone, the preclinical studies demonstrated that CORT 108297 (i) reversedand (ii) prevented the weight gain caused by olanzapine in rats. Eli Lilly provided olanzapine and funded the cost of the studies. Theresults of these two experiments replicated the findings from previous animal studies of mifepristone, and were also consistent with resultsfrom randomized trials conducted in humans. The results were published in the peer-reviewed journal, Diabetes Obesity and Metabolism in2010. A third study in the rat further evaluated the dose response relationship of CORT108297 in preventing olanzapine induced weightgain with doses from 2 mg/kg to 20 mg/kg. At the American Diabetes Association conference in 2009 there was a presentation of preclinical data from a study whichdemonstrated that CORT108297 suppresses body weight gain and improves insulin sensitivity in healthy mice fed a 60% fat diet and highsucrose liquid. In 2011, these study results were published in the peer-reviewed publication, The Journal of Nutrition and Metabolism. Studies by Independent Investigators We have collaborated with independent academic researchers investigating the utility of our proprietary selective GR antagonists inpre-clinical studies in a wide range of disorders, including Cushing’s syndrome, alcoholism, post-traumatic stress disorder, Alzheimer’sdisease, amyotrophic lateral sclerosis (ALS), muscular dystrophy, the metabolic syndrome, ovarian cancer, castration-resistance prostaticcancer, fatty liver disease and triple-negative breast cancer. We have also collaborated with researchers investigating the utility of mifepristone in pre-clinical and human proof-of-conceptstudies in a wide range of disorders, including alcoholism, post-traumatic stress disorder, Alzheimer’s disease, central serouschorioretinopathy, triple-negative breast cancer, castration resistant prostatic cancer, and ovarian cancer. Termination of Our Phase 3 Trial of Mifepristone to Treat Psychotic Depression In May 2014, we discontinued our Phase 3 study of mifepristone, the active ingredient in Korlym, for the treatment of psychoticdepression after the study’s data monitoring committee informed us that the trial had failed to meet its primary endpoint – a rapid andsustained reduction in the patients’ psychotic symptoms – with statistical significance. The committee based its conclusion on an analysisof data from the first 226 patients to enroll in the study. The committee also advised us that continuing the study to its full enrollment of450 patients would be unlikely to generate a statistically significant result. We terminated it to redeploy resources to more promisingprograms. Clinical Trial Agreements Many of our clinical trials are conducted through the use of clinical research organizations (CROs.) At our request, theseorganizations oversee clinical trials at various institutions to test the safety and efficacy of our product candidates for the targetedindications. Our Phase 1/2 trial for the study of mifepristone in the treatment of triple-negative breast cancer is being conducted under anagreement with Chiltern International Limited (Chiltern), formerly known as Ockham Development Group Inc. This agreement may beterminated by us with 60 days notice to Chiltern or sooner if the parties agree to do so. Our Phase 1 trial of CORT125134 is beingconducted under an agreement with Quotient Clinical Limited and may be terminated by us with 30 days notice to Quotient. Research and Development We incurred $18.4 million, $20.5 million and $14.1 million of research and development expenses in the years ended December 31,2014, 2013 and 2012, respectively, which accounted for 34%, 39% and 36% of our total operating expenses in these respective fiscalyears. For a further discussion, see Part II, Item 7, Management’s Discussion and Analysis of Financial Conditions and Results ofOperations – Results of Operations. Manufacturing Korlym As a drug discovery, development and commercialization company, we intend to continue to utilize our financial resources tocommercialize Korlym and advance other product candidates rather than diverting resources to establishing our own manufacturingfacilities. We intend to continue to rely on experienced contract manufacturers to produce our product candidates. We have entered into amanufacturing agreement with one contract manufacturer, Produits Chimiques Auxiliaires et de Synthese SA (PCAS), to produce the activepharmaceutical ingredient (API) for Korlym. The FDA approved our commercial use of material produced by PCAS as part of 6 Table of Contents our NDA submission for Korlym. In March 2014, we entered into a new long-term manufacturing and supply agreement with PCAS for themanufacture of mifepristone, the active pharmaceutical agreement in Korlym. We have agreed to purchase a minimum percentage of ourmifepristone requirements from PCAS; the amount of the commitment will depend on our future needs. The initial term of the agreement isfive years, with an automatic extension of one year unless either party gives 12 months’ prior written notice that it does not want anextension. We have the right to terminate the agreement if PCAS is unable to manufacture the product for a consecutive nine-month period. We have one tablet manufacturer for Korlym – AAI Pharma Services Corp. (AAI) - which was approved by the FDA in November2012 for the manufacture of our commercial tablets. In April 2014, we entered into a new manufacturing agreement with AAI for themanufacture and package Korlym tablets. The initial term of this agreement is a period of three years, with consecutive automaticextensions of two years unless either party gives written notice - in the case of AAI Pharma, 18 months prior to the end of the applicableterm, and in our case 12 months prior to the end of the applicable term - that it does not want such an extension. We have the right toterminate the agreement if AAI Pharma is unable to manufacture the product for a consecutive four-month period or if the product iswithdrawn from the market. There are no minimum purchase obligations under this agreement. Competition for Korlym Korlym competes with established treatments, including surgery, radiation and approved medicines prescribed “off-label.” Korlymalso competes with Novartis’ drug, Signifor (pasireotide) Injection, which the FDA approved in December 2012 for the treatment of adultpatients with Cushing’s disease (a subset of Cushing’s syndrome) who are not candidates for pituitary surgery or for whom surgery did notwork. In April 2012, Signifor received marketing approval in the EU. It has Orphan Drug designation in the United States and theEU. Signifor is a somatostatin analogue that inhibits ACTH production by the pituitary, which leads to reduced cortisol production insome patients. In the Phase 3 study that served as the basis for Novartis’ NDA, the drug normalized cortisol levels in 26 percent ofpatients. Sixty-seven percent of patients developed hyperglycemia or diabetes. Signifor must be taken twice daily, by injection. Novartishas also announced that it is undertaking an investigational study of an experimental compound (LC1699) to determine whether it cansafely reduce the level of urinary free cortisol in patients with Cushing’s disease. Korlym may also experience competition from compounds under development for Cushing’s syndrome. We are aware thatLaboratoire HRA Pharma (HRA) has received an Orphan Drug Designation in the United States and EU for the use of mifepristone to treat asubtype of Cushing’s syndrome. HRA began a Phase 2 trial in Europe and the United States for this indication, which has been terminated.We are also aware that Exelgyn Laboratories, which operates as a subsidiary of Medi Challenge (Pty) Ltd., received Orphan DrugDesignation for endogenous Cushing’s syndrome in the EU, but they have stated that they have not yet conducted any clinical trials. Many colleges, universities and public and private research organizations are also active in the human health care field. While theseentities focus on education, they may develop or acquire proprietary technology that we may require for the development of our productcandidates. We may attempt to obtain licenses to this proprietary technology. Our ability to compete successfully will be based on our ability to develop proprietary products, attract and retain scientificpersonnel, obtain patent or other protection for our product candidates, obtain required regulatory approvals and manufacture andsuccessfully market Korlym and our future products either alone or through outside parties. Intellectual Property Patents and other proprietary rights are important to our business. It is our policy to seek patent protection for our inventions, and torely upon trade secrets, know-how, continuing technological innovations and licensing opportunities to develop and maintain ourcompetitive position. Mifepristone The composition of matter patent covering mifepristone has expired. The only previously FDA-approved use of mifepristone is toterminate pregnancy. The FDA has imposed significant restrictions on the use of mifepristone to terminate pregnancy. To protect ourmarket for Korlym we plan to rely on (1) the exclusive marketing rights conferred as a benefit of Orphan Drug Designation in the UnitedStates and EU, (2) the restrictions imposed by the FDA on the use of mifepristone to terminate pregnancy, (3) the different patientpopulations, administering physicians and treatment settings between the use of mifepristone to terminate pregnancy and to treat Cushing’ssyndrome and (4) our method of use patents described below. Oncology Under an agreement with University of Chicago, we have licensed exclusive rights to U.S. Patent No. 8,710,035 “Methods andCompositions Related to Glucocorticoid Receptor Antagonists and Breast Cancer.” 7 ®Table of Contents In the event any products are commercialized under any of the claims contained in this patent, we would be required to makemilestone payments and pay royalties to the University of Chicago on sales of such products. If the University of Chicago were toterminate any of our exclusive licenses due to breach of the license on our part, we would not be able to commercialize mifepristone for thetreatment of triple-negative breast cancer. Proprietary GR Antagonists We also own issued U.S. patents for the use of GR antagonists in the treatment of mild cognitive impairment, the treatment of weightgain following treatment with antipsychotic medication, the prevention and treatment of stress disorders, improving the therapeuticresponse to ECT, the treatment of delirium, the treatment of catatonia, the treatment of gastroesophageal reflux disease, the treatment ofmigraine headaches, the treatment of psychosis with Interferon-Alpha therapy, the treatment of neurological damage in prematureinfants, the treatment of diseases using combination steroid and GR antagonist therapy and for inhibiting cognitive deterioration in adultswith Down’s Syndrome. We also own a method of use patent for optimizing mifepristone levels in plasma serum in patients suffering frommental disorders. The expiration dates of these patents and their foreign counterparts range from 2020 to 2034. In addition, we have three U.S. method-of-use applications covering certain GR antagonists, including the treatment of:·patients suffering from mental disorders by optimizing mifepristone absorption;·muscular dystrophy; and·amyotrophic lateral sclerosis (ALS). The approximate expiration dates of the patents that could issue from these applications and their foreign counterparts range from2029 to 2032. We have eight U.S. composition of matter patents containing claims relating to three distinct series of novel selective GRantagonists. Four of these patents have issued in Europe, with applications for two more pending. The expiration dates of these patents andtheir 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. However, we cannot assure you that any of our patent applications will result in the issuance of patents, that any issued patent will includeclaims of the breadth sought in these applications, or that competitors will not successfully challenge or circumvent our patents if they areissued. Although eight of our patents have claims directed to the composition of compounds, we do not have a patent with claims directed tothe composition of mifepristone. Our rights under our issued patents related to mifepristone cover only the use of that compound in thetreatment of specific diseases. Psychotic Depression Under an agreement with Stanford University, we have licensed exclusive rights to the following issued U.S. patents and anycorresponding foreign patents: U.S. Patent NumberSubject MatterExpiration Date6,150,349Use of GR antagonists in the treatment of psychotic major depressionOctober 5, 20186,362,173Use of GR antagonists in the treatment of cocaine-induced psychosisOctober 5, 20186,369,046Use of GR antagonists in the treatment of early dementiaFebruary 4, 2019 The corresponding foreign patents expire in 2018. We are required to make milestone payments and pay royalties to Stanford University on sales of products commercialized under anyof the above patents. If Stanford University were to terminate any of our exclusive licenses due to breach of the license on our part, wewould not be able to commercialize mifepristone for the treatment of the psychotic features of psychotic depression, cocaine-inducedpsychosis or early dementia. Competition The patent positions of companies in the pharmaceutical industry are highly uncertain, involve complex legal and factual questionsand have been and continue to be the subject of much litigation. Our product candidates may give rise to claims that we infringe on theproducts or proprietary rights of others. If it is determined that our drug candidates infringe on others’ patent rights, 8 Table of Contents we may be required to obtain licenses to those rights. If we fail to obtain licenses when necessary, we may experience delays incommercializing our product candidates while attempting to design around other patents, or determine that we are unable to commercializeour product candidates at all. If we do become involved in intellectual property litigation, we are likely to incur considerable costs indefending or prosecuting the litigation. We believe 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 andThe University of Chicago. License Agreements Under our exclusive license agreement with Stanford University to patents covering the use of mifepristone to treat the psychoticfeatures of psychotic depression, early dementia and cocaine-induced psychosis, we are required to make milestone payments and payroyalties to Stanford University on sales of products commercialized under any of the above patents. These milestone payments arecreditable against future royalties. This license agreement expires upon expiration of the related patents or upon notification by us toStanford. See “Intellectual Property.” In November 2013, we licensed from the University of Chicago exclusive rights to the University’s U.S. Patent No. 8,710,035“Methods and Compositions Related to Glucocorticoid Receptor Antagonists and Breast Cancer”. In exchange for the license, we haveagreed to pay the University customary milestone fees and royalties on sales of any products commercialized under any of the claims. Wehave recently begun a Phase 1 study of mifepristone in combination with the chemotherapy drug eribulin in the treatment of triple-negativebreast cancer. Government Regulation Prescription pharmaceutical products are subject to extensive pre- and post-approval regulation, including regulations that governthe testing, manufacturing, safety, efficacy, labeling, storage, record keeping, advertising, and promotion of the products under the FederalFood, Drug and Cosmetic Act. All of our product candidates will require regulatory approval by government agencies prior tocommercialization. The process required by the FDA before a new drug may be marketed in the United States generally involves thefollowing: completion of preclinical laboratory and animal testing; submission of an IND, which must become effective before clinicaltrials may begin; performance of adequate and well-controlled human clinical trials to establish the safety and efficacy of the proposed drugor biologic’s intended use; and, in the case of a new drug, approval by the FDA of an NDA. The process of complying with these and otherfederal and state statutes and regulations in order to obtain the necessary approvals and subsequently complying with federal and statestatutes and regulations involves significant time and expense. Preclinical studies are generally conducted in laboratory animals to evaluate the potential safety and the efficacy of a product. Drugdevelopers submit the results of preclinical studies to the FDA as a part of an IND, which must be approved before beginning clinical trialsin humans. If it is anticipated that the clinical trial will be conducted in Europe, a Clinical Trial Authorization (CTA) must be submittedand approved by the appropriate European regulatory agency prior to the commencement of the study. Typically, human clinical trials areconducted in three sequential phases that may overlap.·Phase 1. Clinical trials are conducted with a small number of subjects to determine the early safety profile, maximum tolerateddose and pharmacokinetics of the product candidate in human volunteers.·Phase 2. Clinical trials are conducted with groups of patients afflicted with a specific disease to determine preliminary efficacy,optimal dosages and expanded evidence of safety.·Phase 3. Large-scale, multi-center, comparative trials are conducted with patients afflicted with a target disease to establish theoverall risk/benefit ratio of the drug and to provide enough data to demonstrate with substantial evidence the efficacy andsafety of the product, as required by the FDA. The FDA and the Institutional Review Boards closely monitor the progress of each of the three phases of clinical trials that areconducted in the United States and may reevaluate, alter, suspend or terminate the testing at any time for various reasons, including a beliefthat the subjects are being exposed to an unacceptable health risk. The FDA may also require that additional studies be conducted, such asstudies demonstrating that the drug being tested does not cause cancer. After Phase 3 trials are completed, drug developers submit the results of preclinical studies, clinical trials, formulation studies anddata supporting manufacturing to the FDA in the form of an NDA for approval to commence commercial sales. The FDA reviews all NDAssubmitted before it accepts them for filing. The FDA may request additional information rather than accept an NDA for filing. If the FDAaccepts an NDA for filing, it may grant marketing approval, request additional information or deny the application if it determines that theapplication does not meet regulatory approval criteria. Once an NDA has been accepted for filing, by law the FDA has 180 days to examinethe application and respond to the applicant. However, the review process is often significantly extended by FDA requests for additionalinformation or clarification. Under the Prescription Drug User Fee Act, the FDA has a goal of responding to NDAs within ten months of thefiling date for standard review, and 6 months for priority review if a sponsor shows 9 Table of Contents that its drug candidate provides a significant improvement compared to marketed drugs. FDA approvals may not be granted on a timelybasis, or at all. If the FDA approves an NDA, the subject drug becomes available for physicians to prescribe in the United States. Once approved, theFDA may withdraw the product approval if compliance with pre- and post-approval regulatory standards is not maintained. The drugdeveloper must submit periodic reports to the FDA. Adverse experiences with the product must be reported to the FDA and could result inthe imposition of marketing restrictions through labeling changes or product removal. Product approvals may be withdrawn if problemswith safety or efficacy occur after the product reaches the marketplace. In addition, the FDA may require post-marketing studies, referred toas Phase 4 studies, to monitor the effect of approved products, and may limit further marketing of the product based on the results of thesepost-approval studies. Facilities used to manufacture drugs are subject to periodic inspection by the FDA and other authorities where applicable, and mustcomply with current Good Manufacturing Practices regulations (cGMP). Failure to comply with the statutory and regulatory requirementssubjects the manufacturer to possible legal or regulatory action, such as suspension of manufacturing, seizure of product or voluntary recallof a product. With respect to post-approval product advertising and promotion, the FDA imposes a number of complex regulations on entities thatadvertise and promote pharmaceuticals, which include, among others, standards and regulations for direct-to-consumer advertising, off-label promotion, industry sponsored scientific and educational activities, and promotional activities involving the Internet. The FDA hasvery broad enforcement authority under the Federal Food, Drug and Cosmetic Act, and failure to abide by these regulations can result inpenalties including the issuance of a warning letter directing a company to correct deviations from FDA standards, a requirement that futureadvertising and promotional materials be pre-cleared by the FDA, and state and federal civil and criminal investigations and prosecutions. In addition to studies requested by the FDA after approval, a drug developer may conduct other studies to explore use of the approvedcompound for treatment of new indications. The purpose of these trials and studies and related publications is to broaden the applicationand use of the drug and its acceptance in the medical community. Data supporting the use of a drug for these new indications must besubmitted to the FDA in a new or supplemental NDA that must be approved by the FDA before the drug can be marketed for the newindications. Orphan Drug Designation. We have received Orphan Drug designation for Korlym for the treatment of endogenous Cushing’ssyndrome in both the United States and the EU. In the United States, Orphan Drug designation provides special status to a product to treat arare disease or condition providing that the product meets certain criteria. Orphan designation qualifies the sponsor of the product for thetax credit and marketing incentives of the Orphan Drug Act, including seven years of exclusive marketing rights for the specific drug for theorphan indication, if it receives the first regulatory approval for that indication, with limited exceptions. A marketing application for aprescription drug product that has been designated as a drug for a rare disease or condition is not subject to a prescription drug user feeunless the application includes an indication for other than a rare disease or condition. Orphan Drug designation does not preventcompetitors from developing or marketing different drugs for an indication. It also does not convey an advantage in, or shorten theduration of, the review and approval process for a drug by the applicable regulatory authority. Benefits of Orphan Drug Designation in the EU are similar to those in the U.S., but include ten years of marketing exclusivity in all28 Member States, free scientific advice during drug development, access to a centralized review process and a reduction or completewaiver of fees levied by the European Medicines Agency (EMA). Approvals outside the United States. Other than applying for and receiving Orphan Drug Designation for Korlym for Cushing’ssyndrome in the EU and submitting our MAA for that indication, we have not started the regulatory approval process in any jurisdictionother than the United States. We, or our potential future partners, will have to complete an approval process similar to the U.S. approvalprocess in foreign target markets for our product candidates before we can commercialize our product candidates in those countries. Theapproval procedure and the time required for approval vary from country to country and can involve additional testing. Foreign approvalsmay not be granted on a timely basis, or at all. Regulatory approval of pricing is required in most countries other than the United States. The prices approved may be too low to generate an acceptable return to us. Coverage and Reimbursement. Sales of our products will depend, in part, on the extent to which our products will be covered bythird-party payors, such as government health care programs, commercial insurance and managed healthcare organizations. Although thistrend has not had a material impact on the amount or timing of our revenues, these third-party payors are increasingly limiting coverage andreducing reimbursements for medical products and services. In addition, the U.S. government, state legislatures and foreign governmentshave continued implementing cost-containment programs, including price controls, restrictions on coverage and reimbursement andrequirements for substitution of generic products. Adoption of price controls and cost-containment measures, and adoption of morerestrictive policies in jurisdictions with existing controls and measures, could limit our net revenue and results. Decreases in third-partyreimbursement for our products or a decision by a third-party payor to not cover our products could reduce physician utilization of ourproducts and have a material adverse effect on our sales, results of operations and financial condition. 10 Table of Contents Other Healthcare Laws. We are subject to healthcare regulation and enforcement by the federal government and the states andforeign governments in which we conduct our business. These laws include, without limitation, state and federal anti-kickback, fraud andabuse, false claims, privacy and security and physicians sunshine laws and regulations. The federal Anti-Kickback Statute prohibits, among other things, any person from knowingly and willfully offering, soliciting,receiving or providing remuneration, directly or indirectly, to induce either the referral of an individual, for an item or service or thepurchasing or ordering of a good or service, for which payment may be made under federal healthcare programs such as the Medicare andMedicaid programs. The Anti-Kickback Statute is subject to evolving interpretations. In the past, the government has enforced the Anti-Kickback Statute to reach large settlements with healthcare companies based on sham consulting and other financial arrangements withphysicians. Further, the recently enacted Patient Protection and Affordable Care Act, as amended by the Health Care and EducationReconciliation Act, or collectively, the PPACA, among other things, amends the intent requirement of the federal Anti-Kickback Statuteand the criminal statute governing healthcare fraud statutes. A person or entity no longer needs to have actual knowledge of these statutesor specific intent to violate them. In addition, the PPACA provides that the government may assert that a claim including items or servicesresulting from a violation of the federal Anti-Kickback Statute constitutes a false or fraudulent claim for purposes of the federal FalseClaims Act or federal civil money penalties statute. The majority of states also have anti-kickback laws which establish similarprohibitions and in some cases may apply to items or services reimbursed by any third-party payor, including commercial insurers. Additionally, the civil False Claims Act prohibits knowingly presenting or causing the presentation of a false, fictitious or fraudulentclaim for payment to the U.S. government. Actions under the False Claims Act may be brought by the Attorney General or as a qui tamaction by a private individual in the name of the government. Violations of the False Claims Act can result in very significant monetarypenalties and treble damages. The federal government is using the False Claims Act, and the accompanying threat of significant liability,in its investigation and prosecution of pharmaceutical and biotechnology companies throughout the country, for example, in connectionwith the promotion of products for unapproved uses and other sales and marketing practices. The government has obtained multi-millionand multi-billion dollar settlements under the False Claims Act in addition to individual criminal convictions under applicable criminalstatutes. Given the significant size of actual and potential settlements, it is expected that the government will continue to devotesubstantial resources to investigating healthcare providers’ and manufacturers’ compliance with applicable fraud and abuse laws. In addition, there has been a recent trend of increased federal and state regulation of payments made to physicians and otherhealthcare providers. The PPACA, among other things, imposes new reporting requirements on drug manufacturers for payments made bythem to physicians and teaching hospitals, as well as ownership and investment interests held by physicians and their immediate familymembers. Failure to submit required information may result in civil monetary penalties of up to an aggregate of $150,000 per year (or up toan aggregate of $1 million per year for “knowing failures”), for all payments, transfers of value or ownership or investment interests that arenot timely, accurately and completely reported in an annual submission. Drug manufacturers are required to and submit reports to thegovernment by the 90 day of each calendar year. Certain states also mandate implementation of commercial compliance programs, imposerestrictions on drug manufacturer marketing practices and/or require the tracking and reporting of gifts, compensation and otherremuneration to physicians. The shifting commercial compliance environment and the need to build and maintain robust and expandable systems to comply withdifferent compliance and/or reporting requirements in multiple jurisdictions increase the possibility that a healthcare company may violateone or more of the requirements. If our operations are found to be in violation of any of such laws or any other governmental regulationsthat apply to us, we may be subject to penalties, including, without limitation, civil and criminal penalties, damages, fines, the curtailmentor restructuring of our operations, exclusion from participation in federal and state healthcare programs and imprisonment, any of whichcould adversely affect our ability to operate our business and our financial results. Executive Officers The following table sets forth, as of March 3, 2015, information about our executive officers: NameAgePositionJoseph K. Belanoff, M.D.57Chief Executive Officer, President and DirectorG. Charles Robb52Chief Financial Officer and SecretarySteven Lo47Senior Vice President , OncologyAnne M. LeDoux67Vice President, Controller and Chief Accounting Officer Joseph K. Belanoff, M.D. is a co-founder of our company, has served as a member of our Board and as our Chief Executive Officersince 1999 and as our President since January 2014. Dr. Belanoff is currently a clinical faculty member and has held various positions inthe Department of Psychiatry and Behavioral Sciences at Stanford University since 1992. Dr. Belanoff received his B.A. from AmherstCollege and his M.D. from Columbia University’s College of Physicians & Surgeons. Our Board selected Dr. Belanoff 11 thTable of Contents to serve as a director because, as our Chief Executive Officer, he brings expertise and knowledge regarding our business and operations toour Board of Directors. Dr. Belanoff also has expertise in clinical medicine and psychopharmacology. G. Charles Robb has served as Chief Financial Officer since September 2011 and as our Secretary since January 2014. Mr. Robb hasmore than 25 years of experience in executive management, operations and finance. From April 2005 through August 2011 Mr. Robbserved as the Senior Vice President of Operations, Administration and Finance of Fitness Anywhere, Inc. (FAI), a private fitness equipmentand training company with operations in the United States, Europe and Asia. From 2003 to 2005, Mr. Robb was engaged in the privatepractice of law. From 2000 to 2002 he was Senior Vice President of Citadon, Inc. He also held positions in business development forNormura Asset Capital Corporation from 1998 to 1999 and in sales and marketing for Legal Research Network, Inc. from 1996 to 1998. From 1992 to 1996 Mr. Robb practiced law at Howard, Rice, Nemerovski, Canady, Falk & Rabkin. Mr. Robb earned a B.A. in English andPolitical Philosophy from Yale and a J.D. from Harvard Law School, where he was a member of the Harvard Law Review. Steven Lo, our Senior Vice President, Oncology, joined us as Vice President of Commercial Operations in September 2010 to developour program for the commercialization of Korlym. In November 2013, Mr. Lo was promoted to the position of Senior Vice President andChief Commercial Officer and, in February 2015, he took responsibility for planning the potential commercialization of our product intothe treatment of oncology. Mr. Lo has more than 20 years of commercial experience in the pharmaceutical and biotechnologyindustry. From 1997 to 2010, Mr. Lo held various positions in marketing, sales and managed markets at Genentech, Inc., a biotechnologycompany that became a member of the Roche Group in March 2009, most recently as Franchise Head, leading that company'sendocrinology marketing and sales organization. Mr. Lo received his B.S. degree from the University of California, Davis and his Master ofHealth Administration degree from the University of Southern California. Anne M. LeDoux, our Vice President, Controller and Chief Accounting Officer, joined us as Controller in 2004 and was promoted toher current position in April 2007. Ms. LeDoux has over 25 years of financial and accounting management experience with publicpharmaceutical and biotechnology companies. Prior to joining Corcept in 2004, Ms. LeDoux served in various financial positions atAviron, Roche Biosciences and Syntex Corporation. She was also Vice President and Chief Financial Officer at the Northern CaliforniaHealth Center and Vice President, Finance for the Children’s Hospital of San Francisco. Ms. LeDoux is a Certified Public Accountant withover 13 years of experience in public accounting, primarily at Coopers and Lybrand. Ms. LeDoux received her Bachelor of Arts degree inBusiness from the University of Massachusetts and a law degree from Western New England College, School of Law. Employees We are managed by a core group of experienced pharmaceutical executives with a track record of bringing new drugs to market. Tofacilitate advancement of development programs, we also enlist the expertise of associates and advisors with extensive pharmaceuticaldevelopment experience. As of December 31, 2014, we had 50 full-time employees, seven part-time employees, a contracted sales force of 21 salesrepresentatives and 14 long-term contract staff. Three of our employees have M.D.s. We consider our employee relations to be good. Noneof our employees is covered by a collective bargaining agreement. General We were incorporated in the State of Delaware on May 13, 1998. Our registered trademarks include Corcept, Korlym andCORLUX. Corluxinis a registered trademark in the EU; the application for this trademark is pending in the United States. Other servicemarks, trademarks and trade names referred to in this document are the property of their respective owners. Available Information We are subject to the information requirements of the Securities Exchange Act of 1934, as amended, and we therefore file periodicreports, proxy statements and other information with the SEC relating to our business, financial statements and other matters. The reports,proxy statements and other information we file may be inspected and copied at prescribed rates at the SEC’s Public Reference Room, 100 FStreet, N.E., Washington, D.C. 20549, on official business days during the hours of 10:00 A.M. to 3:00 P.M. You may obtain informationon the operation of the SEC’s Public Reference Room by calling the SEC at 1-800-SEC-0330. The SEC also maintains an Internet site thatcontains reports, proxy statements and other information regarding issuers like us that file electronically with the SEC. The address of theSEC’s Internet site is www.sec.gov. For more information about us, please visit our website at www.corcept.com. You may also obtain afree copy of our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reportson the day the reports or amendments are filed with or furnished to the SEC by visiting our website at www.corcept.com. The informationfound on, or otherwise accessible through, our website, is not incorporated information, and does not form a part of, this Form 10-K. 12 ®®®® Table of Contents ITEM 1A. RISK FACTORS An investment in our common stock involves significant risks. You should carefully consider the risks described below and the otherinformation in this Annual Report on Form 10-K, including our financial statements and related notes, before you decide to invest in ourcommon stock. If any of the following risks or uncertainties actually occurs, our business, results of operations or financial conditioncould be materially harmed, the trading price of our common stock could decline and you could lose all or part of your investment. Therisks and uncertainties described below are those that we currently believe may materially affect us; however, they may not be the onlyones that we face. Additional risks and uncertainties of which we are unaware or currently deem immaterial may also become importantfactors that may harm our business. Except as required by law, we undertake no obligations to update any risk factors. Risks Related to the Commercialization of Korlymand Development of Mifepristone and Our Proprietary GR Antagonists We depend heavily on the success of Korlym, which we began to sell in the United States in April 2012. If we are unable to increaserevenues of Korlym to the levels that investors expect, or experience significant delays in doing so, our stock price will likely decline. We anticipate that for the foreseeable future our ability to generate meaningful revenues and achieve profitability will be solelydependent on the successful commercialization of Korlym. Many factors could harm our efforts to commercialize Korlym, including: ·an inability to generate meaningful revenue due to low product usage, inadequate insurance coverage and reimbursement orother factors;·competition from Novartis’s Signifor and from other companies with greater financial, technical and marketing resources thanours;·an inability to manufacture Korlym or the active ingredient in Korlym in commercial quantities and at an acceptable cost;·the cost-effectiveness of Korlym and the availability of third-party insurance coverage and reimbursement, in particular fromgovernment payors such as Medicare and Medicaid, for patients using Korlym;·political concerns relating to other uses of mifepristone, or RU-486, that could limit the market acceptance of Korlym;·negative, inconclusive or otherwise unfavorable results from any post-approval studies we conduct;·previously unknown, serious side effects that may be identified; and·rapid technological change making Korlym obsolete. Even if we commercialize Korlym successfully, we cannot predict the rate at which success will occur. As our current ability to generate revenue is wholly dependent upon the commercialization of Korlym, its rate of sale will directly andmaterially affect our results of operations. There are inherent difficulties in predicting the volumes of Korlym that will be sold, which areheightened by our limited experience commercializing Korlym or other products. Failure of our revenue to meet the expectations ofinvestors could cause our stock price to decline. See also the discussion below under “If our operating and financial performance in anygiven period does not meet the guidance that we provide to the public, estimates published by research analysts or other investorexpectations, our stock price may decline.” Physicians may accept Korlym slowly or may never accept it, which would adversely affect our financial results. Even though the FDA has approved Korlym, physicians may not adopt it as a treatment for their eligible patients. Physicians willprescribe Korlym only if they determine, based on experience, clinical data, side effect profiles and other factors, that it is preferable toother products or treatments currently in use, even if those products are not approved for Cushing’s syndrome. Because Cushing’ssyndrome is rare, most physicians are inexperienced in the care of patients with the illness and it may be difficult to persuade them toprescribe a newer treatment, such as Korlym, even with clinical trial results that suggest it may be a compelling treatment for them toconsider. 13 Table of Contents Other factors that may affect the market acceptance and commercial success of Korlym include:·the effectiveness of Korlym, including any side effects, as compared to alternative treatment methods;·the rate of adoption of Korlym by physicians and by target patient populations;·the possible preference of some physicians for more familiar, long-standing off-label treatments for Cushing’s syndrome or forNovartis’ drug, Signifor, for the treatment of Cushing’s disease;·the cost-effectiveness of Korlym and the availability of third-party insurance coverage and reimbursement for patients usingKorlym;·the product labeling required by the FDA for Korlym;·the extent and success of our efforts to manufacture, commercialize, market, distribute and sell Korlym; and·negative publicity concerning Korlym, RU-486, Mifeprex or mifepristone. The failure of Korlym to achieve market acceptance would prevent us from generating meaningful revenue. The Orphan Drug designation for Korlym may not provide protection from competition. We may face competition from companiesthat attempt to develop mifepristone or other compounds for the treatment of Cushing’s syndrome, which could limit our futurerevenues from the commercialization of Korlym and which could have a negative impact on future revenues from thecommercialization of Korlym for any indication. These companies may have significantly more resources than we do. Although we have received Orphan Drug designation in both the United States and the EU, we cannot be assured that we willrecognize the potential benefits of these designations. Even after an orphan drug is approved for its orphan indication, the FDA or EMAcan subsequently approve a different drug for the same condition if it concludes that the later drug is safer, more effective or makes a majorcontribution to patient care. In addition, the FDA or EMA may, during the orphan drug exclusivity period, approve the same drug for adifferent indication or different drug for the same indication. Upon expiration of the orphan drug exclusivity period, we may be subject tocompetition from manufacturers offering a generic form of mifepristone at a lower price, in which case our business could be harmed. Notwithstanding Korlym’s Orphan Drug designation in both the United States and the EU, in 2012 Novartis received approval inboth jurisdictions to market its somatostatin analogue Signifor for adult patients with Cushing’s disease (a subset of Cushing’s syndromethat afflicts approximately 70 percent of all Cushing’s syndrome patients) for whom pituitary surgery is not an option or has not beencurative. Novartis also announced that is undertaking an investigational study of an experimental compound (LC1699) to determinewhether it can safely reduce the level of urinary free cortisol in patients with Cushing’s disease and to examine the compound’s safety andefficacy. Novartis has substantially more resources and experience than we do and may provide significant competition. We are aware that Laboratoire HRA Pharma has received Orphan Drug designation in the United States and the EU for the use ofmifepristone to treat a subtype of Cushing’s syndrome. HRA had begun a Phase 2 clinical trial in Europe and the United States for thisindication, which has been terminated. We are also aware that Exelgyn Laboratories, which operates as a subsidiary of Medi Challenge(Pty) Ltd., received Orphan Drug designation for mifepristone to treat Cushing’s syndrome in the EU, but it has stated that it has not yetconducted any clinical trials. If another drug with mifepristone as its active ingredient is approved in the EU for Cushing’s syndrome before our drug, we will notreceive the ten years of marketing exclusivity from the date of drug approval in the EU and other potential benefits. If we cannot continue to obtain acceptable prices or adequate coverage and reimbursement for Korlym from third-party payors, wewill be unable to generate significant revenues. The commercial success of our medications in both domestic and international markets depends on whether third-party coverage andreimbursement is available for them. Government payors, including Medicare and Medicaid, health maintenance organizations and otherthird-party payors are increasingly attempting to contain healthcare costs by limiting both coverage and the level of reimbursement of newmedicines, and, as a result, they may not cover or provide adequate payment for our medications. Our near-term dependence on thecommercial success of Korlym makes us particularly susceptible to cost containment efforts. Accordingly, even though Korlym has beenapproved for commercial sale, unless government and other third-party payors continue to provide adequate and timely coverage andreimbursement, physicians may not prescribe it and patients may not purchase it. In addition, meaningful delays in insurance coverage forindividual patients may increase our costs and reduce our revenues. Further, we may need to obtain approvals from hospital formulariesbefore Korlym can be covered for in-patient treatment. Failure to obtain such approvals will reduce the level of revenues that we are able toattain. 14 ®Table of Contents In some foreign markets, pricing and profitability of prescription pharmaceuticals are subject to government control. In the UnitedStates, we expect that there will continue to be federal and state proposals for similar controls. Also, the trends toward managed health carein the United States and recent laws and legislation intended to reduce the cost of government insurance programs could significantlyinfluence the purchase of health care services and products and may result in lower prices for our products or the exclusion of such productsfrom reimbursement programs. The PPACA, which was passed in 2010, included, among other things, the following measures:·annual, non-deductible fees on any entity that manufactures or imports certain prescription drugs and biologics;·increases in Medicaid rebates owed by manufacturers under the Medicaid Drug Rebate Program for both branded and genericdrugs;·expansion of eligibility criteria for Medicaid programs by, among other things, allowing states to offer Medicaid coverage toadditional individuals and by adding new mandatory eligibility categories for certain individuals with income at or below133% of the federal poverty level, thereby potentially increasing a manufacturer’s Medicaid rebate liability;·expansion of access to commercial health insurance coverage through new state-based health insurance marketplaces, orexchanges;·a new Patient-Centered Outcomes Research Institute to oversee, identify priorities in and conduct comparative clinical research;·new requirements for manufacturers to discount drug prices to eligible patients by 50 percent at the pharmacy level and for mailorder services in order for their outpatient drugs to be covered under Medicare Part D;·an increase in the number of entities eligible for discounts under the Public Health Service pharmaceutical pricing program; and·establishment of a licensure framework for follow-on biologic products. The PPACA provisions on comparative clinical effectiveness research extended the initiatives of the American Recovery andReinvestment Act of 2009, also known as the stimulus package, which included $1.1 billion in funding to study the comparativeeffectiveness of health care treatments. This stimulus funding was designated for, among other things, conducting, supporting orsynthesizing research that compares and evaluates the risks and benefits, clinical outcomes, effectiveness and appropriateness ofproducts. The PPACA also appropriated additional funding to comparative clinical effectiveness research. Although Congress hasindicated that this funding is intended to improve the quality of health care, it remains unclear how the research will impact currentMedicare coverage and reimbursement or how new information will influence other third-party payor policies. It also is unclear what thefull impact of PPACA’s extension of coverage to previously uninsured individuals will be on the demand for our products. In addition, other legislative changes have been proposed and adopted in the United States since the PPACA was enacted. In August2011, the Budget Control Act of 2011 among other things, created the Joint Select Committee on Deficit Reduction to recommendproposals in spending reductions to Congress. The Joint Select Committee did not achieve its targeted deficit reduction of at least $1.2trillion for the years 2013 through 2021, triggering the legislation’s automatic reduction to several government programs. This includesaggregate reductions to Medicare payments to providers of two percent per fiscal year, which went into effect on April 1, 2013 and, due tosubsequent legislative amendments to the statute, will stay in effect through 2024 unless additional Congressional action is taken. OnJanuary 2, 2013, President Obama signed into law the American Taxpayer Relief Act of 2012, or the ATRA, which, among other things,further reduced Medicare payments to several providers, including hospitals, imaging centers and cancer treatment centers, and increasedthe statute of limitations period for the government to recover overpayments to providers from three to five years. These new laws and the regulations and policies implementing them, as well as other healthcare reform measures that may be adoptedin the future, may have a material adverse effect on our industry generally and on our ability to successfully develop and commercialize ourproducts. We will need to continue to develop our medical education, sales and marketing capabilities to successfully commercialize Korlymand our other proprietary, selective GR antagonists. To achieve commercial success for any approved product, we must either develop sales and marketing capabilities internally or enterinto arrangements with third parties to market and sell our current and future products, and we may not be successful in doing so. Wecontinue to hire experienced field and internal personnel to commercialize Korlym in the United States, which is expensive and timeconsuming. Any failure or delay in the development or failure to maintain effectively our internal capabilities for the marketing and salesof Korlym would adversely impact the commercialization of the product. If our efforts to develop an internal commercial marketing andsales team are not successful, cost-effective and timely, we may not achieve profitability. 15 Table of Contents We will need to increase the size of our organization, and we may experience difficulties in managing growth. We expect that the further development of our commercial organization and the likely future expansion of our research anddevelopment efforts will strain our administrative, operational and management resources. Future growth will impose significant addedresponsibilities on members of management, including the need to identify, recruit, maintain and integrate additional employees. To date,we have relied on a small management team, including a number of part-time contributors. Our future financial performance and our abilityto compete effectively will depend, in part, on our ability to manage growth effectively. To that end, we must be able to:·integrate additional management, clinical development, administrative and sales and marketing personnel;·expand the size and composition of our management team;·develop our administrative, accounting and management information systems and controls;·hire and train additional qualified personnel;·manage our sales and marketing efforts effectively;·manage our supply chain effectively;·manage our clinical trials effectively; and·manage our research and development efforts effectively. We may not be able to accomplish these tasks, and our failure to accomplish any of them could harm our business. Public perception of the active ingredient in Korlym, mifepristone (also known as “RU-486”), may limit our ability to market and sellKorlym. The active ingredient in Korlym, mifepristone (RU-486), is approved by the FDA in another drug for the termination of earlypregnancy. As a result, mifepristone has been and continues to be the subject of considerable ethical and political debate in the UnitedStates and elsewhere. Public perception of mifepristone may limit our ability to engage alternative manufacturers and may limit thecommercial acceptance of Korlym by patients and physicians. Even though we have taken measures to minimize the likelihood of theprescribing of Korlym to a pregnant woman, physicians may choose not to prescribe Korlym to a woman simply to avoid any risk ofunintentionally terminating a pregnancy. We have taken measures to control the distribution of Korlym to reduce the potential fordiversion and this controlled distribution may negatively impact sales of Korlym. We have no manufacturing capabilities and we currently depend on third parties to manufacture the active ingredient and the tabletsfor Korlym, both of which are single-source suppliers. If these suppliers are unable or unwilling to continue manufacturing Korlymand we are unable to contract quickly with alternative sources, or if these third-party manufacturers fail to comply with FDAregulations or otherwise fail to meet our requirements, our business will be harmed. We currently have no experience in, and we do not own facilities for, nor do we plan to develop facilities for, manufacturing anyproducts. We depend on a single-source, third-party contract manufacturer, PCAS, to supply the active pharmaceutical ingredient, or API,in Korlym. We entered into a long-term agreement with PCAS in March 2014. We also depend on a single-source, third-party contractmanufacturer, AAI, to produce Korlym tablets. In April 2014, we entered into a long-term agreement with AAI. If either of thesemanufacturers is unable or unwilling to meet our future demands required, we may not be able to manufacture our product in a timelymanner. Our current arrangements with these manufacturers are terminable by such manufacturers, subject to certain notice provisions. Ifwe are unable to obtain the API or Korlym tablets from our contract manufacturers, we may not be able to manufacture our requiredquantities or identify alternate manufacturers of mifepristone or Korlym tablets in a timely manner or on reasonable terms, if at all, whichwould harm our business. In addition, we expect to use third-party manufacturers and suppliers if and when our other product candidatesare approved. The facilities used by our contract manufacturers to manufacture our products must be approved by the FDA pursuant toinspections. We do not control the manufacturing processes of, and are completely dependent on, our contract manufacturing partners forcompliance with the regulatory requirements, known as current good manufacturing practices, or cGMPs. If our contract manufacturerscannot successfully manufacture material that conforms to our specifications and the strict regulatory requirements of the FDA or others,they will not be able to secure and/or maintain regulatory approval for their manufacturing facilities. In addition, we have no control overthe ability of our contract manufacturers to maintain adequate quality control, quality assurance and qualified personnel. If the FDA or acomparable foreign regulatory authority does not approve these facilities for the manufacture of our products or if it withdraws any suchapproval in the future, we may need to find alternative manufacturing facilities, which would significantly impact our ability to develop,obtain regulatory approval for or market our products. In addition, sanctions could be imposed on us, including fines, injunctions, civilpenalties, failure of regulatory authorities to grant marketing approval of our product candidates, delays, suspension or withdrawal ofapprovals, seizures or recalls of products, operating restrictions and criminal 16 Table of Contents prosecutions, any of which could harm our business. If our suppliers fail to manufacture tablets on a timely basis in the quantities that werequire, or fail to maintain manufacturing capabilities that meet FDA standards, we would likely experience a lengthy delay in ourmanufacturing processes. If we or others identify previously unknown, serious side effects of mifepristone, we may be required to perform lengthy additionalclinical trials, change the labeling of Korlym or withdraw it from the market, any of which would hinder or preclude our ability togenerate revenues. The FDA’s approval of Korlym requires that we conduct a study of the interactions between Korlym and ketoconazole, an anti-fungalagent sometimes used to treat patients with Cushing’s syndrome. It also requires us to study drug utilization to better characterize thereporting rates of adverse events associated with the long-term use of Korlym. If we or others identify previously unknown, serious sideeffects of mifepristone:·regulatory authorities may withdraw their approvals;·we may be required to conduct additional clinical trials, make changes in labeling, implement changes to or obtain re-approvalsof our manufacturing facilities;·we may experience a significant drop in the sales of Korlym;·our reputation in the marketplace may suffer; and·we may become the target of lawsuits, including class action lawsuits. Any of these events could harm or prevent sales of the affected products or could increase the costs and expenses of commercializingand marketing Korlym. We may have substantial exposure to product liability claims and may not have adequate insurance to cover those claims. We may be subject to product liability or other claims based on allegations that the use of our products has resulted in adverse effectsor that our product candidates are not effective, whether by participants in our clinical trials for Korlym or other product candidates, or bypatients using Korlym. A product liability claim may damage our reputation by raising questions about Korlym or any of our productcandidates’ safety or efficacy and could limit our ability to sell a product by preventing or interfering with product commercialization. Insome cases, less common adverse effects of a pharmaceutical product are not known until long after the FDA approves the product formarketing. The active ingredient in Korlym is used to terminate pregnancy. Therefore, clinicians using the medicine in our clinical trialsand physicians prescribing the medicine to women with childbearing potential must take necessary and strict precautions to ensure that themedicine is not administered to pregnant women. The failure to observe these precautions could result in significant product claims. We have only limited product liability insurance coverage, with limits that we believe to be customary for a company beginning tocommercialize its first pharmaceutical product. We intend to expand our product liability insurance coverage to any product candidates forwhich we obtain marketing approval. However, this insurance may be prohibitively expensive or may not fully cover our potentialliabilities. Our inability to obtain adequate insurance coverage at an acceptable cost could prevent or inhibit the commercialization ofKorlym or any of our product candidates, or result in meaningful underinsured or uninsured liability. Defending a lawsuit could be costlyand significantly divert management’s attention from conducting our business. If a third party successfully sues us for any injury caused byour product candidates, our liability could exceed our total assets. Even if we receive regulatory approval for our product candidates, we will be subject to ongoing and continued regulatory review, andif we are unable to maintain regulatory approval of Korlym, or if we fail to comply with regulatory requirements, we will be unable togenerate revenue or may be subject to penalties and our business will be harmed. Even after we obtain U.S. regulatory approval for a product, the FDA may still impose significant restrictions on the approvedindicated uses for which the product may be marketed or on the conditions of approval. For example, a product’s approval may containrequirements for potentially costly post-approval studies and surveillance, including Phase 4 clinical trials, to monitor the safety andefficacy of the product. The FDA’s approval of Korlym was subject to limitations on the indicated uses for which the product may bemarketed and requirements for post-marketing follow-up studies and information reporting. In addition, the FDA’s approval of Korlymrequires that we conduct a study of the interactions between Korlym and ketoconazole, an anti-fungal agent sometimes used to treatpatients with Cushing’s syndrome. It also requires us to conduct a drug utilization study to better characterize the reporting rates of adverseevents associated with the long-term use of Korlym. We are subject to ongoing obligations and continued regulatory review by the FDA and other regulatory authorities in the UnitedStates and other countries with respect to the research, testing, manufacturing, labeling, distribution, adverse event reporting, storage,selling, advertising, promotion, recordkeeping and marketing of products. These requirements include submissions of safety and otherpost-marketing information and reports, annual updates on manufacturing activities and continued compliance with current 17 Table of Contents good manufacturing practices, or cGMPs, and current good clinical practices, or cGCPs, for any clinical trials that we conduct post-approval. cGMPs and cGCPs are regulations and guidelines enforced by the FDA and comparable foreign regulatory authorities throughperiodic inspections of manufacturing sites, trial sponsors, clinical investigators and clinical sites. Later discovery of previously unknownproblems with a product, including adverse events of unanticipated severity or frequency, or with our third-party manufacturers ormanufacturing processes, or failure to comply with FDA regulations and other applicable foreign and U.S. regulatory requirements mayresult in, among other things, warning letters, civil and criminal penalties, injunctions, holds on clinical trials, product seizure or detention,refusal to permit the import or export of products, restrictions on product marketing, withdrawal of the product from the market, voluntaryor mandatory product recalls, total or partial suspension of production, refusal to approve pending NDAs or supplements to approvedNDAs, and suspension or revocation of product approvals. The FDA’s policies may change and additional governmental regulations may be enacted that could prevent, limit or delayregulatory approval of our product candidates. If we are slow or unable to adapt to changes in existing requirements or the adoption of newrequirements or policies, or if we are not able to maintain regulatory compliance, we may place at risk the FDA marketing approval forKorlym and any other marketing approval that we may obtain, which would adversely affect our business, prospects and ability to achieveor sustain profitability. The sale of our products is subject to regulatory approvals, and our business is subject to extensive regulatory requirements, and if weare unable to obtain regulatory approval for future product candidates, including mifepristone for the treatment of triple-negativebreast cancer, we will be limited in our ability to commercialize such product candidates and our business will be harmed. We are not permitted to market or promote any of our product candidates before we receive regulatory approval from the FDA orcomparable foreign regulatory authorities and, while we have received FDA marketing approval for Korlym, we may be unable to maintainsuch approval and we may never receive such regulatory approval for any of our product candidates. Obtaining regulatory approval of anew drug is an uncertain, lengthy and expensive process, and success is never guaranteed. Despite the time, resources and effort expended,failure can occur at any stage. In order to receive approval from the FDA for each product candidate, we must demonstrate that the new drugproduct is safe and effective for its intended use and that our manufacturing processes for the product candidate comply with the FDA’scGMPs. cGMPs include requirements related to production processes, quality control and assurance, and recordkeeping. The FDA hassubstantial discretion in the approval process for human medicines. The FDA may require substantial additional clinical testing or find ourdrug products do not satisfy the standards for approval. Our inability or the inability of our suppliers to comply with applicable FDA andother regulatory requirements can result in, among other things, delays in or denials of new product approvals, warning letters, fines,consent decrees restricting or suspending manufacturing operations, injunctions, civil penalties, recall or seizure of products, total or partialsuspension of sales, and/or criminal prosecution. Any of these or other regulatory actions could materially adversely affect our businessand our financial condition. Future governmental action or changes in FDA law, policy or personnel may also result in delays or rejection of an NDA in the UnitedStates. In addition, because the only other currently FDA-approved use of mifepristone is the termination of pregnancy, we expect that thelabel for mifepristone for any indication will include, as Korlym’s does, some limitations, including a so-called “black-box” warning that itshould not be used by pregnant women or women seeking to become pregnant. If we receive regulatory approval for our future product candidates, including mifepristone for the treatment of triple-negative breastcancer, we will be subject to ongoing FDA obligations and continued regulatory oversight and review, such as continued safety reportingrequirements; and we may also be subject to additional FDA post-marketing restrictions and obligations. If we are not able to maintainregulatory compliance, we may not be permitted to market our product candidates and/or may be subject to product recalls or seizures. Any regulatory approvals that we receive for our future product candidates may also be subject to limitations on the indicated uses forwhich the medicine may be marketed or contain requirements for potentially costly post-marketing follow-up studies. In addition, if theFDA approves any of our product candidates, we will be subject to ongoing and continuing regulatory requirements. See also thediscussion above under “Even if we receive regulatory approval for our product candidates, we will be subject to ongoing and continuedregulatory review, and if we are unable to maintain regulatory approval of Korlym, or if we fail to comply with regulatory requirements, wewill be unable to generate revenue or may be subject to penalties and our business will be harmed.” If we market products in a manner that violates FDA regulations or health care fraud and abuse laws, we may be subject to civil orcriminal penalties. In the United States, we are subject to FDA regulations governing the promotion of health care products. Although physicians arepermitted, based on their medical judgment, to prescribe drugs for indications other than those approved by the FDA, manufacturers areprohibited from promoting their products for such “off-label” uses. In the United States, we are marketing Korlym for treatment ofhyperglycemia secondary to hypercortisolism in adult patients with endogenous Cushing’s syndrome who have type 2 diabetes mellitus orglucose intolerance and have failed surgery or are not candidates for surgery and provide promotional materials 18 Table of Contents and training programs to physicians regarding the use of Korlym for this indication. Although we believe our marketing materials andtraining programs for physicians do not constitute “off-label” promotion of Korlym, the FDA may disagree. If the FDA determines that ourpromotional materials, training or other activities by our employees or agents constitute “off-label” promotion of Korlym, it could requestthat we modify our training or promotional materials or other activities or subject us to regulatory enforcement actions, including theissuance of a warning letter, injunction, seizure, civil fine and criminal penalties. It is also possible that other federal or state enforcementauthorities might take action if they believe that the alleged improper promotion led to the submission and payment of claims for anunapproved use, which could result in significant fines or penalties under other statutory authorities, such as laws prohibiting false claimsfor reimbursement. Even if it is later determined that we are not in violation of these laws, we may be faced with negative publicity, incursignificant expenses defending our position and have to divert significant management resources from other matters. In addition, there are health care fraud and abuse regulations and enforcement by both the federal government and the states in whichwe conduct our business. The laws that may affect our ability to operate include:·the federal Anti-Kickback Statute, which prohibits, among other things, persons from knowingly and willfully soliciting,receiving, offering or paying remuneration, directly or indirectly, in exchange for or to induce either the referral of an individualfor, or the purchase, order or recommendation of, any good or service for which payment may be made under federal health careprograms such as the Medicare and Medicaid programs;·federal false claims laws, which prohibit any person from knowingly presenting, or causing to be presented, a false claim forpayment to the federal government, or knowingly making, or causing to be made, a false statement to get a false claimpaid. Pharmaceutical companies have been prosecuted under these laws for a variety of promotional and marketing activities,such as allegedly providing free product to or entering into “sham” consulting arrangements with customers to induce suchcustomers to purchase, order or recommend the company’s products in violation of the Anti-Kickback Statute and federal falseclaims laws and regulations; reporting to pricing services inflated average wholesale prices that were then used by certaingovernmental programs to set reimbursement rates; engaging in the promotion of “off-label” uses that caused customers tosubmit claims to and obtain reimbursement from governmental payors for non-covered “off-label” uses; and submitting inflatedbest price information to the Medicaid Drug Rebate Program;·the federal Health Insurance Portability and Accountability Act of 1996 (HIPAA), which created federal criminal laws thatprohibit executing a scheme to defraud any health care benefit program or making false statements relating to health carematters;·federal “sunshine” laws that require transparency regarding financial arrangements with health care providers, such as thereporting and disclosure requirements imposed by the PPACA on drug manufacturers regarding any “transfer of value” made ordistributed to prescribers and other health care providers, and ownership or investment interests held by physicians and theirimmediate family members. The period between August 1, 2013 and December 31, 2013 was the first reporting period, andmanufacturers were required to report aggregate payment data by March 31, 2014, and were required to report detailed paymentdata and submit legal attestation to the accuracy of such data by June 30, 2014. Payment data for the first reporting period wasreleased to the public on September 30, 2014. Thereafter, manufacturers must submit reports by the 90 day of each calendaryear;·HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act of 2009 (HITECH) and theirrespective implementing regulations, which impose obligations on covered healthcare providers, health plans, and healthcareclearinghouses, as well as their business associates that create, receive, maintain or transmit individually identifiable healthinformation for or on behalf of a covered entity, with respect to safeguarding the privacy, security and transmission ofindividually identifiable health information; and·state law equivalents of each of the above federal laws, such as anti-kickback and false claims laws which may apply to items orservices reimbursed by any third-party payor, including commercial insurers; state laws that require pharmaceutical companiesto comply with the pharmaceutical industry’s voluntary compliance guidelines and the relevant compliance guidancepromulgated by the federal government or otherwise restrict payments that may be made to healthcare providers; state laws thatrequire drug manufacturers to report information related to payments and other transfers of value to physicians and otherhealthcare providers or marketing expenditures; and state laws governing the privacy and security of health information incertain circumstances, many of which differ from each other in significant ways and often are not preempted by HIPAA, thuscomplicating compliance efforts. The risk of our being found in violation of these laws and regulations is increased by the fact that many of them have not been fullyinterpreted by the regulatory authorities or the courts, and their provisions are open to a variety of interpretations. Moreover, recent healthcare reform legislation has strengthened these laws. For example, the PPACA, among other things, amended the intent requirement of thefederal anti-kickback and criminal health care fraud statutes; a person or entity no longer needs to have actual knowledge of these statutesor specific intent to violate them. In addition, the PPACA provided that the government may assert that a claim including items or servicesresulting from a violation of the federal anti-kickback statute constitutes a false or fraudulent claim for purposes of the false claims statutes. If our operations are found to be in violation of any of the laws described above or any other governmental regulations that apply to us, wemay be subject to penalties, including civil and criminal penalties, damages, fines, 19 thTable of Contents exclusion from governmental health care programs, and the curtailment or restructuring of our operations, any of which could adverselyaffect our ability to operate our business and our financial results. Clinical drug development involves a lengthy and expensive process with an uncertain outcome, and results of earlier studies andtrials may not be predictive of future trial results. Clinical development is a long, expensive and uncertain process, and data obtained from clinical trials and supportive studies aresusceptible to varying interpretations, which could delay, limit or prevent regulatory approval. The results from early clinical trials may notbe predictive of results eventually obtained in later clinical trials. Product candidates in later stages of clinical trials may fail to show thedesired safety and efficacy traits despite having progressed through preclinical studies and initial clinical trials. A number of companies inthe biopharmaceutical industry have suffered significant setbacks in advanced clinical trials due to lack of efficacy or adverse safety profileof their medication candidate, despite promising results in earlier trials. Clinical trials may not demonstrate sufficient safety and efficacy toobtain regulatory approval. For example, in May 2014, we discontinued our Phase 3 study of mifepristone for treatment of psychoticdepression (Study 14) after receiving the report of a data monitoring committee that the trial was unlikely to reach its primary endpointsbased on an analysis of interim data. Our ongoing Phase 1 study of mifepristone in combination with chemotherapy to treat triple-negative breast cancer is too small todemonstrate definitively the safety or efficacy of mifepristone for that indication. Even if the trial generates positive results, those resultswould have to be confirmed in at least one substantially larger, more expensive, and lengthier trial if we are to have sufficient basis forseeking regulatory approval. Moreover, the commencement and completion of clinical trials may be delayed by many factors that are beyond our control,including:·delays obtaining regulatory approval to commence a trial;·reaching agreement on acceptable terms with contract research organizations, or CROs, and clinical trial sites;·obtaining institutional review board, or IRB, approval at each site;·slower than anticipated patient enrollment;·scheduling conflicts with participating clinicians and clinical institutions;·lack of funding;·negative or inconclusive results;·patient noncompliance with the protocol;·adverse medical events or side effects among patients during the clinical trials;·negative or problematic FDA inspections of our clinical operations or manufacturing operations; and·real or perceived lack of effectiveness or safety of mifepristone. We could encounter delays if a clinical trial is suspended or terminated by us, the IRBs of the clinical trial sites in which such trialsare being conducted, by the Data Safety Monitoring Board for such trial or by the FDA or other regulatory authorities. Such authoritiesmay impose such a suspension or termination due to a number of factors, including failure to conduct the clinical trial in accordance withregulatory requirements or our clinical protocols, inspection of the clinical trial operations or trial site by the FDA or other regulatoryauthorities resulting in the imposition of a clinical hold, unforeseen safety issues or adverse side effects, failure to demonstrate a benefitfrom using a drug, changes in governmental regulations or administrative actions or lack of adequate funding to continue the clinical trial. Over the course of clinical development of any product candidate, we may decide, or the FDA or other regulatory authorities mayrequire us, to pursue clinical or preclinical studies in addition to those we had initially anticipated. Additional trials or studies may requireadditional funding, the availability of which is not assured. Also, it is possible that additional trials or studies that we decide are necessaryor desirable will delay or prevent the completion of our development programs. Even if we are able to conduct all of the clinical trials andsupportive studies that we consider appropriate, we may never receive regulatory approval to market mifepristone for the treatment of triple-negative breast cancer or any other product candidates or indications. 20 Table of Contents We depend on third parties to conduct and manage many of our clinical trials and to perform related data collection and analysis and,if these third parties do not successfully carry out their contractual duties or meet expected timelines, we may face costs and delays thatmay prevent or delay us from obtaining regulatory approval for or commercializing our product candidates, which couldsubstantially harm our business. We rely on clinical investigators and clinical sites to enroll patients and other third parties such as clinical research organizations(CROs) to manage many of our trials and to perform related data collection and analysis. We control only certain aspects of these thirdparties’ activities. Nevertheless, we are responsible for ensuring that each of our studies is conducted in accordance with the applicableprotocol, legal, regulatory and scientific standards, and our reliance on third parties does not relieve us of our regulatoryresponsibilities. We and these third parties are required to comply with cGCPs. If we or any of the third parties working on or conductingour trials fail to comply with applicable cGCPs, the clinical data generated in our clinical trials may be deemed unreliable and the FDA orcomparable foreign regulatory authorities may require us to perform additional clinical trials before approval of our marketing applications,if at all. We cannot assure you that upon inspection by a given regulatory authority, such regulatory authority will determine that any ofour clinical trials complies with cGCP requirements. In addition, our clinical trials must be conducted with product produced under cGMPregulations. Our failure to comply with these regulations may require us to repeat clinical trials, which would delay the regulatory approvalprocess. Moreover, we may not be able to control the timing of identification and selection of appropriate sites for our planned trials andthe amount and timing of resources that the clinical sites that conduct the clinical testing may devote to our clinical trials. If our clinicalinvestigators and clinical sites fail to enroll a sufficient number of patients in our clinical trials or fail to enroll them on our plannedschedules, we will be unable to complete our trials or to complete them as planned, which could delay or prevent us from completing theclinical development of mifepristone for the treatment of triple-negative breast cancer or other development programs. We have agreements with the CROs that are conducting our Phase 1/2 trial of mifepristone for the treatment of triple-negative breastcancer and Phase 1 trial of our selective GR antagonist, CORT 125134, to supervise and monitor clinical site performance and to performinvestigator supervision, data collection and analysis for these trials. The conduct of future clinical trials may also be conducted throughthe use of CROs and third party clinical sites. We may not be able to maintain relationships with these or other CROs or with the clinicalinvestigators and the clinical sites through the completion of all trial activities without delays in anticipated timing of trial activities orexcessive expenditures. If any of our relationships with CROs or other third parties terminates, we may not be able to enter intoarrangements with alternative CROs or third parties on commercially reasonable terms, or at all. If these CROs, clinical investigators,clinical sites or other third parties do not carry out their contractual duties or obligations or fail to meet expected deadlines, or if they needto be replaced or if the quality or accuracy of the clinical data they obtain is compromised due to their failure to adhere to our clinicalprotocols or regulatory requirements or for other reasons, our clinical trials may be extended, delayed or terminated and we may be unableto obtain regulatory approval for, or successfully commercialize, mifepristone for the treatment of triple-negative breast cancer,CORT125134 or any of our other next-generation selective GR antagonists. Failure to obtain regulatory approval in foreign jurisdictions will prevent us from commercializing Korlym and our other productcandidates abroad. We may seek to commercialize our products and product candidates in international markets with the help of one or more partners oron our own. Outside the United States, we may commercialize a product only if we receive a marketing authorization and, in many cases,pricing approval, from the appropriate regulatory authorities, whose approval processes include all of the risks associated with the FDAapproval process, and, in some cases, additional risks. The approval procedure varies among countries and can involve additional testing,and the time required to obtain approval may differ from that required to obtain FDA approval. Other than seeking and receiving OrphanDrug designation in the EU and the submission of our MAA to the EMA in October 2013, we have not taken any actions to obtain foreignapprovals. We may not develop our product candidates in the clinic in order to obtain foreign regulatory approvals on a timely basis, if atall. Approval by the FDA does not ensure approval by regulatory authorities in other countries, and approval by one foreign regulatoryauthority does not ensure approval by regulatory authorities in other foreign countries or by the FDA, but a failure or delay in obtainingregulatory approval in one country may have a negative effect on the regulatory process in others. We may not be able to file for regulatoryapprovals and may not receive necessary approvals to commercialize our product candidates in any foreign market. We face competition from companies with substantial financial, technical and marketing resources, which could limit our futurerevenues from the commercialization of mifepristone for the treatment of triple-negative breast cancer or for other indications. The biotechnology and pharmaceutical industries are intensely competitive and subject to rapid and significant technologicalchange. Our present and potential competitors include major pharmaceutical companies such as the makers of the drugs identified above,as well as specialized pharmaceutical firms, universities and public and private research institutions. Moreover, we expect competition tointensify as technical advances are made. These competitors, either alone or with collaborative parties, may succeed with the developmentand commercialization of medicinal products that are superior to and more cost-effective than mifepristone. 21 Table of Contents Many of our competitors and related private and public research and academic institutions have greater experience, more financial andmarketing resources and larger research and development staffs than we do. In addition, many of these competitors, either alone or togetherwith their collaborative partners, have significantly greater experience than we do in developing human medicines, obtaining regulatoryapprovals, manufacturing and commercializing products. Accordingly, mifepristone may not be an effective competitor against established treatments and our present or potential competitorsmay succeed in developing medicinal products that are superior to mifepristone or render mifepristone obsolete or non-competitive. If weare unable to establish mifepristone as a superior and cost-effective treatment for triple-negative breast cancer, or any future use, we may beunable to generate the revenues necessary to support our business. Our efforts to discover, develop and commercialize new product candidates beyond Korlym for Cushings syndrome are at a veryearly stage. If we fail to identify and develop additional uses for GR antagonists, we may be unable to market additional products. To develop additional potential sources of revenue, we believe that we must identify and develop additional product candidates ornew therapeutic uses for mifepristone. We own or have exclusively licensed issued U.S. patents covering the use of GR antagonists to treattriple-negative breast cancer, mental disorders by optimizing mifepristone levels in plasma serum, mild cognitive impairment, weight gaindue to treatment with antipsychotic medication, stress disorders, early dementia, delirium, gastroesophageal reflux disease, Down’sSyndrome, catatonia, psychosis associated with cocaine addiction, psychosis associated with Interferon-alpha therapy, migraine headaches,and to increase the therapeutic response to ECT, combination steroid and GR antagonist therapy, the treatment of neurological damage inpremature infants and the treatment of psychotic depression. We have three U.S. method of use patent applications pending covering GRantagonists for the treatment of patients suffering from mental disorders by optimizing mifepristone absorption, and for the treatment ofmuscular dystrophy and amyotrophic lateral sclerosis (ALS). In addition, we own eight U.S. composition of matter patents coveringspecific GR antagonists. We have also filed patent applications in the major international markets. The use of GR antagonists may not be effective to treat these conditions or any other indications. Moreover, we could discover thatthe use of GR antagonists in these patient populations has unacceptable side effects or is otherwise not safe. Due to the risks of efficacyand side effects inherent in developing novel compounds, we are likely to enter multiple compounds into development, which wouldincrease our rate of spending with no assurance that we will be successful in developing new drugs that are safe and effective. In addition, we may not develop or continue to develop product candidates for any of the indications or compounds covered by ourpatents and patent applications. Typically, there is a high rate of attrition for product candidates in preclinical and clinical trials, and ourproduct development efforts may not lead to commercially viable products. For example, although we plan to advance new compounds tothe clinic, we may fail to do so. We may elect to enter into collaboration arrangements with respect to one or more of our product candidates. If we do enter into suchan arrangement, we would be dependent on a collaborative partner for the success of the product candidates developed under thearrangement. Any future collaborative partner may fail to successfully develop or commercialize a product candidate under a collaborativearrangement. We only have significant clinical experience with mifepristone and we may determine that mifepristone is not desirable for uses otherthan for the treatment of Cushing’s syndrome and, potentially, triple-negative breast cancer. For example, we do not intend to developmifepristone for mitigation of the weight gain associated with the use of Zyprexa, Risperdal or other atypical antipsychotics, even thoughwe have reported positive results in the proof of concept studies. We may pursue other GR antagonists for this use. The compoundsdeveloped pursuant to our early clinical, preclinical and discovery research programs may fail to become viable product candidatesregardless of the resources we may dedicate to the program. Even if product candidates are identified, we may abandon furtherdevelopment efforts before we reach clinical trials or after expending significant expense and time conducting clinical trials due tofinancial constraints, concerns over the safety or efficacy of the product candidates, manufacturing difficulties or other reasons. Moreover,governmental authorities may enact new legislation or regulations that could limit or restrict our development efforts. If we are unable tosuccessfully discover and commercialize new uses for GR antagonists, we may be unable to generate sufficient revenue to support ouroperations. If we lose our key personnel or are unable to attract and retain additional skilled personnel, we may be unable to pursue our productdevelopment and commercialization efforts. Our ability to operate successfully and manage our potential future growth depends significantly upon retaining key research,technical, sales, marketing, managerial and financial personnel, and attracting and retaining additional highly qualified personnel in theseareas. For example, we do not currently employ a Chief Medical Officer to manage our clinical development efforts, although our efforts tohire such an executive are ongoing. We depend substantially on the principal members of our management and scientific staff. We do nothave agreements with any of our executive officers that provide for their continued employment with us or 22 Table of Contents employment insurance covering any of our key personnel. Any officer or employee can terminate his or her relationship with us at any timeand work for one of our competitors. The loss of these key individuals could result in competitive harm because we could experiencedelays in our product research, development and commercialization efforts without their expertise. We face intense competition for qualified personnel from numerous companies, as well as universities and nonprofit researchorganizations in the highly competitive San Francisco Bay Area. Although we believe that we have been successful in attracting andretaining qualified personnel to date, we may not be able to attract and retain sufficient qualified personnel in the future. The inability toattract and retain these personnel could result in delays in the research, development and commercialization of our potential products. Rapid technological change could make our product and product candidates obsolete. Pharmaceutical technologies have undergone rapid and significant change and we expect that they will continue to do so. Our futurewill depend in large part on our ability to maintain a competitive position with respect to these technologies. Korlym and any products andprocesses that we develop may become obsolete or uneconomical before we recover any or all expenses incurred in connection with theirdevelopment. Rapid technological change could make Korlym and our product candidates obsolete or uneconomical, which couldmaterially adversely affect our business, financial condition and results of operations. The occurrence of a catastrophic disaster or other similar events could cause damage to our own or our manufacturers’ facilities andequipment, which could require us to cease or curtail operations. Because our executive offices are located in the San Francisco Bay Area and some of our current manufacturers are also located inearthquake-prone areas, our business is vulnerable to damage from various types of disasters or other similarly disruptive events, includingearthquake, fire, flood, power loss and communications failures. In addition, political considerations relating to mifepristone may put usand our manufacturers at increased risk for terrorist attacks, protests or other disruptive events. If any disaster or other similar event were tooccur, we may not be able to operate our business and our manufacturers may not be able to produce Korlym or our product candidates. Ourinsurance may not be adequate to cover, and our insurance policies may exclude coverage for, our losses resulting from disasters or otherbusiness interruptions. We rely significantly on information technology and any failure, inadequacy, interruption or security lapse of that technology,including any cyber security incidents, could harm our ability to operate our business effectively. Despite the implementation of security measures, our internal computer systems and those of third parties with which we contract arevulnerable to damage from cyber-attacks, computer viruses, unauthorized access, natural disasters, terrorism, war and telecommunicationand electrical failures. System failures, accidents or security breaches could cause interruptions in our operations, and could result in amaterial disruption of our clinical and commercialization activities and business operations, in addition to possibly requiring substantialexpenditures of resources to remedy. The loss of clinical trial data could result in delays in our regulatory approval efforts and significantlyincrease our costs to recover or reproduce the data. To the extent that any disruption or security breach were to result in a loss of, or damageto, our data or applications, or inappropriate disclosure of confidential or proprietary information, we could incur liability and our productresearch, development and commercialization efforts could be delayed. Risks Related to Our Capital Needs and Financial Results We may need additional capital in order to complete the development and commercialization of mifepristone for the treatment oftriple-negative breast cancer or other indications or for the development and commercialization of our proprietary, selective GRantagonists. Additional capital may not be available to us at all or on favorable terms, which could adversely affect our business. We may need to raise additional funds to continue and expand the development of mifepristone for the treatment of triple-negativebreast cancer and of our proprietary, selective GR antagonists in various indications. We may also raise additional funds for other researchand development activities, including clinical trials, and working capital and for other general corporate purposes, or to acquire or invest inbusinesses, products and technologies that are complementary to our own. 23 Table of Contents Factors impacting our cash position and future prospects of liquidity include the following:·the amount and timing of revenues from the commercialization of Korlym;·the pace at which physicians adopt Korlym as a treatment;·the willingness of insurance companies, the government and other third-party payors to provide coverage for Korlym atreasonable rates;·changes in the coverage and reimbursement policies of third-party insurance companies or government agencies;·the costs, timing of site selection and enrollment of our clinical trials;·the results of our research efforts and clinical trials;·the need to perform additional clinical trials and other supportive studies;·the timing and outcome of our Phase 1 study of mifepristone for the treatment of triple-negative breast cancer and furtherclinical development related to this indication;·the timing and outcome of our Phase 1 study of CORT125134 and further clinical development of that compound;·developments or disputes concerning patents or proprietary rights, including announcements of claims of infringement,interference or litigation against us or our licensors;·actual or anticipated fluctuations in our operating results;·changes in our growth rates; and·changes in our research and development plans for our proprietary, selective GR antagonists. Consequently, we may need additional funding sooner than anticipated. In addition, we may choose to raise additional capital due tomarket conditions or strategic considerations even if we believe we have sufficient funds for our current and future operating plans. We cannot be certain that additional funding will be available on acceptable terms or at all. Even though we have raised funds anumber of times in the past, market and economic conditions may make it difficult for us to raise any or sufficient additional capital. Oursales of common stock and warrants and the exercises of warrants have been dilutive to stockholders and any exercise of outstandingwarrants and additional equity financing could cause further dilution. Debt financing, if available, may involve restrictive covenants. If weobtain funds through collaborations with others, these arrangements may be on unfavorable terms or may require us to relinquish certainrights to Korlym, our technologies or product candidates, which we would otherwise seek to develop on our own. If adequate funds are notavailable, we may be required to delay, reduce the scope of or eliminate one or more of our research or development programs or we may berequired to discontinue operations. We have incurred losses since inception and we may incur net losses in the future. We have a limited history of operations and have focused primarily on clinical trials. We have begun to commercialize Korlym and,if the outcome of our clinical trials supports it, we plan to seek FDA regulatory clearance to market mifepristone for the treatment of triple-negative breast cancer and, potentially, other indications. Historically, we have funded our operations primarily from the sale of our equitysecurities. We have incurred losses in each year since our inception in 1998. As of December 31, 2014, we had an accumulated deficit of$324.0 million. We began to sell our first commercial product, Korlym, in the United States in April 2012. Based on this limitedexperience marketing Korlym, it is difficult for us to predict the magnitude or timing of future product sales. We expect our research anddevelopment expenses to increase in connection with the clinical trials and other development activities for mifepristone and for otherproduct candidates. We expect to incur significant expenses related to commercializing Korlym. We are unable to predict the extent of anyfuture losses or whether or when we will become profitable. We may not be able to pursue all of our product research and development opportunities if we are unable to generate sufficientrevenue or secure adequate funding for these programs. The costs required to start or continue many of the programs that our intellectual property allows us to consider for furtherdevelopment are collectively greater than the funds currently available to us. For example, we have successfully discovered three series ofcompounds that are selective GR antagonists but do not appear to block the progesterone receptor. Further development of theseproprietary compounds or any further development stemming from our method of use patents may be delayed or cancelled if we determinethat such development may jeopardize our ability to complete the clinical development of mifepristone for the treatment of triple-negativebreast cancer. 24 Table of Contents Global economic conditions could adversely affect our liquidity and financial condition. In the United States and globally, market and economic conditions have been volatile over the past few years. Renewed concernsabout the recent recession and the systemic impact of adverse economic conditions, such as unstable global financial markets, adverseeffects on the cost and availability of capital, high corporate, consumer and governmental debt levels and unemployment may causelenders and institutional investors to reduce, and in some cases, cease, to provide credit to businesses. Renewed or increased turbulence inthe global markets and economies may adversely affect our liquidity and financial condition. If we do not have sufficient cash flow to continue operating our business and are unable to borrow funds or raise equity or debtcapital, we may need to find alternative ways to increase our liquidity. Such alternatives may include, without limitation, curtailingclinical or drug development activity, or limiting our commercial efforts, product manufacturing or sales and marketing support, whichwould have an adverse effect on our business, results of operations, cash flows and financial condition. If we acquire other selective GR antagonists or other technologies or potential products, we will incur a variety of costs and may neverrealize the anticipated benefits of the acquisition. If appropriate opportunities become available, we may attempt to acquire other technologies or potential products that arecomplementary to our operating plan. We currently have no commitments, agreements or plans for any acquisitions. The process ofacquiring rights to another potential product or technology may result in unforeseen difficulties and expenditures and may absorbsignificant management attention that would otherwise be available for ongoing development of our business. In addition, we may fail torealize the anticipated benefits of any acquired potential product or technology. Future acquisitions could dilute our stockholders’ownership interest in us and could cause us to incur debt, expose us to future liabilities and result in amortization or other expenses relatedto goodwill and other intangible assets. Failure to meet our obligations under our Financing Agreement with Biopharma Secured Debt Fund II Sub, S.àr.l (Biopharma), couldadversely affect our financial results and liquidity. Pursuant to our Financing Agreement with Biopharma entered into in August 2012, we are obligated to make payments to Biopharmaequal to 20 percent of our net product sales of Korlym, any future mifepristone-based products and our next-generation selective GRantagonists (Covered Products), subject to certain quarterly caps, as well as an un-capped 20 percent of any upfront, milestone or othercontingent payments we receive with respect to Covered Products, until such payments to Biopharma total $45.0 million. Pursuant to this agreement, we may not: (i) incur indebtedness greater than the sum of earnings before interest, taxes, depreciationand amortization, including such items as non-cash stock-based compensation, for the four calendar quarters preceding such incurrence,which we refer to as the Indebtedness Covenant; (ii) pay a dividend or other cash distribution, unless we have cash and cash equivalents inexcess of $50.0 million after such payment; (iii) amend or restate our certificate of incorporation or bylaws unless such amendments orrestatements do not affect Biopharma’s interests under the transaction; and (iv) encumber any of the collateral securing our performanceunder the agreement. The percentage used to calculate our payments to Biopharma would increase to 50 percent and any applicable payment caps wouldlapse if we (i) fail to provide Biopharma with certain information regarding our promotion and sales of Covered Products, (ii) do not devotea commercially reasonable amount of resources to the promotion and marketing of the Covered Products or (iii) violate the IndebtednessCovenant and, in each case, fail to cure within the applicable cure period. Upon a Corcept change of control transaction, as defined in the agreement, Biopharma will be automatically entitled to receive anyamounts not previously paid, up to our maximum repayment obligation of $45.0 million. As defined in the agreement, “Change ofControl” includes, among other things, (i) a greater than 50 percent change in the ownership of Corcept, (ii) certain changes in Boardcomposition of Corcept and (iii) the licensing of Korlym to a third party for sale in the United States. To secure our obligations under the agreement, we granted Biopharma a security interest in our rights in patents, trademarks, tradenames, domain names, copyrights, know-how and regulatory approvals related to the Covered Products, all books and records relating tothe foregoing and all proceeds of the foregoing, which we refer to as the Collateral. If we (i) fail to deliver a royalty payment when due anddo not remedy that failure within 30 days, (ii) fail to maintain a first-priority perfected security interest in the Collateral in the United Statesand do not remedy that failure within five business days of receiving notice of such failure or (iii) become subject to an event ofbankruptcy, then Biopharma may attempt to recover up to $45.0 million (after deducting any payments we have already made). We cannot assure that we will not breach the covenants or other terms of, or that an event of default will not occur under thisagreement and, if a breach or event of default occurs, we cannot assure that we will be able to cure the event within the time permitted. Anyfailure to pay our obligations when due, any breach or default of our covenants or other obligations, or any other event that 25 Table of Contents causes an acceleration of payment at a time when we do not have sufficient resources to meet these obligations, could have a materialadverse effect on our business, results of operations, financial condition and future viability. The acceleration of the payment obligation in the event of a change of control transaction may make us less attractive to potentialacquirers, and the payment of such funds out of our available cash or acquisition proceeds would reduce acquisition proceeds for ourstockholders. Risks Relating to Our Intellectual Property If Korlym or future product candidates conflict with the patents of others or if we become involved in other intellectual propertydisputes, we may have to engage in costly litigation or obtain a license and we may be unable to commercialize our productcandidates. Our success depends in part on our ability to obtain and maintain adequate patent protection for the use of mifepristone for thetreatment of triple-negative breast cancer and other potential uses of GR antagonists. If we do not adequately protect our intellectualproperty, competitors may be able to use our intellectual property and erode our competitive advantage. To date, we own nineteen issued U.S. method of use patents and have exclusively licensed four issued U.S. method of use patents. Wehave three U.S. method of use patent applications pending for GR antagonists. We own eight composition of matter patents. We haveapplied, and will continue to apply, for patents covering our product candidates as we deem appropriate. We have also filed, where wedeemed appropriate, foreign patent applications corresponding to our U.S. patents and applications. We have exclusively licensed three issued U.S. patents from Stanford University for the use of GR antagonists, includingmifepristone, in the treatment of psychotic major depression, which is commonly referred to as psychotic depression, cocaine-inducedpsychosis and early dementia, including early Alzheimer’s disease. We have also exclusively licensed from the University of Chicagoallowed U.S. patent claims for the use of mifepristone in the treatment of triple-negative breast cancer. We bear the costs of prosecuting, protecting and defending the rights to these patents. In order to maintain the exclusive license tothese patents until their expiration, we are obligated to make milestone and royalty payments to both universities. If we becomenoncompliant with our obligations under our agreements, we may lose the right to commercialize mifepristone for the treatment of cocaine-induced psychosis, early dementia and triple-negative breast cancer and our business would be materially harmed. In addition, if StanfordUniversity were to terminate our mifepristone license due to breach of the license on our part, we would not be able to commercializemifepristone for the treatment of cocaine-induced psychosis or early dementia. If the University of Chicago were to terminate our license,we would not be able to commercialize mifepristone for the treatment of triple-negative breast cancer. Our patent applications and patents licensed or issued to us may be challenged by third parties and our patent applications may notresult in issued patents. For example, in 2004, Akzo Nobel (now a division of Merck & Co.) filed an observation challenging the claims ofour exclusively licensed European patent application with claims directed to psychotic depression. In this instance, the patent later issuedand, in 2007, we received notice from the European Patent Office that there will be no opposition proceedings in Europe in regard to thispatent. Our presently pending and future patent applications may not issue as patents, and any patent issued to us may be challenged,invalidated, held unenforceable or circumvented. For example, the arguments presented by Akzo Nobel could be raised in the UnitedStates either before the U.S. Patent and Trademark Office or in a court of law. Furthermore, the claims in patents which have been issued tous, or which may be issued to us in the future, may not be sufficiently broad to prevent third parties from producing competing products. Inaddition, the laws of various foreign countries in which we compete may not protect our intellectual property to the same extent as do thelaws of the United States. If we fail to obtain adequate patent protection for our proprietary technology, our competitors may producecompeting products based on our technology, which would impair our ability to compete. If a third party were successful in asserting an infringement claim against us, we could be forced to pay damages and prevented fromdeveloping, manufacturing or marketing our potential products. We do not have liability insurance for patent infringements. A third partycould require us to obtain a license to continue to use their intellectual property, and we may not be able to do so on commerciallyacceptable terms, or at all. We believe that significant litigation will continue in our industry regarding patent and other intellectualproperty rights. If we become involved in litigation, it could consume a substantial portion of our resources. Regardless of the merit of anyparticular claim, defending a lawsuit takes significant time, is expensive and diverts management’s attention from other business. 26 Table of Contents If we are unable to protect our trade secrets and proprietary information, our ability to compete in the market could be diminished. In addition to patents, we rely on a combination of confidentiality, nondisclosure and other contractual provisions, laws protectingtrade secrets and security measures to protect our trade secrets and proprietary information. Nevertheless, these measures may notadequately protect our trade secrets or other proprietary information. If they do not adequately protect our rights, third parties could use ourproprietary information, which could diminish our ability to compete in the market. In addition, employees, consultants and others whoparticipate in the development of our product candidates may breach their agreements with us regarding our trade secrets and otherproprietary information, and we may not have adequate remedies for the breach. We also realize that our trade secrets may become knownthrough means not currently foreseen. Notwithstanding our efforts to protect our trade secrets and proprietary information, our competitorsmay independently develop similar or alternative products that are equal or superior to our product candidates without infringing on any ofour proprietary information or trade secrets. Our licensed patents covering the use of mifepristone to treat triple-negative breast cancer, psychotic depression, cocaine-inducedpsychosis and early dementia, including Alzheimer’s disease, cover only mifepristone’s method of use and not its composition ofmatter, which may make it more difficult for us to prove patent infringement if physicians prescribe another manufacturer’smifepristone or if patients acquire mifepristone from other sources, such as the internet or underground market. We have exclusively licensed three U.S. patents from Stanford University for the use of GR antagonists, including mifepristone, forthe treatment of psychotic depression, cocaine-induced psychosis and early dementia, including Alzheimer’s disease. We also have anexclusive license from the University of Chicago to certain allowed patent claims covering the use of mifepristone to treat triple-negativebreast cancer. A method of use patent covers only a specified use of a particular compound, not a particular composition ofmatter. Because none of the patents we have licensed from Stanford University and none of the allowed patent rights we have licensed fromthe University of Chicago cover the composition of mifepristone, we cannot prevent others from commercializing mifepristone inindications not covered by these or our other method of use patents. Although any such “off-label” use would violate our patents,effectively monitoring compliance with our patents may be difficult and costly. In addition, we cannot be assured that patients will not obtain mifepristone from other sources. As with other pharmaceuticalproducts, patients may be able to purchase mifepristone through the internet or underground market. Mifepristone is also sold in the UnitedStates by Danco Laboratories for the termination of early pregnancy. While distribution is limited to a single dose provided in thephysician’s office and covered by other restrictions, we cannot be certain that Cushing’s syndrome patients will not be able to obtainmifepristone from this source or others, should another company receive approval to market mifepristone for another indication. Risks Related to Our Stock The market price of our common stock has been and is likely to continue to be highly volatile due to the limited number of shares ofour common stock held by non-affiliates or factors influencing the stock market and opportunities for sale at any given time may belimited. We cannot assure you that an active trading market for our common stock will exist at any time. Holders of our common stock maynot be able to sell shares quickly or at the market price if trading in our common stock is not active. During the 52-week period endedMarch 2, 2015, our average daily trading volume was approximately 332,000 shares and the intra-day sales prices per share of our commonstock on The NASDAQ Stock Market ranged from $1.69 to $4.49. As of March 2, 2015, our officers, directors and principal stockholderscontrolled 34 percent of our common stock. The trading price of our common stock has been and is likely to continue to be highly volatileand could be subject to wide fluctuations in price in response to various factors, many of which are beyond our control, including:·the pace of market acceptance of Korlym or the timing and level of coverage and reimbursement attained;·our cash and short-term investment position;·actual or anticipated timing and results of our clinical trials;·new products or services introduced or announced by us or our competitors;·actual or anticipated regulatory approvals of our product candidates or of competing products;·changes in laws or regulations applicable to our product candidates or our competitors’ products;·changes in the expected or actual timing of our development programs or our competitors’ potential development programs;·actual or anticipated variations in quarterly operating results, including potential product returns and timing of revenuerecognition; 27 Table of Contents ·announcements of technological innovations by us, our collaborators or our competitors;·general market and economic conditions;·changes in financial estimates or recommendations by securities analysts;·conditions or trends in the biotechnology and pharmaceutical industries;·changes in the market valuations of similar companies;·announcements by us or our competitors of significant acquisitions, strategic partnerships, joint ventures or capitalcommitments;·additions or departures of key personnel;·disputes or other developments relating to proprietary rights, including patents, litigation matters and our ability to obtainpatent protection for our technologies;·developments concerning collaborations;·trading volume of our common stock;·limited number of shares of our common stock held by our non-affiliates;·maintaining compliance with the listing requirements of the stock exchange on which we are listed;·success of additional financing efforts; and·purchases or sales of our common stock by us, our officers, directors or our stockholders. In addition, the stock market in general, The NASDAQ Stock Market and the market for biotechnology and life sciences companies inparticular have experienced extreme price and volume fluctuations that have often been unrelated or disproportionate to the operatingperformance of those companies. These broad market and industry factors may seriously harm the market price of our common stock,regardless of our operating performance. In the past, following periods of volatility in the market, securities class-action litigation has oftenbeen instituted against companies. Such litigation, if instituted against us, could result in substantial costs and diversion of management’sattention and resources. If our operating and financial performance in any given period does not meet the guidance that we provide to the public, estimatespublished by research analysts or other investor expectations, our stock price may decline. We have provided guidance as to our expected 2015 net revenue. Our guidance is only an estimate of what management believes isrealizable as of the date of the release of such guidance. Our actual results may vary from our guidance and the variations may be material. There are a number of reasons why we might fail to meet our financial guidance or other expectations about our business, including,but not limited to, the risks and uncertainties described in this report and in our other public filings and public statements. In particular,there are inherent difficulties in predicting the amount of Korlym that will be sold. For example, the rate of physician adoption of Korlymis uncertain. Research analysts who cover our business have put forth a range of revenue estimates, based on their own analyses. Webelieve research analysts will consider the guidance we have provided as one factor in determining their own annual revenueestimates. Estimating our net revenue for future periods is difficult and you should rely on our guidance and the estimates of researchanalysts at your own discretion. If, in the future, our operating or financial results for a particular period do not meet our guidance, analystestimates or the expectations of investors, or if we reduce our guidance for future periods, our stock price may decline. Research analysts may not continue to provide or initiate coverage of our common stock or may issue negative reports, which mayhave a negative impact on our common stock’s market price. Securities analysts currently covering our common stock may discontinue research coverage. Additional securities analysts may electnot to provide research coverage of our common stock. A lack of research coverage may adversely affect our common stock’s marketprice. The trading market for our common stock may be affected in part by the research and reports that industry or financial analystspublish about us or our business. If one or more of the analysts who elects to cover us downgrades our stock, our stock price would likelydecline rapidly and significantly. If one or more of these analysts ceases coverage of our company, we could lose visibility in the market,which in turn could cause our stock price to decline. In addition, rules mandated by the Sarbanes-Oxley Act of 2002, and a globalsettlement reached in 2003 between the SEC, other regulatory analysts and a number of investment banks have led to a number offundamental changes in how analysts are reviewed and compensated. In particular, many investment banking firms are required to contractwith independent financial analysts for their stock research. It may be difficult for companies such as ours with smaller marketcapitalizations to attract independent financial analysts that will cover our common stock. This could have a negative effect on our marketprice. 28 Table of Contents Sale of a substantial number of shares of our common stock may cause the price of our common stock to decline. Sales of a substantial number of shares of our common stock in the public market could harm the market price of our commonstock. As additional shares of our common stock become available for resale in the public market, whether as a result of equity financingsby us or due to the release of trading restrictions, the supply of our common stock will increase, which could decrease theprice. Substantially all of the shares of our common stock are eligible for sale, subject to applicable volume and other resale restrictions. We may be required to pay significant penalties if we are not able to meet our obligations under our outstanding registration rightsagreements. We have entered into registration rights agreements in connection with certain of our securities offerings. We may be obligated topay liquidated damages if we do not meet our obligations under those agreements. If we are required to pay significant amounts, such as the liquidated damages described above, under these or future registration rightsagreements, it could have a material adverse effect on our financial condition and ability to finance our operations. Our officers, directors and principal stockholders, acting as a group, will be able to significantly influence corporate actions. As of March 2, 2015, our officers, directors and principal stockholders control 34 percent of our common stock. As a result, thesestockholders, acting together, will be able to significantly influence all matters requiring approval by our stockholders, including theelection of directors and the approval of mergers or other business combination transactions. The interests of this group of stockholdersmay not always coincide with our interests or the interests of other stockholders and may prevent or delay a change in control. Thissignificant concentration of share ownership may adversely affect the trading price of our common stock because investors often perceivedisadvantages to owning stock in companies with controlling stockholders. Changes in laws and regulations may result in increased costs to us, which may harm our financial results. New laws and regulations, as well as changes to existing laws and regulations, affecting our company, including the provisions of thePPACA requiring the reporting of aggregate spending related to health care professionals, the provisions of the Sarbanes-Oxley Act of 2002and rules adopted by the SEC and by The NASDAQ Stock Market have and will likely continue to result in increased costs to us as werespond to their requirements. We are investing resources to comply with evolving laws and regulations, and this investment may result inincreased selling, general and administrative expenses and a diversion of management’s time and attention from revenue-generatingactivities to compliance activities. In addition, new rules and regulations could make it more difficult or costly for us to obtain certain types of insurance, includingdirector and officer liability insurance, and we may be forced to accept reduced policy limits and coverage or incur higher costs to obtainthe same or similar coverage. The impact of these events could also make it more difficult for us to attract and retain qualified persons toserve on our Board of Directors, or our board committees, or as executive officers. At present, we cannot predict or estimate the amount ofthe additional costs related to new rules and regulations or the timing of such costs. Compliance with public company obligations, including the securities laws and regulations, is costly and requires significantmanagement resources, and we may fail to comply. We are a small company with limited resources. The federal securities laws and regulations, including the corporate governance and other requirements of the Sarbanes-Oxley Act of2002, impose complex and continually changing regulatory requirements on our operations and reporting. These requirements haveincreased and will continue to increase our legal compliance costs. Section 404 of the Sarbanes-Oxley Act of 2002 requires that we evaluate and determine the effectiveness of our internal controls overfinancial reporting and provide a management report on the internal control over financial reporting. This same legislation also requiresthat the independent registered public accounting firm auditing our financial statements must attest to and report on the effectiveness of ourinternal controls over financial reporting. If we are unable to complete the required assessment as to the adequacy of our internal controlover financial reporting in future years or if our independent registered public accounting firm is unable to provide us with an unqualifiedreport as to the effectiveness of our internal control over financial reporting as of future year ends, investors could lose confidence in thereliability of our financial reporting. 29 Table of Contents Changes in or interpretations of accounting rules and regulations could result in unfavorable accounting charges or require us tochange our accounting policies or operating practices. Accounting methods and policies for business and marketing practices of pharmaceutical companies are subject to continual review,interpretation and guidance from relevant accounting authorities, including the SEC. Although we believe that our accounting practices areconsistent with current accounting pronouncements, changes to or interpretations of accounting methods or policies in the future mayrequire us to reclassify, restate or otherwise change or revise our financial statements. Any such changes could result in correspondingchanges to the amounts of assets, liabilities, revenues, expenses and income. Any such changes could have a material adverse effect on ourbusiness, financial position and results of operations and could cause the market value of our common stock to decline. If we fail to continue to meet all applicable NASDAQ Stock Market requirements, our stock could be delisted by The NASDAQ StockMarket. If delisting occurs, it would adversely affect the market liquidity of our common stock and harm our business. If we are unable to meet any of The NASDAQ listing requirements in the future, including, for example, if the closing bid price for ourcommon stock is below $1 per share for 30 consecutive trading days, The NASDAQ Stock Market could determine to delist our commonstock, the delisting could adversely affect the market liquidity of our common stock and the market price of our common stock coulddecrease. During the 52-week period ended March 2, 2015, the intra-day sales prices per share of our common stock on The NASDAQStock Market ranged from $1.69 to $4.49. Such delisting could also adversely affect our ability to obtain financing for the continuation ofour operations and could result in the loss of confidence by investors, suppliers and employees. Anti-takeover provisions in our charter and bylaws and under Delaware law and payment acceleration provisions under theBiopharma Financing Agreement may make an acquisition of us or a change in our management more expensive or difficult, even ifan acquisition or a management change would be beneficial to our stockholders. Provisions in our charter and bylaws may delay or prevent an acquisition of us or a change in our management. Some of theseprovisions allow us to issue preferred stock without any vote or further action by the stockholders, require advance notification ofstockholder proposals and nominations of candidates for election as directors and prohibit stockholders from acting by written consent. Inaddition, a supermajority vote of stockholders is required to amend our bylaws. Our bylaws provide that special meetings of thestockholders may be called only by our Chairman, President or the Board of Directors and that the authorized number of directors may bechanged only by resolution of the Board of Directors. These provisions may prevent or delay a change in our Board of Directors or ourmanagement, which is appointed by our Board of Directors. In addition, because we are incorporated in Delaware, we are governed by theprovisions of Section 203 of the Delaware General Corporation Law. Section 203 may prohibit large stockholders, in particular thoseowning 15 percent or more of our outstanding voting stock, from merging or combining with us. In addition, our payment obligations toBiopharma accelerate in the event of a change of control transaction. See “Risk Factors – Failure to meet our obligations under ourFinancing Agreement with Biopharma Secured Debt Fund II Sub, S.àr.l, could adversely affect our financial results and liquidity.” Theseprovisions in our charter and bylaws and under Delaware law and the Financing Agreement could reduce the price that investors might bewilling to pay for shares of our common stock in the future and result in the market price being lower than it would be without theseprovisions. ITEM 1B. UNRESOLVED STAFF COMMENTS None. ITEM 2. PROPERTIES We lease 16,955 square feet of office space in Menlo Park, California for our corporate facilities. Our current lease extended ouroccupancy through December 2015. We expect that these facilities will accommodate our operations for the next year. ITEM 3. LEGAL PROCEEDINGS We are not currently involved in any material legal proceedings. ITEM 4. MINE SAFETY DISCLOSURES Not applicable. 30 Table of Contents PART II ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUERPURCHASES OF EQUITY SECURITIES Market Information Our common stock is traded on The NASDAQ Capital Market under the symbol “CORT”. The following table sets forth the high andlow intra-day sale prices per share of our common stock on The NASDAQ Capital Market for the periods indicated. These prices representquotations among dealers without adjustments for retail mark-ups, markdowns or commissions, and may not represent prices of actualtransactions. 2014High Low First Quarter$4.47 $2.70 Second Quarter$4.49 $1.69 Third Quarter$3.02 $2.27 Fourth Quarter$3.56 $2.59 2013High Low First Quarter$2.23 $1.43 Second Quarter$2.01 $1.60 Third Quarter$2.20 $1.47 Fourth Quarter$3.24 $1.57 Stockholders of Record and Dividends As of March 2, 2015, we had 101,405,250 shares of common stock outstanding held by 88 stockholders of record. We have neverdeclared or paid cash dividends on our capital stock. We currently intend to retain any future earnings to finance the growth anddevelopment of our business and therefore, do not anticipate paying any cash dividends in the foreseeable future. In addition, theBiopharma Financing Agreement prohibits payment of dividends unless we have cash and cash equivalents in excess of $50 million aftersuch payment. Sale of Unregistered Securities None. Repurchases of Securities None. Market Performance Graph The graph and the accompanying text below is not “soliciting material,” is not deemed filed with the SEC and is not to beincorporated by reference in any filings by us under the Securities Act or the Exchange Act, whether made before or after the date hereofand irrespective of any general incorporation language in such filing. The rules of the SEC require that we include a line-graph comparing cumulative stockholder returns on our common stock with theNASDAQ Composite Index (which tracks the aggregate price performance of equity securities of companies traded on NASDAQ) and eithera published industry or line-of-business standard index or an index of peer companies selected by us. We have elected to use the NASDAQBiotechnology Index (consisting of a group of 120 companies in the biotechnology sector, including us) for purposes of the performancecomparison that appears below. The graph shows the cumulative total stockholder return assuming the investment of $100.00 and the reinvestment of dividends andis based on the returns of the component companies weighted according to their market capitalizations as of the end of the period for whichreturns are indicated. No dividends have been declared on our common stock. The stockholder return shown on the graph below is not necessarily indicative of future performance, and we do not make or endorseany predictions as to future stockholder returns. 31 Table of Contents COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN* AMONGCORCEPT THERAPEUTICS, THE NASDAQ STOCK MARKET (U.S.) INDEXTHE NASDAQ US BENCHMARK TOTAL RETURN (TR) INDEXAND THE NASDAQ BIOTECHNOLOGY INDEX * $100 invested on December 31, 2009 including reinvestment of dividends. Fiscal year ended December 31. 32 Table of Contents ITEM 6. SELECTED FINANCIAL DATA SELECTED FINANCIAL DATA(in thousands, except per share data) The selected financial data set forth below are derived from our financial statements. The statement of operations data for the yearsended December 31, 2014, 2013, and 2012 and the balance sheet data as of December 31, 2014 and 2013 are derived from our auditedfinancial statements included in this Annual Report on Form 10-K (Form 10-K). The statements of operations data for the years endedDecember 31, 2011 and 2010, and the balance sheet data as of December 31, 2012, 2011 and 2010 have been derived from our auditedfinancial statements, which are not included in this Form 10-K. Our historical results are not necessarily indicative of our results to beexpected for 2015 or for any future period The selected financial data set forth below should be read in conjunction with our financialstatements, the related notes and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” includedelsewhere in this Form 10-K. Year Ended December 31, 20142013201220112010 (In thousands, except per share data)Statement of Operations Data: Product sales, net$26,551 $10,357 $3,307 $ —$ — Operating expenses:Cost of sales882 143 91 — —Research and development*18,372 20,470 14,074 21,001 18,949 Selling, general and administrative*34,916 31,240 25,414 11,331 8,488 Total operating expenses54,170 51,853 39,579 32,332 27,437 Loss from operations(27,619)(41,496)(36,272)(32,332)(27,437)Non-operating income (expense), net* (3,764)(4,515)(1,776)(22)1,471 Net loss$(31,383)$(46,011)$(38,048)$(32,354)$(25,966)Net loss per share:Basic and diluted$(0.31)$(0.46)$(0.41)$(0.39)$(0.38)Weighted average shares – basic and diluted100,978 99,819 93,015 83,309 68,336 * Includes non-cash expenses, of the following:Stock-based compensationResearch and development$723 $618 $546 $547 $220 Selling, general and administrative4,478 4,578 4,764 2,888 1,896 Total stock-based compensation5,201 5,196 5,310 3,435 2,116 Non-operating expense related to accretion of interest onlong-term obligation3,678 4,410 1,680 — —Total non-cash expenses$8,879 $9,606 $6,990 $3,435 $2,116 As of December 31, 20142013201220112010 (In thousands)Balance Sheet Data: Cash, cash equivalents and investments$24,248 $54,877 $93,032 $39,635 $24,578 Working capital16,675 45,573 86,703 34,749 21,136 Total assets34,630 63,077 99,166 39,833 25,104 Long-term obligation - current portion9,424 5,743 2,650 — —Long-term obligation, net of current portion24,463 29,322 29,030 — —Total stockholders’ equity (deficit)(3,388)21,017 61,777 34,807 21,244 33 Table of Contents ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Forward-Looking Statements This Management Discussion should be read in conjunction with the financial statements and notes thereto appearing elsewhere inthis report. We make statements in this section that are forward-looking statements within the meaning of the federal securities laws. For acomplete discussion of such forward-looking statements and the potential risks and uncertainties that may impact upon their accuracy, see“Forward-Looking Statements” included in “Risk Factors” in Part I, Item 1A of this Form 10-K and the “Overview” and “Liquidity andCapital Resources” sections of this Management’s Discussion and Analysis of Financial Condition and Results of Operations. Overview We are a pharmaceutical company engaged in the discovery, development and commercialization of drugs for the treatment of severemetabolic, oncologic and psychiatric disorders. Our focus is on disorders associated with the steroid hormone cortisol. Elevated levels andabnormal release patterns of cortisol have been implicated in a broad range of human disorders. Since our inception in 1998, we have been developing mifepristone, a competitive glucocorticoid receptor (GR) antagonist. InFebruary 2012, the FDA approved Korlym (mifepristone) 300 mg Tablets as a once-daily oral medication for treatment of hyperglycemiasecondary to hypercortisolism in adult patients with endogenous Cushing’s syndrome who have type 2 diabetes mellitus or glucoseintolerance and have failed surgery or are not candidates for surgery. We made the drug available to patients in the United States in April2012. We have begun a Phase 1/2 safety and efficacy study of mifepristone in combination with chemotherapy in the treatment of GR-positive triple-negative breast cancer – a form of cancer with a particularly poor prognosis. We have discovered and patented three series ofselective GR antagonists that, like mifepristone, competitively block GR but do not bind to the progesterone receptor and thus do notinterfere with pregnancy. On May 7, 2014, we announced the discontinuation of our Phase 3 study of mifepristone, the active ingredient in Korlym, fortreatment of psychotic depression (Study 14) after receiving the report of the study’s data monitoring committee that the trial was unlikelyto meet its primary endpoint with statistical significance based on an analysis of interim data. We began this study in 2008. See furtherdiscussion under “Psychotic Depression” below. Cushing’s Syndrome. Cushing’s syndrome is a disorder caused by prolonged exposure of the body’s tissues to high levels of thehormone cortisol. Sometimes called “hypercortisolism,” it is uncommon and most often affects adults aged 20 to 50. An estimated 10 to 15of every one million people are newly diagnosed with this syndrome each year, resulting in approximately 3,000 new patients and anestimated prevalence of 20,000 patients with Cushing’s syndrome in the United States. The FDA approval of Korlym allows us to market Korlym in the United States for its approved indication. Since Korlym’s approval inFebruary 2012, we have been carrying out our commercialization plans, including deploying medical science liaisons (MSLs) and salesrepresentatives. We have also developed digital marketing capabilities and patient assistance programs to support physicians and patients. We have Orphan Drug designations for Korlym from the FDA for the approved indication and from the European Commission for thetreatment of endogenous Cushing’s syndrome. Orphan Drug designation in the United States is a special status granted by the FDA toencourage the development of treatments for diseases or conditions that affect fewer than 200,000 patients in the United States. Drugs thatreceive Orphan Drug designation obtain seven years of marketing exclusivity for the approved indication from the date of drug approval, aswell as tax credits for clinical trial costs, marketing application filing fee waivers and assistance from the FDA in the drug developmentprocess. Benefits of Orphan Drug designation in the EU are similar to those in the United States, but include ten years of marketingexclusivity for the approved indication in all 28 member states, free scientific advice during drug development, access to a centralizedreview process and a reduction or complete waiver of fees levied by the European Medicines Agency (EMA). We submitted our MarketingAuthorization Application request to the EMA in October 2013. Triple-Negative Breast Cancer. In January 2014, we began a Phase 1/2 study of mifepristone in combination with the chemotherapydrug eribulin in the treatment of triple-negative breast cancer. In January 2015, we completed the dose-finding phase of our Phase 1/2 study. In February 2015 we began the final, efficacyphase. This phase will enroll 20 patients with relapsed, metastatic, GR-positive triple-negative breast cancer. These patients will receiveone 300 mg Korlym tablet each day, combined with eribulin administered on days one and eight of a 21-day cycle. We expect to haveresults of this study by the end of 2015. 34 ®Table of Contents Selective GR Receptor Antagonists. In 2003, we initiated a discovery research program to identify and patent selective GRantagonists with the intent of developing a pipeline of products for proprietary use. Three distinct series of GR antagonists wereidentified. These compounds, like mifepristone, competitively antagonize the cortisol receptor (GR) but do not block the PR(progesterone), ER (estrogen), AR (androgen) or GR-I (mineralocorticoid) receptors. Both the United States Patent & Trademark Office(USPTO) and the European Patent Office (EPO) have issued composition of matter patents to us in each of the three series. Several of our new compounds have demonstrated positive results in animal or in vitro models for the prevention and reversal ofalcohol dependence, amyotrophic lateral sclerosis (Lou Gehrig’s disease), Alzheimer’s disease, anti-psychotic-induced weight gain, breast,ovarian and prostate cancer in combination with a chemotherapeutic agent, electroconvulsive shock-induced retrograde amnesia, metabolicsyndrome, muscular dystrophy, obesity, prevention of glucocorticoid-induced neurological damage in premature infants, and stressdisorders. We intend to continue our discovery research program with the goal of identifying new selective GR antagonists, to manufactureand conduct pre-clinical development of one or more of these compounds and to study the most promising of them in humans. In September 2014, we commenced enrollment in a Phase 1 clinical study with CORT125134, one of these new compounds. Theprimary objectives of the study are to assess the safety, tolerability and pharmacokinetics of CORT125134 in healthy human volunteers. We expect to have results from this study in the second quarter of 2015. We plan to advance at least one additional new compound to the clinic over the next year. Psychotic Depression. On May 5, 2014, an independent data monitoring committee informed us that its analysis of data from the first226 patients to enroll in our Phase 3 trial of mifepristone for the treatment of psychotic depression (Study 14) showed that the study hadfailed to reach its primary endpoint – a rapid and sustained reduction in the patients’ psychotic symptoms – with statisticalsignificance. The committee advised us that continuing the study to its full enrollment of 450 patients would be unlikely to generate astatistically significant result. On May 7, 2014, we announced our decision to discontinue Study 14 and redeploy resources to morepromising programs. General Our activities to date have included:·product development, including drug formulation and manufacturing, designing, funding and overseeing clinical trials, andconducting non-human clinical investigatory activities, such as toxicological testing;·commercialization of Korlym, including hiring and training medical science liaisons and sales representatives, retention andmanagement of third-party distribution partners, establishment of third-party coverage and reimbursement and patientassistance programs and marketing activities;·regulatory affairs;·discovery research; and·intellectual property prosecution and expansion. Historically, we have financed our operations and internal growth primarily through private placements of our preferred and commonstock, the public sale of common stock and through our Financing Agreement with Biopharma, rather than through collaborative orpartnership agreements. As of December 31, 2014, we had an accumulated deficit of $324.0 million. Our historical operating losses have resulted principallyfrom our research and development activities, including clinical trial activities for mifepristone, discovery research, non-clinical activitiessuch as toxicology and carcinogenicity studies, manufacturing and regulatory activities, as well as selling, general and administrativeexpenses, including expenses related to the commercial launch of Korlym. We may continue to incur net losses as we continue ourmifepristone and selective GR antagonist discovery and clinical development programs, apply for regulatory approvals, acquire and / ordevelop treatments in other therapeutic areas, establish sales and marketing capabilities and expand our operations. Unless otherwise stated, all references in this document to “we,” “us,” “our,” “Corcept,” the “Company,” “our company” and similardesignations refer to Corcept Therapeutics Incorporated. Our business is subject to significant risks, including the risks inherent in our research and development efforts, the results of ourmifepristone and other clinical trials, uncertainties associated with securing financing, uncertainties associated with obtaining andenforcing patents, our investment in manufacturing set-up, the management of our supply chain, the lengthy and expensive regulatory 35 Table of Contents approval process and competition from other products. Our ability to successfully generate revenues in the foreseeable future is dependentupon our ability, alone or with others, to develop, obtain regulatory approval for, manufacture and market our products. Results of Operations Net Product Sales – Net product sales includes product revenue resulting from sales to our customers, reduced by (1) tradeallowances, such as discounts for prompt payment, (2) estimated government rebates and chargebacks, (3) reserves for expected productreturns and 4) estimated costs of our patient co-pay assistance program. We made Korlym commercially available in the United States inApril 2012. For the year ended December 31, 2014, we recorded $ 26.6 million in net product sales, as compared to $10.4 million for the yearended December 31, 2013 and $3.3 million for the year ended December 31, 2012. To calculate net product sales, we deducted from grosssales estimates of prompt-pay discounts (which we ceased to incur with respect to our specialty pharmacy customer beginning in the thirdquarter of 2013), rebates and chargebacks owed to government payors and patient assistance program costs, which amounts are not materialfor any of the periods presented. We provide cash donations to a non-profit third party organization that supports patients who meet certain eligibility requirementswith financial assistance for the treatment of Cushing's syndrome, which treatment may include Korlym. We do not include as net productrevenues sales of Korlym tablets to uninsured patients funded through this source. Cost of sales – Cost of sales includes the cost to manufacture Korlym (which includes material, third-party manufacturing costs andindirect personnel and other overhead costs) based on units sold in the current period, as well as the cost of stability testing anddistribution. We began capitalizing Korlym production costs as inventory following approval by the FDA to market Korlym in February2012. Prior to Korlym’s approval, we expensed all costs related to the manufacturing of product (including stability costs andmanufacturing overhead) as incurred, classifying these costs as research and development expense. A portion of the product manufacturedprior to FDA approval was available for us to use commercially; the majority of this inventory was fully consumed by the end of 2014. Cost of sales was $882,000 for the year ended December 31, 2014, which equals 3.3 percent of net product sales. This compared to$143,000 for the year ended December 31, 2013 and $91,000 for the year ended December 31, 2012, which represented 1.4 percent and2.8 percent of net product sales for the respective periods. Direct product cost for tablets sold during the year ended December 31,2014 represented approximately 2.7 percent of net product sales, as compared to less than 1 percent of net product sales for the year endedDecember 31, 2013. The remainder of the cost of sales during each period consisted of stability testing and distribution costs. Product soldduring the year ended December 31, 2014, included the cost to manufacture the Korlym tablets and indirect personnel and other overheadcosts but did not include the cost of the active pharmaceutical ingredient (API) as that had been expensed prior to the FDA’s approval ofKorlym. Product sold during the years ended December 30, 2013, did not include either the cost to manufacture Korlym tablets or the APIcosts, because these tablets were manufactured prior to FDA approval. Although the cost of manufacturing Korlym reflected in our cost of sales through December 31, 2014 did not reflect the full cost ofraw materials, labor and overhead costs incurred to produce the product sold during these periods, we do not expect that the inclusion ofthese previously expensed costs in future periods will materially increase our cost of sales, because we expect the added costs will be offsetby production efficiencies. In addition, because the extent and timing of stability testing varies from period to period and is not a fixedpercentage of our sales volumes, our cost of sales of Korlym as a percentage of net product sales will likely fluctuate from period to period. Research and development expenses – Research and development expenses include (1) personnel costs related to our developmentactivities, including facilities costs and non-cash stock-based compensation, (2) costs of discovery research, (3) costs associated with IND-enabling activities and pre-clinical studies, (4) costs of clinical trials, including trial preparation, enrollment, site monitoring and datamanagement and analysis expenses, (5) regulatory costs, (6) costs of manufacturing development, including the development and activitiesto qualify a tablet manufacturing site, (7) costs of manufacture and / or acquisition of clinical trial materials and material used inregistration and validation batches included in regulatory submissions and (8) other costs associated with the preparation and prosecutionof the regulatory submissions related to Korlym or other product candidates. Research and development expenses decreased 10.2 percent to $18.4 million for the year ended December 31, 2014 from$20.5 million in 2013. During the year ended December 31, 2014, as compared to 2013, there was a net increase of $755,000 in staffing and consultancycosts. The year ended December 31, 2014 included cash bonuses awarded to employees working in research and development in theamount of $815,000 in February 2014. After adjusting for the effect of these bonuses, there was a net decrease of $60,000 in staffing andconsulting costs between the year ended December 31, 2014 and 2013. Decreases in staffing and consultancy costs between periods wereprimarily due to the discontinuation of the psychotic depression study. 36 Table of Contents Clinical trial costs reflected net decreases of $1.1 million during the year ended December 31, 2014, as compared to 2013. During theyear ended December 31, 2014 as compared to 2013, there were decreases of $3.7 million related to our Phase 3 study with mifepristone forthe treatment of psychotic depression, which were partially offset by increases of $1.6 million related to our oncology study and$1.1 million related to the initiation of our phase 1 study with CORT125134. In addition, during the year ended December 31, 2014, as compared to 2013, there were decreases of $955,000 related to research andpre-clinical work on new compounds as these programs completed those activities and moved into the clinic, $526,000 related todevelopment of other products and $70,000 related to the completion of certain manufacturing process development efforts. Research and development expenses increased 45.4 percent to $20.5 million for the year ended December 31, 2013 from$14.1 million in 2012. During the year ended December 31, 2013, as compared to 2012, there was a net increase of $983,000 in staffing and consultancycosts. The year ended December 31, 2012 included cash bonuses awarded on FDA approval of Korlym to employees working in researchand development in the amount of $474,000. After adjusting for the effect of these bonuses, there was a net increase of $1.5 million instaffing and consulting costs between the year ended December 31, 2013 and 2012, $73,000 of which represented increases in non-cashstock-based compensation costs. Increases in staffing and consultancy costs between periods was due to the increased psychotic depressionstudy activities, preparations for a submission to the EMA for approval of mifepristone for Cushing’s syndrome in Europe and otherresearch and development activities. Clinical trial costs related to our Phase 3 product candidate reflected net increases of $4.6 million during the year endedDecember 31, 2013, as compared to 2012. During the year ended December 31, 2013 as compared to 2012, there were increases of$6.2 million related to our Phase 3 study with mifepristone for the treatment of psychotic depression, which were partially offset bydecreases of $182,000 related to the clinical trials with Korlym in the treatment of Cushing’s syndrome and $1.4 million related to drug-drug interaction and other NDA-supportive studies with Korlym that occurred in the prior year. During the year ended December 31, 2013, as compared to 2012, there were also net increases of $701,000 related to research anddevelopment of our new GR antagonists, $220,000 in academic research grants to further basic scientific research regarding GR antagonismand $413,000 related to research regarding other products. During the year ended December 31, 2013 as compared to 2012, there was a decrease of $784,000 related to our manufacturing costsof Korlym due to the completion of certain manufacturing process development efforts. Below is a summary of our research and development expenses by major project: Year Ended December 31,Project2014 2013 2012 (in thousands)Development programs: Psychotic depression$5,971 $9,755 $2,613 Cushing’s syndrome 2,157 2,740 4,093 Cancer 2,455 301 —Selective GR antagonists 5,607 5,250 4,249 Unallocated activities, including NDA supportive studies and manufacturing,regulatory and pre-clinical activities 1,459 1,806 2,573 Stock-based compensation 723 618 546 Total research and development expense$18,372 $20,470 $14,074 We expect research and development expenditures in 2015 to be lower than they were in 2014, as the costs associated with thecontinuation of the oncology study and the phase 1 study with CORT125134 will only partially offset the decrease in cost due to thecessation of the Phase 3 study in psychotic depression. Research and development expenses in 2016 and beyond will depend on ourstrategic priorities. See also, “Liquidity and Capital Resources”. Many factors can affect the cost and timing of our trials including inconclusive results requiring more clinical trials, slow patientenrollment, adverse side effects in study patients, insufficient supplies of medicine for our clinical trials and real or perceived lack ofeffectiveness or safety of the drug in our trials. The cost and timing of development of our selective GR antagonists will depend on thesuccess of our efforts and any difficulties that we may encounter. In addition, the development of all of our product candidates will besubject to extensive governmental regulation. These factors make it difficult for us to predict the timing and costs of the furtherdevelopment and approval of our product candidates. 37 Table of Contents Selling, general and administrative expenses – Selling, general and administrative expenses include (1) internal personnel, acontracted sales force and other consultancy costs related to administrative and commercialization activities, including facilities costs andnon-cash stock-based compensation, (2) expenses of third-party vendors that we engage to execute our commercial plans related to Korlym,including marketing and promotion, strategy development, market research and analytics, reimbursement support services,pharmacovigilance, distribution of marketing materials and other logistical needs, (3) medical educational grants and donations and (4)legal, accounting and other professional fees. For the year ended December 31, 2014, selling, general and administrative expenses increased 11.8 percent to $34.9 million from$31.2 million for 2013. During the year ended December 31, 2014, as compared to 2013, staffing and consultancy costs reflected a net increase of$3.8 million, which included $2.5 million related to cash bonuses awarded to employees and officers working in selling, general andadministrative functions in February 2014. After adjusting for the effect of these bonuses, there was a $1.3 million increase in staffing andconsultancy costs during 2014 as compared to 2013, due primarily to additional resources necessary to commercialize Korlym. During the year ended December 31, 2014, as compared to 2013, there were net decreases in other professional services costs relatedto commercialization activities of $1.3 million, primarily related to marketing and marketing materials. In addition, there were netincreases of $1.2 million between the respective years in other commercial and non-commercial support costs, such as education, trainingand conference costs, medical education grants and donations, facilities and technology costs, travel and fleet vehicle costs, legal,insurance and other service fees. For the year ended December 31, 2013, selling, general and administrative expenses increased 22.9 percent to $31.2 million from$25.4 million for 2012. During the year ended December 31, 2013, as compared to 2012, staffing and consultancy costs reflected a net decrease of$312,000. The year ended December 31, 2012 included $1.6 million related to cash bonuses awarded to employees and officers working inselling, general and administrative functions and $1.3 million of non-cash stock-based compensation related to awards that vested inFebruary 2012 upon the FDA approval of Korlym. After adjusting for these items, there was a $2.6 million increase in staffing andconsultancy costs during 2013 as compared to 2012, due primarily to additional resources necessary to commercialize Korlym, of which$1.1 million represented increases in non-cash stock-based compensation costs. During the year ended December 31, 2013, as compared to 2012, there were increases in other professional services costs related tocommercialization activities of $3.6 million, which included $2.2 million related to our contracted sales force and $944,000 related tomarket research and marketing materials. In addition, there were increases of $2.6 million between the respective years in other commercialand non-commercial support costs, such as education, training and conference costs, medical education grants and donations, facilities andtechnology costs, travel and fleet vehicle costs, legal, insurance and other service fees. Selling, general and administrative expenses included stock-based compensation expense related to option grants to individualsperforming these functions of $4.5 million, $4.6 million and $4.8 million for the years ended December 31, 2014, 2013 and 2012,respectively. We expect that selling, general and administrative expenses will be slightly higher during 2015 as compared to 2014 in regard toactivities directly associated with product commercialization. The level of selling, general and administrative activities and relatedexpenses in 2016 and future years will be largely dependent on our assessment of the staff and other services necessary to support productcommercialization and our continued clinical development activities and the availability of additional funds. See also, “Liquidity andCapital Resources.” Interest and other expense – Interest and other expense for the year ended December 31, 2014 was $3.8 million as compared to$4.5 million for the year ended December 31, 2013 and $1.8 million for the year ended December 31, 2012. These increases were primarilydue to the inclusion in 2014 and 2013 of interest expense related to our Financing Agreement with Biopharma, which was entered into inAugust 2012. Interest expense for 2014 and future years will decrease from the levels of 2013 due to quarterly payments against theoutstanding obligation. Non-GAAP Financial Measures Our financial statements and footnotes thereto are prepared in accordance with U.S. Generally Accepted Accounting Principles(GAAP) and are included in Part IV, Item 15 of this Annual Report on Form 10-K. To supplement our financial results presented on aGAAP basis, we use non-GAAP measures of net loss and net loss per share that exclude non-cash expenses related to stock-basedcompensation expense and the accretion of interest expense under our Financing Agreement with Biopharma. We use this non-GAAPmeasure of net loss to manage our business and believe that it may help investors better evaluate our past financial performance and 38 Table of Contents potential future results. Non-GAAP measures should not be considered in isolation or as a substitute for comparable GAAP accounting andinvestors should read them in conjunction with our financial statements and notes thereto prepared in accordance with GAAP. The non-GAAP measure of net loss and net loss per share that we use may be different from, and not directly comparable to, similarly titled measuresused by other companies. On the following page is a table that reflects the reconciliation of GAAP net loss and net loss per share to non-GAAP net loss and netloss per share for the periods presented. Year EndedDecember 31,201420132012(in thousands, except per share data)GAAP net loss$31,383 $46,011 $38,048 Non-cash expenses:Stock-based compensationResearch and development723 618 546 Selling, general and administrative4,478 4,578 4,764 Total stock-based compensation5,201 5,196 5,310 Accretion of interest expense related to long-term obligation3,678 4,410 1,680 Non-GAAP net loss, as adjusted for non-cash expenses$22,504 $36,405 $31,058 GAAP basic and diluted net loss per share$(0.31)$(0.46)$(0.41)Non-GAAP basic and diluted net loss per share, as adjusted for non-cash expenses$(0.22)$(0.36)$(0.33)Shares used in computing basic and diluted net loss per share100,978 99,819 93,015 Liquidity and Capital Resources We have incurred operating losses since inception, and at December 31, 2014, we had an accumulated deficit of $324.0 million. Sinceour inception, we have relied primarily on the proceeds from public and private sales of our equity securities and our Financing Agreementwith Biopharma to fund our operations. At December 31, 2014, we had cash and cash equivalents of $24.2 million, compared to $54.9 million at December 31, 2013. Netcash used in operating activities for the years ended December 31, 2014 and 2013 were $27.4 million and $37.1 million, respectively. Weused cash in each period primarily for the commercialization of Korlym and for research and development activities. In addition, we madepayments under the Biopharma Financing Agreement of $4.9 million in the aggregate during the year ended December 31, 2014. Duringthe year ended December 31, 2013, we made only two payments under this agreement in the aggregate amount of $1.0 million, whichpayments were made in July and October 2013. No payments were required under this agreement prior to that time. We expect net cash used during 2015 and future periods will be significantly lower than in corresponding period of 2014 becausecash generated from the sale of Korlym will increase more than our spending to commercialize Korlym, continue our Phase 1/2 trial ofKorlym for triple-negative breast cancer and our Phase 1 study of CORT125134, develop our other selective GR antagonists and makepayments under our Biopharma Financing Agreement. As discussed below under the caption Contractual Obligations and Commercial Commitments, we are required to make aggregatepayments under the Biopharma Financing Agreement of $45.0 million, with $5.9 million paid through December 31, 2014 and anadditional payment of $1.9 million made in February 2015. Future individual payment amounts will be variable. We believe that we will reach cash-flow breakeven without needing to raise additional funds. However, we may choose to raiseadditional funds to finance our strategic priorities. We cannot be certain that additional funding will be available on acceptable terms or atall. Any additional equity financing may be dilutive to stockholders, and any debt financing, if available, may involve restrictivecovenants. If we obtain funds through collaborations with others, these arrangements may be on unfavorable terms or may require us torelinquish certain rights to our technologies or product candidates that we would otherwise seek to develop on our own. 39 Table of Contents While we monitor the cash balance in our checking account and transfer the funds into it only as needed, these cash balances and ourmoney market fund could be affected if the underlying financial institution were to fail or were subject to other adverse conditions in thefinancial markets. We have never experienced a loss or lack of access to cash in our checking account or money market fund. Contractual Obligations and Commercial Commitments The following table presents our estimates of obligations under contractual agreements as of December 31, 2014. Contractual ObligationsTotal Less than 1year 1-3 Years 3-5 Years More than 5 Years (in thousands)Long-term obligation $39,119 Other contractual obligations: Research and development studies $3,097 $3,000 $97 $ — $ —Operating leases 811 731 80 — —Minimum royalty and license fee payments 65 130 130 15 per yearTotal other contractual obligations $3,796 $307 $130 $15 per year(1)As discussed above under the caption “Liquidity and Capital Resources”, in August 2012, we entered into a Financing Agreement with Biopharma underwhich we received $30.0 million from Biopharma. In consideration of the $30.0 million payment, we are obligated to make payments to Biopharmatotaling $45.0 million, of which $5.9 million has been paid through December 31, 2014. The remaining payment obligations will be calculated as follows:·20 percent of our net product sales of Covered Products, subject to quarterly payment caps of $3.75 million during 2015. There is no quarterly capon payments with respect to net product sales in 2016 and later. Payments are due within 30 days of quarter-end for the first, second and thirdcalendar quarters and within 45 days of year-end.·20 percent of payments received for upfront, milestone or other contingent fees under co-promotion and out-license agreements for CoveredProducts (without application of quarterly caps).·The percentage used to calculate our payments to Biopharma would increase to 50 percent and any applicable payment caps would lapse if we (i) failto provide Biopharma with certain information regarding our promotion and sales of Covered Products, (ii) do not devote a commercially reasonableamount of resources to the promotion and marketing of the Covered Products or (iii) violate the indebtedness covenant by incurring indebtednessgreater than the sum of earnings before interest, taxes, depreciation and amortization, including such items as non-cash stock-based compensation,for the four calendar quarters preceding such incurrence and, in each case, fail to cure within the applicable cure period.·Upon the occurrence of a Corcept change of control transaction or the licensing of Korlym to a third-party for promotion and sale in the UnitedStates, the entire $45 million, less any amounts already paid by us, would become due.Under the terms of the Financing Agreement, our payments are entirely variable, with no fixed minimums. The timing of our payments is determined byfuture sales and other receipts. If there are no net sales, upfront, milestone or other contingent payments in a period with respect to Covered Products, thenno payment will be due for that period. As noted above, through December 31, 2014, we have made payments of $5.9 million, with an additional paymentin the amount of $1.9 million in February 2015. Biopharma’s right to receive payments will expire once it has received cumulative payments of $45million.(2)Amounts reflected for research and development studies exclude amounts included in accounts payable and accrued clinical costs reflected on the balancesheet as of December 31, 2014.(3)In December 2013, we entered into an agreement with Chiltern to assist in the management and conduct of a clinical trial evaluating mifepristone fortreatment of triple-negative breast cancer. The total commitment under this agreement is $2.9 million, but the actual amount to be paid is dependent onactual services provided under this agreement. Approximately $1.0 million of the costs under this agreement were incurred through December 31, 2014,with the remainder to be incurred over the course of the trial.(4)In March 2014, we entered into an agreement with Quotient Clinical Limited, a clinical research organization, to assist in the management and conduct ofour Phase 1 study of CORT125134, one of our new compounds. The total commitment under the agreement is approximately$2.6 million. Approximately $1.5 million of the costs under this agreement were incurred through December 31, 2014, with the remainder to be incurredover the course of the trial.(5)In May 2014, we exercised our option to extend the lease for our office space through December 2015. At December 31, 2014, the remaining minimumrental payments under this operating lease were $631,000.(6)Through 2014, we have entered into operating leases for automobiles provided to our sales force and MSLs. The leases are for periods of three years each.At December 31, 2014, the remaining obligation for base rental payments under these leases was $180,000. (7)Under our cancellable license agreement with the University of Chicago, we are obligated to pay nonrefundable annual license fees of $15,000. Under ourcancellable license agreement with Stanford University , we are obligated to make nonrefundable minimum royalty payments of $50,000 annually for aslong as we maintain these licenses; however, a portion of these payments are creditable against future royalties. The license agreement with StanfordUniversity expires in 2019 with the expiration of the patents. We also have other contractual payment obligations and purchase commitments, the timing of which are contingent on future events. In March 2014, we entered into an agreement with PCAS for the manufacture of mifepristone, the API in Korlym, for an initial term of fiveyears, with an automatic extension of one year unless either party gives 12 months’ prior written notice that it does not want an extension. In April 2014, we entered into a manufacturing agreement with AAI for the manufacture and packaging of Korlym tablets for an initial termof three years, with consecutive automatic extensions of two years unless either party gives written notice - in the case of AAI, 18 monthsprior to the end of the applicable term, and in our case 12 months prior to the end of the 40 (1)(2 to 4)(5 and 6) (7)Table of Contents applicable term - that it does not want such an extension. Purchase commitments under these agreements will depend on our future needs;neither agreement requires a fixed minimum. Net Operating Loss Carryforwards At December 31, 2014 we had net operating loss carryforwards available to offset any future taxable income that we may generate forfederal income tax purposes of $167.8 million, which expire in the years 2019 through 2034, California net operating loss carryforwards of$131.0 million, which expire in the years 2015 through 2034, and net operating loss carryforwards from other states of $18.8 million, whichexpire in the years 2024 through 2034. We also had federal and California research and development tax credits of $21.0 million and$2.6 million, respectively. The federal research credits will expire in the years 2019 through 2033 and the California research credits haveno expiration date. Our deferred tax assets have been offset by a full valuation allowance as the realization of such assets isuncertain. Utilization of our net operating losses and tax credit carryforwards may be subject to substantial annual limitation due to theownership change limitations provided by the Internal Revenue Code and similar state provisions. Such limitations could result in theexpiration of the net operating losses and tax credit carryforwards before utilization. Off-Balance Sheet Arrangements None. Critical Accounting Policies and Estimates Our financial statements have been prepared in accordance with U.S. generally accepted accounting principles. The preparation ofthese financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities and expenses. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances,the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent fromother sources. Actual results may differ from these estimates under different assumptions or conditions. Net Product Sales Korlym is not available in retail pharmacies. From our initial launch in April 2012 through June 30, 2013, we sold Korlym primarilyto a specialty pharmacy and a specialty distributor, which subsequently resold Korlym to patients and healthcare providers. In July 2013,we began using a specialty pharmacy that operates on a consignment basis, without carrying any Korlym inventory, resulting in productsales being made directly to patients. (See discussion in forth in Part IV – Item 15(1) - Financial Statements, Notes to Financial Statements,Note 2, Significant Agreements – Commercial Agreements.) We recognize product revenues from sales of Korlym upon delivery to our customers as long as (i) there is persuasive evidence that anarrangement exists between ourselves and the customer, (ii) collectability is reasonably assured and (iii) the price is fixed or determinable. Prior authorization or confirmation of coverage level by the patient’s private insurance plan or government payor is a prerequisite to theshipment of product to a patient. In order to conclude that the price is fixed or determinable, we must be able to (i) calculate gross productrevenues from the sales to our customers and (ii) reasonably estimate net product revenues. We provide cash donations to a non-profit third party organization that supports patients who meet certain eligibility requirementswith financial assistance for the treatment of Cushing's syndrome, which treatment may include Korlym. We do not include as net productrevenues sales of Korlym tablets to uninsured patients funded through this source. We calculate gross product revenues based on the price that we charge our customers. We estimate our net product revenues bydeducting from our gross product revenues (a) trade allowances, such as discounts for prompt payment, (b) estimated government rebatesand chargebacks, (c) reserves for expected product returns and (d) estimated costs of patient co-pay assistance programs. We initially recordestimates for these deductions at the time we recognize the gross revenue. We update our estimates on a recurring basis as new informationbecomes available. Trade Allowances: We offer our specialty distributor customer a discount on Korlym sales for payment within 30 days. We expectour customers to earn these discounts and accordingly deduct them in full from gross product revenues and trade receivables at the time werecognize such revenues. Rebates and Chargebacks: We contract with Medicaid and other government agencies so that Korlym will be eligible for purchaseby, or qualify for partial or full reimbursement from, such government programs. We estimate the rebates and chargebacks that we will beobligated to provide to government programs and deduct these estimated amounts from our gross product sales at the time the revenues arerecognized. We base our estimates of these rebates and chargebacks upon (i) the discount amounts applicable to government-fundedprograms and (ii) information regarding the percentage of sales by our customers to patients who are covered by entities or programs thatare eligible for such rebates and chargebacks. 41 Table of Contents Allowances for Patient Co-pay Assistance Program: We provide financial assistance to eligible patients whose insurance policiesrequire them to pay high deductibles and co-pays. We estimate the cost of assistance to be provided under this program by applying ouractual experience regarding such assistance to our estimate of the percentage of our sales in the period that will be provided to patientscovered by the program. Sales Returns: We estimate the amount of Korlym that we believe will be returned and deduct that estimated amount from grossrevenue at the time we recognize such revenue. When estimating future returns, we analyze quantitative and qualitative informationincluding, but not limited to, actual return rates, the amount of product in the distribution channel, the expected shelf life of such product,current and projected product demand, the introduction of competing products that may erode demand, and broad economic and industry-wide indicators. If we cannot reasonably estimate product returns with respect to a particular sale, we defer recognition of revenue from thatsale until we can make a reasonable estimate. Because the majority of our sales are made to individual patients who do not have the right toreturn the product, our exposure to product returns is limited to the specialty distributor channel and is not expected to be material. Inventory and Cost of Sales We consider regulatory approval of product candidates to be uncertain, and product manufactured prior to regulatory approval maynot be sold unless regulatory approval is obtained. We expense manufacturing costs for product candidates incurred prior to regulatoryapproval as research and development expenses as we incur them. When regulatory approval of a product is obtained, we begincapitalizing manufacturing costs related to the approved product into inventory, provided such product is produced by a facility the FDAhas approved to manufacture Korlym for distribution as commercial product. We value our inventories at the lower of cost or net realizable value. We determine the cost of inventory using the specificidentification method, which approximates a first-in, first-out basis. We analyze our inventory levels quarterly and write down inventorythat has become obsolete or has a cost basis in excess of its expected net realizable value, as well as any inventory quantities in excess ofexpected requirements. Any expired inventory is disposed of and the related costs are recognized as cost of sales. Cost of sales includes the cost of product (the cost to manufacture Korlym, which includes material, third-party manufacturing costsand indirect personnel and other overhead costs) based on units for which revenue is recognized in the current period, as well as costs ofstability testing, logistics and distribution of the product. We began capitalizing Korlym production costs and the cost to acquiremifepristone, the active ingredient (API) in Korlym, as inventory following approval by the FDA in February 2012. Prior to receiving FDAapproval for Korlym, we expensed all such costs when incurred as research and development expense. A portion of the productmanufactured prior to FDA approval is available for us to use commercially. As of December 31, 2014, the majority of this pre-approvalmaterial has been consumed and the cost of sales for 2015 and future years will include the full cost of the product. Inventory amounts that are not expected to be consumed within twelve months following the balance sheet date are classified asstrategic inventory, a noncurrent asset. Accruals of Research and Development Costs We recorded accruals for estimated costs of research, pre-clinical and clinical studies, and manufacturing development, whichactivities represent a significant component of our research and development expenses. We make significant judgments and estimates indetermining the accrual balance in each reporting period. Accrued clinical trial costs are based on estimates of the work completed underthe service agreements, milestones achieved, patient enrollment and past experience with similar contracts and service providers. Ourestimate of the work completed, and associated costs to be accrued, includes our assessment of the information received from our third-partycontract research organizations and the overall status of our clinical trial activities. In the past, we have not experienced any materialdeviations between accrued and actual clinical trial expenses. However, actual services performed, number of patients enrolled and the rateof patient enrollment may vary from our estimates, resulting in adjustments to clinical trial expense in future periods. Stock-based compensation Stock-based compensation arises from the granting of stock options to employees and directors, as well as to non-employees. Employees and directors Our accounting practices and the estimates and judgments that are considered in determining fair value in regard to stock optiongrants to employees and directors are as follows:·We base the expected volatility of our common stock used in determining the fair value-based measurement of option grants toemployees, officers and directors on a weighted-average combination of the volatility of our own stock price and 42 Table of Contents that of a group of peer companies for those grants with expected terms longer than the period of time that we have been a publiccompany. For stock options granted to employees with expected terms of less than the period of time that we have been apublic company, the volatility is based on historical data of the price for our common stock for periods of time equivalent tothe expected term of these grants.·For service-based awards, we recognize the expense over the requisite service period utilizing the straight-line amortizationmethod. For options with performance-based vesting criteria, we recognize the expense at such time as there is a high degree ofprobability (i.e., greater than 70%) of achieving the required vesting criteria.·Because we have a limited base of employees and directors and have experienced minimal turnover, we apply a forfeiture rate ofzero. When an employee terminates, we will record a change in accounting estimate that represents the difference between theexpense recorded in the financial statements and the expense that would have been recorded based upon the rights to optionsthat vested during the individual’s service as an employee. As of December 31, 2014, we had $7.1 million of unrecognized compensation expense for employee and director options outstandingas of that date, which had a remaining weighted-average vesting period of 2.5 years. Non-employees All stock option grants to non-employee consultants vest solely based upon continuing service, with the exception of a performance-based award granted during 2010 for 50,000 shares, and an award granted in December 2012 for 10,000 shares. Stock-based compensationrelated to service-based option grants to non-employees is charged to expense on a straight line basis over the vesting period of the options,which approximates the period over which the related services are rendered, based on the fair value-based measurement of the options usingthe Black-Scholes option pricing model. The assumptions used in these calculations are similar to those used for the determination of fairvalue-based measurements for options granted to employees, with the exception that, for non-employee options, we are required to use theremaining contractual term as the life of the option and the fair value-based measurement related to unvested non-employee options is re-measured quarterly, based on the then current stock price as reflected on the NASDAQ Capital Market. For options with performance-basedvesting criteria, we recognize expense based on the minimum number of shares that will vest over time as the criteria are met based on theBlack-Scholes valuation of the vested shares. Long-term obligation The accounting for the Financing Agreement with Biopharma requires us to make certain estimates and assumptions, including thetiming of royalty payments due to Biopharma, the expected rate of return to Biopharma, the split between current and long-term portions ofthe obligation, and the accretion of related interest expense. Korlym has only been marketed since April 2012 and the magnitude andtiming of Korlym revenue is difficult to predict. Therefore, these estimates and assumptions are subject to significant variability and arelikely to change as we gain experience marketing Korlym, which will result in changes in our classification of the current and long-termportions of the amounts payable pursuant to this financing agreement, as well as the internal rate of return paid to Biopharma and theaccretion of interest expense related to this obligation. Actual payment amounts will be based on Korlym receipts over the term of theFinancing Agreement but in no event will the total amount paid to Biopharma exceed $45.0 million. Recently Issued Accounting Pronouncements Revenue Recognition In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2014-09, Revenuefrom Contracts with Customers. ASU 2014-09 supersedes the revenue recognition requirements in Revenue Recognition (Topic 605), andrequires entities to recognize revenue in a way that depicts the transfer of promised goods or services to customers in an amount that reflectsthe consideration to which the entity expects to be entitled in exchange for those goods or services. In applying this new guidance tocontracts within its scope, an entity will: (1) identify the contract(s) with a customer, (2) identify the performance obligation in the contract,(3) determine the transaction price, (4) allocate the transaction price to the performance obligations in the contract, and (5) recognizerevenue when (or as) the entity satisfies a performance obligation. Additionally, this new guidance will require significantly expandedrevenue recognition disclosures. This guidance, which will become effective for us as of January 1, 2017, is to be appliedretrospectively. Early application is not permitted. We are currently evaluating the new standard, but do not anticipate a material impact toour financial statements once implemented. In August 2014, the FASB issued ASU No. 2014-15, Disclosure of Uncertainties about an Entity's Ability to Continue as a GoingConcern, which requires an entity to evaluate whether conditions or events, in the aggregate, raise substantial doubt about the entity'sability to continue as a going concern for one year from the date the financial statements are issued or are available to be issued. Theguidance will become effective January 1, 2017. The adoption of ASU 2014-15 is not expected to have an impact on our financialstatements. 43 Table of Contents ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Quantitative and Qualitative Disclosures About Market Risk Interest Rate Risk The primary objective of our investment activities is to preserve principal while at the same time maximizing the income we receivefrom our investments without significantly increasing risk of loss. As of December 31, 2014, the fair value of our cash and cash equivalentswas $24.2 million and consisted primarily of a money market fund maintained at a major U.S. financial institution that invests primarily inshort-term U.S. Treasury notes and bills. To minimize our exposure to interest rate risk, we have limited the maturities of our investmentsto less than two years with an average maturity not to exceed one year. Due to the short-term nature of these instruments, a 10% increase ordecrease in market interest rates would not have a material impact on the total value of our portfolio as of December 31, 2014. ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA The financial statements required by this item are set forth beginning at page F-1 of this report and are incorporated herein byreference. ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE None. ITEM 9A. CONTROLS AND PROCEDURES (a) Evaluation of Disclosure Controls and Procedures We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our periodicand current reports that we file with the SEC is recorded, processed, summarized and reported within the time periods specified in the SEC’srules and forms, and that such information is accumulated and discussed with our management, including our Chief Executive Officer,Chief Financial Officer and Chief Accounting Officer, as appropriate, to allow timely decisions regarding required disclosure. In designingand evaluating the disclosure controls and procedures, management recognized that any controls and procedures, no matter how welldesigned and operated, can provide only reasonable and not absolute assurance of achieving the desired control objectives. In reaching areasonable level of assurance, management necessarily was required to apply its judgment in evaluating the cost-benefit relationship ofpossible controls and procedures. In addition, the design of any system of controls also is based in part upon certain assumptions about thelikelihood of future events, and we cannot assure you that any design will succeed in achieving its stated goals under all potential futureconditions; over time, control may become inadequate because of changes in conditions, or the degree of compliance with policies orprocedures may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud mayoccur and not be detected. As of December 31, 2014, our Chief Executive Officer, Chief Financial Officer and Chief Accounting Officer have evaluated ourdisclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act) which were designed to ensure thatthe information required to be disclosed by us in this Annual Report on Form 10-K was recorded, processed, summarized and reportedwithin the time periods specified in the SEC’s rules and on Form 10-K. Our disclosure controls and procedures are designed to providereasonable, not absolute, assurance that the objectives of our disclosure control system are met. Based on the evaluation, our ChiefExecutive Officer, Chief Financial Officer and Chief Accounting Officer have concluded that our disclosure controls and procedures areeffective. There were no changes in our internal controls over financial reporting during the quarter ended December 31, 2014 that havematerially affected, or are reasonably likely to materially affect, our internal control over financial reporting. (b) Management’s Report on Internal Control Over Financial Reporting Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term isdefined in Exchange Act Rule 13a-15(f). Our internal control system is designed to provide reasonable assurance regarding the preparationand fair presentation of financial statements for external purposes in accordance with generally accepted accounting principles. All internalcontrol systems, no matter how well designed, have inherent limitations and can provide only reasonable assurance that the objectives ofthe internal control system are met. 44 Table of Contents Our management, including our Chief Executive Officer, Chief Financial Officer and Chief Accounting Officer, conducted anevaluation of the effectiveness of our internal control over financial reporting, based on criteria established in Internal Control – IntegratedFramework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in 1992. Based on this evaluation,our management concluded that our internal control over financial reporting was effective as of December 31, 2014. Our independent registered public accounting firm has issued an attestation report on our internal control over financial reporting asincluded below. (c) Report of Independent Registered Public Accounting Firm The Board of Directors and Stockholders of Corcept Therapeutics Incorporated We have audited Corcept Therapeutics Incorporated’s internal control over financial reporting as of December 31, 2014, based oncriteria established in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the TreadwayCommission (1992 framework) (the COSO criteria). Corcept Therapeutics Incorporated’s management is responsible for maintainingeffective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reportingincluded in the accompanying Management’s Report on Internal Control Over Financial Reporting. Our responsibility is to express anopinion on the Company’s internal control over financial reporting based on our audit. We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Thosestandards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financialreporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financialreporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internalcontrol based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe thatour audit provides a reasonable basis for our opinion. A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliabilityof financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accountingprinciples. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenanceof records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) providereasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generallyaccepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizationsof management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection ofunauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also,projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because ofchanges in conditions, or that the degree of compliance with the policies or procedures may deteriorate. In our opinion, Corcept Therapeutics Incorporated maintained, in all material respects, effective internal control over financialreporting as of December 31, 2014, based on the COSO criteria. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the2014 financial statements of Corcept Therapeutics Incorporated and our report dated March 13, 2015 expressed an unqualified opinionthereon. /s/ Ernst & Young LLPRedwood City, CaliforniaMarch 13, 2015 ITEM 9B. OTHER INFORMATION None. 45 Table of Contents PART III Certain information required by Part III is omitted from this Annual Report on Form 10-K because we expect to file with theU.S. Securities and Exchange Commission, not later than 120 days after the end of the fiscal year covered by this Annual Report onForm 10-K, a definitive proxy statement (the Proxy Statement), pursuant to Regulation 14A in connection with the solicitation of proxiesfor our 2015 Annual Meeting of Stockholders, and certain information included therein is incorporated herein by reference. ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE The information required by this Item concerning our executive officers is set forth in Part I of this Annual Report on Form 10-K. Theremaining information required by this Item will be included in the Proxy Statement and is incorporated herein by reference. ITEM 11. EXECUTIVE COMPENSATION Compensation Discussion and Analysis The information required by this Item will be included in the Proxy Statement and is incorporated herein by reference. ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATEDSTOCKHOLDER MATTERS The information required by this Item will be included in the Proxy Statement and is incorporated herein by reference. ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE The information required by this Item will be included in the Proxy Statement and is incorporated herein by reference. ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES The information required by this Item will be included in the Proxy Statement and is incorporated herein by reference. 46 Table of Contents PART IV ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES The following documents are filed as part of this Form 10-K (1) Financial Statements: PageReport of Independent Registered Public Accounting Firm F-2Audited Financial Statements F-3Balance Sheets F-3Statements of Comprehensive Loss F-4Statement of Stockholders’ Equity (Deficit)F-5Statements of Cash Flows F-6Notes to Financial Statements F-7 (2) Financial Statement Schedules: All schedules have been omitted because the information required to be set forth therein is not applicable or is shown in the financialstatements or notes thereto. (3) Exhibits: Item 601 of Regulation S-K requires the exhibits listed below. Each management contract or compensatory plan or arrangementrequired to be filed as an exhibit to this Form 10-K has been identified. (A) EXHIBITS ExhibitNumberDescription of Document3.1Amended and Restated Certificate of Incorporation, as amended (incorporated by reference to Exhibit 3.1 to the registrant’s Quarterly Reporton Form 10-Q filed on August 9. 2012).3.2Amended and Restated Bylaws (incorporated by reference to Exhibit 3.1 to the registrant’s Current Report on Form 8-K filed on September27, 2007).4.1Specimen Common Stock Certificate (incorporated by reference to Exhibit 4.1 to the registrant’s Registration Statement on Form S-1(Registration No. 333-112676) filed on February 10, 2004).4.2Registration Rights Agreement by and among Corcept Therapeutics Incorporated and the investors signatory thereto, dated March 14, 2008(incorporated by reference to Exhibit 10.25 to the registrant’s Annual Report on Form 10-K filed on March 31, 2008).4.3Amendment to Registration Rights Agreement by and among Corcept Therapeutics Incorporated and the investors signatory thereto, datedNovember 11, 2008 (incorporated by reference to Exhibit 10.30 to the registrant’s Annual Report on Form 10-K filed on March 31, 2009).4.4Registration Rights Agreement dated as of April 21, 2010 by and among Corcept Therapeutics Incorporated and the investors signatorythereto (incorporated by reference to Exhibit 4.2 to the registrant’s Current Report on Form 8-K filed on April 23, 2010).4.5Registration Rights Agreement, dated as of March 29, 2012, by and among Corcept Therapeutics Incorporated and the investors signatorythereto (incorporated by reference to Exhibit 4.2 to the registrant’s Current Report on Form 8-K filed on March 29, 2012).4.6Form of Warrant issued in connection with the Securities Purchase Agreement by and among Corcept Therapeutics Incorporated and thepurchasers named therein, dated March 14, 2008 (incorporated by reference to Exhibit 4.4 to the registrant’s Annual Report on Form 10-Kfiled on March 31, 2008).4.7Form of Warrant issued in connection with Warrant Purchase Agreement dated as of March 25, 2012 by and among Corcept TherapeuticsIncorporated and the purchasers named therein (incorporated by reference to Exhibit 4.2 to the registrant’s Current Report on Form 8-K filedon March 29. 2012).10.12000 Stock Option Plan (incorporated by reference to Exhibit 10.1 to the registrant’s Registration Statement on Form S-1 (Registration No.333-112676) filed on February 10, 2004).10.2License Agreement by and between The Board of Trustees of the Leland Stanford Junior University and Corcept Therapeutics Incorporated,dated as of July 1, 1999 (incorporated by reference to Exhibit 10.6 to the registrant’s Registration Statement on Form S-1 (Registration No.333-112676) filed on February 10, 2004). 47 †Table of Contents 10.3Master Services Agreement by and between Corcept Therapeutics Incorporated and PPD Development, LP, dated as of January 17, 2003(incorporated by reference to Exhibit 10.12 to the registrant’s Registration Statement on Form S-1/A (File No. 333-112676) filed on March19, 2004).10.4Manufacturing Agreement with Produits Chimiques Auxiliaires et de Synthese SA, dated November 8, 2006 (incorporated by reference toExhibit 10.15 to the registrant’s Annual Report on Form 10-K filed on April 2, 2007).10.5Form of Indemnification Agreement for directors and officers approved by the Board of Directors on September 24, 2007 (incorporated byreference to Exhibit 10.7 to the registrant’s Quarterly Report on Form 10-Q filed on November 14, 2007).10.6Securities Purchase Agreement by and among Corcept Therapeutics Incorporated and the purchasers named therein, dated March 14, 2008(incorporated by reference to Exhibit 10.24 to the registrant’s Annual Report on Form 10-K filed on March 31, 2008).10.7Master Service Agreement by and among Corcept Therapeutics Incorporated and ICON Clinical Research, L.P., signed on June 4, 2008(incorporated by reference to Exhibit 10.5 to the registrant’s Quarterly Report on Form 10-Q filed on August 14, 2008).10.8Amended and Restated Severance and Change in Control Agreement by and between Corcept Therapeutics Incorporated and Joseph K.Belanoff, M. D., dated September 19, 2008 (incorporated by reference to Exhibit 10.25 to the registrant’s Annual Report on Form 10-K filedon March 31, 2009).10.9Amended and Restated Severance and Change in Control Agreement by and between Corcept Therapeutics Incorporated and Robert L. Roe,M. D., dated September 19, 2008 (incorporated by reference to Exhibit 10.26 to the registrant’s Annual Report on Form 10-K filed on March31, 2009).10.10Amended and Restated Severance and Change in Control Agreement by and between Corcept Therapeutics Incorporated and Anne M.LeDoux, dated September 19, 2008 (incorporated by reference to Exhibit 10.27 to the registrant’s Annual Report on Form 10-K filed onMarch 31, 2009).10.11Amended and Restated Severance and Change in Control Agreement by and between Corcept Therapeutics Incorporated and James N.Wilson, dated September 19, 2008 (incorporated by reference to Exhibit 10.28 to the registrant’s Annual Report on Form 10-K filed on March31, 2009).10.12Securities Purchase Agreement by and among Corcept Therapeutics Incorporated and the purchasers named therein, dated October 12, 2009(incorporated by reference to Exhibit 10.1 to the registrant’s Quarterly Report on Form 10-Q filed on November 12, 2009).10.13Amended and Restated 2004 Equity Incentive Plan (incorporated by reference to the registrant’s Proxy Statement on Schedule 14A filed onMay 7, 2009).10.14Form of Option Agreement for options granted pursuant to the Amended and Restated 2004 Equity Incentive Plan (incorporated by referenceto Exhibit 10.25 to the registrant’s Annual Report on Form 10-K filed on March 15, 2011).10.15Development Agreement by and between Corcept Therapeutics Incorporated and Formulation Technologies L.L.C. d/b/a PharmaForm, datedas of December 14, 2006 (incorporated by reference to Exhibit 10.28 to the registrant’s Annual Report on Form 10-K filed on March 15,2011).10.16Master Services Agreement by and between Corcept Therapeutics Incorporated and United BioSource Corporation, dated as of June 29, 2010(incorporated by reference to Exhibit 10.29 to the registrant’s Annual Report on Form 10-K filed on March 15, 2011).10.17Employment offer letter to Steven Lo, dated August 9, 2010 (incorporated by reference to Exhibit 10.1 to the registrant’s Quarterly Report onForm 10-Q filed on November 12, 2010). 10.18Severance and Change in Control Agreement by and between Corcept Therapeutics Incorporated and Steven Lo, dated September 15, 2010(incorporated by reference to Exhibit 10.2 to the registrant’s Quarterly Report on Form 10-Q filed on November 12, 2010).10.19Severance and Change in Control Agreement by and between Corcept Therapeutics Incorporated and G. Charles Robb, dated September 1,2011 (incorporated by reference to Exhibit 10.2 to the registrant’s Quarterly Report on Form 10-Q filed on November 8, 2011).10.20Employment offer letter to G. Charles Robb dated August 12, 2011 (incorporated by reference to Exhibit 10.1 to the registrant’s QuarterlyReport on Form 10-Q filed on November 8, 2011).10.21Manufacturing and Supply Agreement with Formulation Technologies, LLC D/B/A PharmaForm, LLC, dated March 21, 2012 (incorporatedby reference to Exhibit 10.1 to the registrant’s Quarterly Report on Form 10-Q filed on May 10, 2012).10.22Warrant Purchase Agreement, dated as of March 25, 2012, by and among Corcept Therapeutics Incorporated and the purchasers namedtherein (incorporated by reference to Exhibit 10.1 to the registrant’s Current Report on Form 8-K filed on March 29, 2012).10.23Commercial Outsourcing Services Agreement with Integrated Commercialization Solutions, Inc., dated as of April 14, 2011 (incorporated byreference to Exhibit 10.1 to the registrant’s Quarterly Report on Form 10-Q filed on August 9, 2012).10.24Amended and Restated Exclusive Pharmacy Product Purchase and Services Agreement with CuraScript, Inc., dated August 8, 2012(incorporated by reference to Exhibit 10.2 to the registrant’s Quarterly Report on Form 10-Q filed on August 9, 2012).10.25Corcept Therapeutics Incorporated 2012 Incentive Award Plan (incorporated by reference to Appendix A to the registrant’s Definitive ProxyStatement on Schedule 14A filed with the SEC on May 21, 2012). 48 #† #††††††##††††###†Table of Contents 10.26Form of 2012 Incentive Award Plan Stock Option Grant Notice and Agreement (incorporated by reference to Exhibit 4.5 to the registrant’sRegistration Statement on Form S-8 filed with the SEC on August 13, 2012).10.27Purchase and Sale Agreement with between Corcept Therapeutics Incorporated and Biopharma Secured Debt Fund II Sub, S.à r.l,, dated as ofAugust 2, 2012 (incorporated by reference to Exhibit 10.4 to the registrant’s Quarterly Report on Form 10-Q filed on November 8, 2012).10.28Amendment to Manufacturing Agreement with Produits Chimiques Auxiliaires et de Synthese SA, dated February 21, 2013 (incorporated byreference to Exhibit 10.31 to the registrant’s Annual Report on Form 10‑K filed on March 15, 2013). 10.29Pharmaceutical Manufacturer Services Agreement with Centric Health Resources, Inc., dated May 21, 2013 (incorporated by reference toExhibit 10.1 to the registrant’s Quarterly Report on Form 10-Q filed on August 9, 2013).10.30Letter agreement with Robert L. Roe, M.D. regarding terms of retirement and consulting arrangement, dated June 21, 2013 (incorporated byreference to Exhibit 10.2 to the registrant’s Quarterly Report on Form 10-Q filed on August 9, 2013).10.31Amendment to Pharmaceutical Manufacturer Services Agreement with Centric Health Resources, Inc., dated July 22, 2013 (incorporated byreference to Exhibit 10.3 to the registrant’s Quarterly Report on Form 10-Q filed on August 9, 2013).10.32Amendment to Manufacturing Agreement with Produits Chimiques Auxiliaires et de Synthese SA, dated August 1, 2013 (incorporated byreference to Exhibit 10.4 to the registrant’s Annual Report on Form 10‑K filed on August 9, 2013).10.33Amendment to Manufacturing Agreement with Produits Chimiques Auxiliaires et de Synthese SA, dated November 7, 2013 (incorporated byreference to Exhibit 10.1 to the registrant’s Quarterly Report on Form 10-Q filed on November 12, 2013).10.34Amendment to Manufacturing Agreement with Produits Chimiques Auxiliaires et de Synthese SA, dated January 27, 2014.10.35Consulting agreement with Robert L. Roe, M.D., dated January 7, 2014 (incorporated by reference to Exhibit 10.1 to the registrant’s QuarterlyReport on Form 10-Q filed on May 12, 2014).10.36Manufacturing and Supply Agreement with Produits Chimiques Auxiliaires et de Synthese SA, dated March 20, 2014 (incorporated byreference to Exhibit 10.2 to the registrant’s Quarterly Report on Form 10-Q filed on May 12, 2014).10.37First Amendment to the Commercial Outsourcing Services Agreement with Integrated Commercialization Solutions, Inc., effective as of April14, 2014 (incorporated by reference to Exhibit 10.1 to the registrant’s Quarterly Report on Form 10-Q filed on August 8, 2014).10.38Manufacturing Agreement with AAI Pharma Services Corp., dated April 7, 2014 (incorporated by reference to Exhibit 10.2 to the registrant’sQuarterly Report on Form 10-Q filed on August 8, 2014).10.39Second Amendment to the Commercial Outsourcing Services Agreement with Integrated Commercialization Solutions, Inc., effective as of June11, 2014 (incorporated by reference to Exhibit 10.3 to the registrant’s Quarterly Report on Form 10-Q filed on August 8, 2014).10.40Third Amendment to the Commercial Outsourcing Services Agreement with Integrated Commercialization Solutions, Inc., effective as ofAugust 11, 2014 (incorporated by reference to Exhibit 10.3 to the registrant’s Quarterly Report on Form 10-Q filed on November 7, 2014).10.41Second Amendment to Pharmaceutical Manufacturer Services Agreement with Dohmen Life Science Services, LLC (as successor in interestto Centric Health Resources, Inc.) dated October 6, 2014.23.1Consent of Independent Registered Public Accounting Firm24.1Power of Attorney (See signature page)31.1Certification pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934 of Joseph K. Belanoff, M.D.31.2Certification pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934 of G. Charles Robb32.1Certification pursuant to 18 U.S.C. Section 1350 of Joseph K. Belanoff, M.D.32.2Certification pursuant to 18 U.S.C. Section 1350 of G. Charles Robb101The following materials from the registrant’s Annual Report on Form 10-K for the year ended December 31, 2014, formatted in ExtensibleBusiness Reporting Language (XBRL): (i) Balance Sheets at December 31, 2014 and 2013, (ii) Statements of Comprehensive Loss for theYears Ended December 31, 2014, 2013 and 2012, (iii) Statements of Stockholders’ Equity for the Years Ended December 31, 2014, 2013 and2012, (iv) Statements of Cash Flows for the Years Ended December 31, 2014, 2013 and 2012, and (v) Notes to Financial Statements. Confidential treatment requestedConfidential treatment grantedManagement contract or compensatory plan or arrangement 49 †##†########†Table of Contents SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this reportto be signed on its behalf by the undersigned thereunto duly authorized. CORCEPT THERAPEUTICS INCORPORATED By:/s/ JOSEPH K. BELANOFF Joseph K. Belanoff, M.D., Chief Executive Officer and President Date:March 13, 2015 POWER OF ATTORNEY KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below hereby constitutes and appointsJoseph K. Belanoff and G. Charles Robb, and each of them acting individually, as his or her true and lawful attorneys-in-fact and agents,each with full power of substitution, for him or her in any and all capacities, to sign any and all amendments to this report on Form 10-Kand to file the same, with exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission,granting unto said attorneys-in-fact and agents, with full power of each to act alone, full power and authority to do and perform each andevery act and thing requisite and necessary to be done in connection therewith, as fully for all intents and purposes as he or she might orcould do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or his or their substitute or substitutes, maylawfully do or cause to be done by virtue hereof. Pursuant to the requirements of the Exchange Act, this Annual Report on Form 10-K has been signed by the following persons onbehalf of the registrant and in the capacities and on the dates indicated: SignatureTitleDate/s/ JOSEPH K. BELANOFF Joseph K. Belanoff, M.D.Chief Executive Officer, President and Director (PrincipalExecutive Officer)March 13, 2015/s/ G. CHARLES ROBB G. Charles RobbChief Financial Officer and Secretary (Principal FinancialOfficer)March 13, 2015/s/ ANNE M. LEDOUX Anne M. LeDouxVice President and Controller (Principal AccountingOfficer)March 13, 2015/s/ JAMES N. WILSONJames N. WilsonDirector and Chairman of the Board of DirectorsMarch 13, 2015/s/ G. LEONARD BAKER, JR.G. Leonard Baker, Jr.DirectorMarch 13, 2015/s/ DANIEL M. BRADBURYDaniel M. BradburyDirectorMarch 13, 2015/s/ JOSEPH C. COOK, JR.Joseph C. Cook, Jr.DirectorMarch 13, 2015/s/ PATRICK G. ENRIGHTPatrick G. EnrightDirectorMarch 13, 2015/s/ DAVID L. MAHONEYDavid L. MahoneyDirectorMarch 13, 2015/s/ JOSEPH L. TURNERJoseph L. TurnerDirectorMarch 13, 2015 50 Table of Contents CORCEPT THERAPEUTICS INCORPORATED INDEX TO FINANCIAL STATEMENTS PageReport of Independent Registered Public Accounting Firm F-2Audited Financial Statements F-3Balance Sheets F-3Statements of Comprehensive Loss F-4Statement of Stockholders’ Equity (Deficit)F-5Statements of Cash Flows F-6Notes to Financial Statements F-7 F-1 Table of Contents REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM The Board of Directors and Stockholders of Corcept Therapeutics Incorporated We have audited the accompanying balance sheets of Corcept Therapeutics Incorporated as of December 31, 2014 and 2013 and therelated statements of comprehensive loss, stockholders’ equity (deficit) and cash flows for each of the three years in the period endedDecember 31, 2014. These financial statements are the responsibility of the Company’s management. Our responsibility is to express anopinion on these financial statements based on our audits. We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States.)Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free ofmaterial misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financialstatements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well asevaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of CorceptTherapeutics Incorporated at December 31, 2014 and 2013, and the results of its operations and its cash flows for each of the three years inthe period ended December 31, 2014, in conformity with U.S. generally accepted accounting principles. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), CorceptTherapeutics Incorporated’s internal control over financial reporting as of December 31, 2014, based on criteria established in InternalControl - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (1992 framework) andour report dated March 13, 2015 expressed an unqualified opinion thereon. /s/ Ernst & Young LLP Redwood City, CaliforniaMarch 13, 2015 F-2 Table of ContentsCORCEPT THERAPEUTICS INCORPORATEDBALANCE SHEETS(in thousands, except per share amounts) December 31, 2014 2013 Assets Current assets: Cash and cash equivalents$24,248 $54,877 Trade receivables 3,334 1,428 Inventory 1,207 1,096 Prepaid expenses and other current assets 1,441 910 Total current assets 30,230 58,311 Strategic inventory 4,090 4,450 Property and equipment, net of accumulated depreciation 236 203 Other assets 74 113 Total assets$34,630 $63,077 Liabilities and stockholders’ equity (deficit) Current liabilities: Accounts payable$1,886 $2,381 Accrued clinical expenses 336 3,288 Other accrued liabilities 1,876 1,301 Long-term obligation - current portion 9,424 5,743 Deferred revenue 33 25 Total current liabilities 13,555 12,738 Long-term obligation, net of current portion 24,463 29,322 Commitments Stockholders' equity (deficit): Preferred stock, $0.001 par value, 10,000 shares authorized and no sharesoutstanding at December 31, 2014 and 2013 — —Common stock, $0.001 par value, 280,000 shares authorized and 101,395 and 99,849 shares issuedand outstanding at December 31, 2014 and 2013, respectively 101 100 Additional paid-in capital 320,511 313,534 Accumulated deficit (324,000) (292,617)Total stockholders’ equity (deficit) (3,388) 21,017 Total liabilities and stockholders’ equity (deficit)$34,630 $63,077 The accompanying notes are an integral part of these financial statements. F-3 Table of ContentsCORCEPT THERAPEUTICS INCORPORATEDSTATEMENTS OF COMPREHENSIVE LOSS(in thousands, except per share amounts) Year Ended December 31,201420132012Product sales, net$26,551 $10,357 $3,307 Operating expenses:Cost of sales882 143 91 Research and development18,372 20,470 14,074 Selling, general and administrative34,916 31,240 25,414 Total operating expenses54,170 51,853 39,579 Loss from operations(27,619)(41,496)(36,272)Interest and other expense(3,764)(4,515)(1,776)Net loss and comprehensive loss$(31,383)$(46,011)$(38,048)Basic and diluted net loss per share$(0.31)$(0.46)$(0.41)Shares used in computing basic and diluted net loss per share100,978 99,819 93,015 The accompanying notes are an integral part of these financial statements. F-4 Table of ContentsCORCEPT THERAPEUTICS INCORPORATEDSTATEMENTS OF STOCKHOLDERS EQUITY (DEFICIT)( in thousands ) fhiheir Common StockAdditionalPaid-in CapitalAccumulatedDeficitTotal Stockholders'Equity (Deficit) SharesAmount Balance at December 31, 201184,231 $84 $243,281 $(208,558)$34,807 Sale of common stock in public financing transaction11,000 11 46,119 —46,130 Issuance of common stock upon exercise of warrants and issuance of new warrants in private equity transaction4,202 4 12,815 —12,819 Issuance of common stock upon exercise of warrants216 —470 —470 Issuance of common stock upon exercise of options165 1 288 —289 Stock-based compensation related to employee and director options — —5,102 —5,102 Stock-based compensation related to non-employee options — —208 —208 Net loss and comprehensive loss(38,048)(38,048)Balance at December 31, 201299,814 100 308,283 (246,606)61,777 Issuance of common stock upon exercise of options35 —55 —55 Stock-based compensation related to employee and director options — —5,069 —5,069 Stock-based compensation related to non-employee options — —127 —127 Net loss and comprehensive loss(46,011)(46,011)Balance at December 31, 201399,849 100 313,534 (292,617)21,017 Issuance of common stock upon exercise of options1,381 1 1,776 —1,777 Issuance of common stock upon exercise of warrants165 — — — —Stock-based compensation related to employee and director options — —4,731 —4,731 Stock-based compensation related to non-employee options — —470 —470 Net loss and comprehensive loss(31,383)(31,383)Balance at December 31, 2014101,395 $101 $320,511 $(324,000)$(3,388) The accompanying notes are an integral part of these financial statements F-5 Table of ContentsCORCEPT THERAPEUTICS INCORPORATEDSTATEMENTS OF CASH FLOWS(in thousands) Year ended December 31,201420132012Operating activitiesNet loss$(31,383)$(46,011)$(38,048)Adjustments to reconcile net loss to net cash used in operations:Stock-based compensation5,201 5,196 5,310 Accretion of interest expense3,678 4,410 1,680 Amortization of debt financing costs29 35 17 Depreciation and amortization of property and equipment141 74 27 Changes in operating assets and liabilities:Trade receivables(1,906)(871)(557)Inventory249 (883)(4,663)Prepaid expenses and other current assets(531)(290)(480)Other assets10 (4)11 Accounts payable(495)(1,423)193 Accrued clinical expenses(2,952)2,445 199 Other accrued liabilities575 255 275 Deferred revenue8 9 16 Net cash used in operating activities(27,376)(37,058)(36,020)Investing activitiesPurchases of property and equipment(174)(127)(151)Cash used in investing activities(174)(127)(151)Financing activitiesProceeds from issuance of common stock and warrants, net of issuance costs — —59,419 Proceeds from exercise of stock options, net of issuance costs1,777 55 289 Proceeds from issuance of long-term obligation, net of issuance costs — —29,860 Payments related to long-term obligation(4,856)(1,025) —Net cash (used in) provided by financing activities(3,079)(970)89,568 Net (decrease) increase in cash and cash equivalents(30,629)(38,155)53,397 Cash and cash equivalents at beginning of period54,877 93,032 39,635 Cash and cash equivalents at end of period$24,248 $54,877 $93,032 The accompanying notes are an integral part of these financial statements F-6 Table of ContentsCORCEPT THERAPEUTICS INCORPORATEDNOTES TO FINANCIAL STATEMENTS 1. Basis of Presentation and Summary of Significant Accounting Policies Description of Business Corcept Therapeutics Incorporated was incorporated in the state of Delaware in May 1998, and our facilities are located in MenloPark, California. Corcept is a pharmaceutical company engaged in the discovery, development and commercialization of drugs for thetreatment of severe metabolic, oncologic and psychiatric disorders. Since our inception, we have been developing our lead product,Korlym. Mifepristone, the active ingredient in Korlym, is a potent competitive antagonist of the glucocorticoid receptor (GR), whichmeans that it competitively blocks the effects of cortisol throughout the body at one of its two receptors. In February 2012, the UnitedStates Food and Drug Administration (FDA) approved Korlym (mifepristone) 300 mg Tablets as a once-daily oral medication for treatmentof hyperglycemia secondary to hypercortisolism in adult patients with endogenous Cushing’s syndrome who have type 2 diabetes mellitusor glucose intolerance and have failed surgery or are not candidates for surgery. We released Korlym for sale in the United States in April2012. In December 2013, we initiated a study of mifepristone for the treatment of triple-negative breast cancer. In addition, we havediscovered and patented three series of novel selective GR antagonists. Unless otherwise stated, all references in these financial statementsto “we,” “us,” “our,” “Corcept,” the “Company,” “our company” and similar designations refer to Corcept Therapeutics Incorporated. Use of Estimates The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to useassumptions and make estimates to form judgments that affect the amounts reported in the financial statements and accompanyingnotes. Actual results could differ materially from those estimates. We evaluate our estimates and assumptions on an ongoing basis, including those related to our reserves for chargebacks and rebates,patient assistance, potential product returns, excess/obsolete inventories, allowances for doubtful accounts, accruals of clinical andpreclinical expenses, contingent liabilities, and the timing of payments with respect to our long-term financing agreement, which determineits effective interest rate. We base our estimates on relevant experience and on other specific assumptions that we believe are reasonable. We update our assumptions and estimates on a recurring basis as new information becomes available. Any changes in estimates arerecorded in the period of the change. Cash and Cash Equivalents We invest our cash in bank deposits, money market accounts, corporate debt securities and obligations of the U.S. government andU.S. government sponsored entities. We consider all highly liquid investments purchased with maturities of three months or less from thedate of purchase to be cash equivalents. Cash equivalents are carried at fair value, which approximates cost and, as of December 31, 2014and 2013, all of our funds were invested in cash and cash equivalents that consist of a money market fund maintained at a major U.S.financial institution. Credit Risks and Concentrations We have a concentration of credit risk related to our cash and cash equivalents. We are exposed to credit risk in the event of defaultby the financial institution holding these funds or by the entity or entities that issued the securities held by the fund to the extent of theamount recorded on our balance sheet. We mitigate this risk by investing in a money market fund that invests primarily in short-term U.S.Treasury notes and bills. We have never experienced a loss or lack of access to cash and cash equivalents in our operating or investmentaccounts. Since the commercialization of Korlym in April 2012, we have been exposed to credit risk in regard to our trade receivables. Fromthe launch of Korlym through June 30, 2013, 97% of our sales were to one specialty pharmacy customer, from whom we have fullycollected all receivables. As discussed in Note 2, Significant Agreements – Commercial Agreements, in mid-2013 we transitioned all ofour specialty pharmacy business to a new provider, Dohmen Life Science Services (Dohmen), formerly known as Centric Health Resources,Inc.. Among other services, Dohmen dispenses Korlym to patients for us, with title to the medicine passing from us to the patient upon thepatient’s receipt of the drug. Accordingly, our receivables risk is spread among various third-party payors – pharmacy benefit managers,insurance companies, private charities, government programs – and individual patients. We extend credit to third-party payors based ontheir creditworthiness. We monitor our exposure and record an allowance against uncollectible trade receivables as necessary. To date, wehave not incurred any credit losses. F-7 ®Table of ContentsCORCEPT THERAPEUTICS INCORPORATEDNOTES TO FINANCIAL STATEMENTS, Continued We have a concentration of risk in regard to the manufacture of our product. As of December 31, 2014, we had one tabletmanufacturer for Korlym– AAI Pharma Services Corp. (AAI). In addition, we have a single-source manufacturer of mifepristone, the activepharmaceutical ingredient (API), in Korlym - Produits Chimiques Auxiliaires et de Synthèse SA (PCAS). If either of these companies isunable to manufacture API or Korlym tablets in the quantities and time frame required, we may not be able to manufacture our product in atimely manner. In order to mitigate these risks related to the manufacture of our product, we purchased and hold in inventory additionalquantities of mifepristone API and Korlym tablets. Fair Value Measurements We categorize financial instruments in a fair value hierarchy that prioritizes the information used to develop assumptions formeasuring fair value. The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets or liabilities(Level 1 input), then to quoted prices in non-active markets or in active markets for similar assets or liabilities, inputs other than quotedprices that are observable for the asset or liability, and inputs that are not directly observable, but that are corroborated by observablemarket data for the asset or liability (Level 2 input), then the lowest priority to unobservable inputs, for example, our own data about theassumptions that market participants would use in pricing an asset or liability (Level 3 input). Fair value is a market-based measurement,not an entity-specific measurement, and a fair value measurement should therefore be based on the assumptions that market participantswould use in pricing the asset or liability. No assets or liabilities in our financial statements are required to be reported at fair value other than our cash equivalents. Trade Receivables Trade receivables are recorded net of customer allowances for co-pay assistance, doubtful accounts and sales returns. See thediscussion below under “Net Product Sales” regarding the methods for estimation of these allowances and sales returns. We determine ourallowance for doubtful accounts based on existing contractual payment terms, actual payment patterns of our customers and individualcustomer circumstances. To date, we have determined that an allowance for uncollectible trade receivables is not required. Inventory We consider regulatory approval of product candidates to be uncertain, and product manufactured prior to regulatory approval maynot be sold unless regulatory approval is obtained. We expense the manufacturing costs for product candidates incurred prior to regulatoryapproval as research and development expense as we incur them. When regulatory approval of a product is obtained, we begin capitalizingmanufacturing costs related to the approved product into inventory, provided such product is produced by a facility the FDA has approvedto manufacture the commercial product. We value our inventories at the lower of cost or net realizable value. We determine the cost of inventory using the specificidentification method, which approximates a first-in, first-out basis. We analyze our inventory levels quarterly and write down inventorythat has become obsolete or has a cost basis in excess of its expected net realizable value, as well as any inventory quantities in excess ofexpected requirements. Any expired inventory is disposed of and the related costs are recognized as cost of sales in the statement ofcomprehensive loss. Inventory amounts that are not expected to be consumed within twelve months following the balance sheet date are classified asstrategic inventory, a noncurrent asset. Property and Equipment We state property and equipment at cost less accumulated depreciation. Property and equipment are depreciated using the straight-line method over the estimated useful lives of the assets, ranging from three to five years. Long-term Obligation In August 2012, we entered into a Purchase and Sale Agreement (Financing Agreement) with Biopharma Secured Debt Fund II Sub,S.à r.l. (Biopharma), a private limited liability company organized under the laws of Luxembourg. Under the terms of the FinancingAgreement, we received $30.0 million from Biopharma, which was recorded as a long-term obligation at issuance. We are obligated to makepayments calculated as a percentage of (i) any licensing or other contingent payments arising from Korlym and any other productscontaining mifepristone or any of our proprietary selective GR antagonists (Covered Products) and (ii) net Covered Product revenuesearned in the calendar quarter ended June 30, 2013 and thereafter (together, Korlym Receipts), until such time as we have paid Biopharma atotal of $45.0 million. F-8 Table of ContentsCORCEPT THERAPEUTICS INCORPORATEDNOTES TO FINANCIAL STATEMENTS, Continued Interest expense related to the Financing Agreement is calculated based on the internal interest rate to Biopharma that would resultfrom these assumed payment streams. The accounting for the Financing Agreement requires us to make certain estimates and assumptions, including the timing of royaltypayments due to Biopharma, the expected rate of return to Biopharma, the split between current and long-term portions of the obligationand the accretion of related interest expense. Korlym has only been marketed since April 2012 and the magnitude and timing of Korlymrevenue is difficult to predict. Therefore, these estimates and assumptions are subject to significant variability and are likely to change aswe gain experience marketing Korlym, which will result in changes in our classification of the current and long-term portions of theamounts payable pursuant to the Financing Agreement, as well as the internal rate of return paid to Biopharma and the accretion of interestexpense related to this obligation. The amount of our payment with respect to each quarter will be based on Korlym Receipts recorded inthat quarter and may differ from our estimates. While changes in timing of Korlym revenue may affect the timing of recognition of interestexpense and the split between the current and long-term portions of the obligation at any balance sheet date, the aggregate amount to berepaid to Biopharma is fixed at $45.0 million. The amount shown as the current portion of the obligation is an estimate of the total amount under the Financing Agreement thatwould be paid to Biopharma within 12 months following December 31, 2014. See Note 6, Long-Term Obligation, for additional information regarding this agreement. Net Product Sales Korlym is not available in retail pharmacies. From our initial launch in April 2012 through June 30, 2013, we sold Korlym primarilyto a specialty pharmacy and a specialty distributor, which subsequently resold Korlym to patients and healthcare providers. As of July 1,2013, we began using Dohmen as our specialty pharmacy. Dohmen operates on a consignment basis, without carrying any Korlyminventory. Accordingly, all of our sales through Dohmen are made directly to patients. We recognize product revenues from sales of Korlym upon delivery to patients as long as (i) there is persuasive evidence that anarrangement exists between ourselves and the customer, (ii) collectability is reasonably assured and (iii) the price is fixed ordeterminable. Prior authorization or confirmation of coverage level by the patient’s private insurance plan or government payor is aprerequisite to the shipment of product to a patient. In order to conclude that the price is fixed or determinable, we must be able to(i) calculate gross product revenues from the sales to our customers and (ii) reasonably estimate net product revenues. We make cash donations to a non-profit third party organization that provides patients who meet certain eligibility requirements withfinancial assistance for the treatment of Cushing's syndrome, which treatment may include Korlym. We do not include in net productrevenues sales of Korlym tablets to uninsured patients funded through this source. We calculate gross product revenues based on the price that we charge our customers. We estimate our net product revenues bydeducting from our gross product revenues (a) trade allowances, such as discounts for prompt payment, (b) estimated government rebatesand chargebacks, (c) reserves for expected product returns and (d) estimated costs of our patient co-pay assistance program. We initiallyrecord estimates for these deductions at the time we recognize the gross revenue. We update our estimates on a recurring basis as newinformation becomes available. Trade Allowances: Through June 30, 2013, we offered our specialty pharmacy and specialty distributor customers a discount onKorlym sales for payment within 30 days and a small discount for providing data services. We expected these customers to earn thesediscounts and, accordingly, deducted them in full from gross product revenues and trade receivables at the time we recognized suchrevenues. Beginning in the third quarter of 2013, with the change in our sales model discussed above, we ceased incurring a prompt-payment discount on product sold through our specialty pharmacy and the cost of data services is now recorded as operating expense. Rebates and Chargebacks: We contract with Medicaid and other government programs so that Korlym will be eligible for purchaseby, or qualify for partial or full reimbursement from, such government programs. We estimate the rebates and chargebacks that we areobligated to provide to government programs and deduct these estimated amounts from our gross product sales at the time the revenues arerecognized. We base our estimates of these rebates and chargebacks upon (i) the discount amounts applicable to government-fundedprograms and (ii) the percentage of sales by our customers to patients who are covered by entities or programs that are eligible for suchrebates and chargebacks. Allowances for Patient Co-pay Assistance Program: We provide financial assistance to eligible patients whose insurance policiesrequire them to pay high deductibles and co-pays. We estimate the cost of assistance to be provided under this program by F-9 Table of ContentsCORCEPT THERAPEUTICS INCORPORATEDNOTES TO FINANCIAL STATEMENTS, Continued applying our actual experience regarding such assistance to our estimate of the percentage of our sales in the period that will be provided topatients covered by the program. Sales Returns: We estimate the amount of Korlym that we believe will be returned and deduct that estimated amount from grossrevenue at the time we recognize such revenue. When estimating future returns, we analyze quantitative and qualitative informationincluding, but not limited to, actual return rates, the amount of product in the distribution channel, the expected shelf life of such product,current and projected product demand, the introduction of competing products that may erode demand, and broad economic and industry-wide indicators. If we cannot reasonably estimate product returns with respect to a particular sale, we defer recognition of revenue from thatsale until we can make a reasonable estimate. Because our sales through Dohmen, our specialty pharmacy, which represents the majority of our sales from July 1, 2015 forward, aremade to individual patients who do not have the right to return the product, our exposure to product returns is limited to the specialtydistributor channel and is not expected to be material. Cost of Sales Cost of sales includes the cost of product (the cost to manufacture Korlym, which includes material, third-party manufacturing costsand indirect personnel and other overhead costs) based on units for which revenue is recognized in the current period, as well as costs ofstability testing, logistics and distribution of the product. We began capitalizing Korlym production costs and the cost to acquiremifepristone, the active ingredient (API) in Korlym, as inventory following approval by the FDA in February 2012. Prior to receiving FDAapproval for Korlym, we expensed all such costs when incurred as research and development expense. A portion of the productmanufactured and the API acquired prior to FDA approval was available for commercial use. As of December 31, 2014, the majority of thispre-approval material has been consumed and the cost of sales for 2015 and future years will include the full cost of the product. Research and Development Research and development expenses consist of costs incurred for research and development activities that we sponsor. These costsinclude direct expenses, such as the cost of clinical trials, pre-clinical studies, manufacturing development, preparations for submissions tothe FDA and other regulatory bodies and efforts to prosecute and defend those submissions and the development of second-generationcompounds, as well as research and development-related overhead expenses. We expense as incurred nonrefundable payments to thirdparties and our cost of acquiring technologies and materials used in research and development that have no alternative future use. We base our cost accruals for clinical trials, research and preclinical activities on estimates of work completed under serviceagreements, milestones achieved, patient enrollment and past experience with similar contracts. Our estimates of work completed andassociated cost accruals include our assessments of information from third-party contract research organizations and the overall status ofclinical trial and other development and administrative activities. Segment Reporting We determine our operating segments based on the way we organize our business to make operating decisions and assessperformance. We have only one operating segment, which concerns the discovery, development and commercialization of pharmaceuticalproducts. Stock-Based Compensation Stock-based compensation for employee and director options We account for stock-based compensation related to option grants to employees and directors under the fair value method, based onthe value of the award at the grant date as determined using the Black-Scholes option valuation model. For service-based awards, werecognize expense over the requisite service period. For options with performance-based vesting criteria, we begin to recognize expensewhen we believe there is a high degree of probability (i.e., greater than 70%) of achieving the vesting criteria. Stock-based compensation expense related to non-employees We recognize the expense of options granted to non-employees based on the fair-value based measurement of the option grants at thetime of vesting. For service-based awards, we recognize expense over the requisite service period. For options with F-10 Table of ContentsCORCEPT THERAPEUTICS INCORPORATEDNOTES TO FINANCIAL STATEMENTS, Continued performance-based vesting criteria, we recognize expense based on the minimum number of shares that will vest over time as the criteria aremet based on the Black-Scholes valuation of the vested shares. See Note 8 for a detailed discussion of stock-based compensation expense. Income Taxes We determine deferred tax assets and liabilities based on the differences between the financial reporting and tax bases of assets andliabilities, measured using the enacted tax rates that will be in effect when the differences are expected to reverse. A valuation allowance isrecorded when it is more likely than not that the deferred tax asset will not be realized. No amounts have been recognized as interest or penalties on income tax related matters. The determination of an accounting policyas to the classification of such costs has been deferred until such time as any such costs are incurred. Recently Issued Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2014-09, Revenuefrom Contracts with Customers. ASU 2014-09 supersedes the revenue recognition requirements in Revenue Recognition (Topic 605), andrequires entities to recognize revenue in a way that depicts the transfer of promised goods or services to customers in an amount that reflectsthe consideration to which the entity expects to be entitled in exchange for those goods or services. In applying this new guidance tocontracts within its scope, an entity will: (1) identify the contract(s) with a customer, (2) identify the performance obligation in the contract,(3) determine the transaction price, (4) allocate the transaction price to the performance obligations in the contract, and (5) recognizerevenue when (or as) the entity satisfies a performance obligation. Additionally, this new guidance will require significantly expandedrevenue recognition disclosures. This guidance, which will become effective for us as of January 1, 2017, is to be appliedretrospectively. Early application is not permitted. We are currently evaluating the new standard, but do not anticipate a material impact toour financial statements once implemented. In August 2014, the FASB issued ASU No. 2014-15, Disclosure of Uncertainties about an Entity's Ability to Continue as a GoingConcern, which requires an entity to evaluate whether conditions or events, in the aggregate, raise substantial doubt about the entity'sability to continue as a going concern for one year from the date the financial statements are issued or are available to be issued. Theguidance will become effective January 1, 2017. The adoption of ASU 2014-15 is not expected to have an impact on our financialstatements. 2. Significant Agreements Commercial Agreements In May 2013, we entered into a services agreement with Dohmen to provide exclusive specialty pharmacy and patient servicesprograms for Korlym beginning July 1, 2013. Under the terms of this agreement, Dohmen acts as the exclusive specialty pharmacydistributor of Korlym in the United States, subject to certain exceptions. Among other services, Dohmen provides services related topharmacy operations; patient intake, access and reimbursement; patient support; claims management and accounts receivable; and data andreporting. We provide Korlym to Dohmen, which it dispenses to patients. Dohmen does not take title to the product, which passes directlyfrom us to the patient at the time the patient receives the medicine. The initial term of the agreement is a period of three years, with successive automatic renewal terms of three years unless either partygives at least 180 days’ prior notice of non-renewal. The agreement contains customary termination provisions, representations, warrantiesand covenants. Subject to certain limitations, we have agreed to indemnify Dohmen for certain third party claims related to the product, andwe have each agreed to indemnify the other for certain breaches of representations, warranties, covenants and other specified matters. In May 2013, we gave notice to CuraScript, our previous specialty pharmacy provider, of our intent to terminate our agreement withthem effective July 20, 2013. In June 2013, we recorded a return reserve estimate of $300,000 for inventory that CuraScript had purchasedfrom us but had the right to return as a result of this termination. This amount, which was reflected as an adjustment to net revenue in ourStatement of Comprehensive Loss for the year ended December 31, 2013, was settled and paid to CuraScript during 2014. Our exposure toproduct returns is now limited to the specialty distributor channel and is not expected to be material. F-11 Table of ContentsCORCEPT THERAPEUTICS INCORPORATEDNOTES TO FINANCIAL STATEMENTS, Continued Manufacturing Agreements Related to Korlym Active Pharmaceutical Ingredient In March 2014, we entered into a new long-term manufacturing and supply agreement with PCAS for the manufacture of mifepristone,the active pharmaceutical agreement in Korlym. We have agreed to purchase a minimum percentage of our mifepristone requirements fromPCAS; the amount of the commitment will depend on our future needs. The initial term of the agreement is five years, with an automaticextension of one year unless either party gives 12 months’ prior written notice that it does not want an extension. We have the right toterminate the agreement if PCAS is unable to manufacture the product for a consecutive nine-month period. Tablet Manufacture In April 2014, we entered into a new manufacturing agreement with AAI Pharma for the manufacture and package Korlymtablets. The initial term of this agreement is a period of three years, with consecutive automatic extensions of two years unless either partygives written notice - in the case of AAI Pharma, 18 months prior to the end of the applicable term, and in our case 12 months prior to theend of the applicable term - that it does not want such an extension. We have the right to terminate the agreement if AAI Pharma is unableto manufacture the product for a consecutive four-month period or if the product is withdrawn from the market. There are no minimumpurchase obligations under this agreement. See the discussion above in Note 1, Basis of Presentation and Summary of Significant Accounting Policies - Credit Risks andConcentrations, for a further discussion of the business risks and mitigation measures taken in regard to tablet manufacture. Research and Development Agreements In 1998, we entered into an agreement with The Board of Trustees of Leland Stanford Junior University (Stanford) in which Stanfordgranted us an exclusive option to acquire an exclusive license for inventions and patents related to “Mifepristone for Psychotic MajorDepression” and “Mifepristone and Alzheimer’s Disease” owned by Stanford. (“Psychotic major depression” is referred to in this documentas “psychotic depression.”) In 1999, we exercised our option to acquire an exclusive license to patents covering the use of glucocorticoidreceptor antagonists for the treatment of psychotic depression, early dementia, and cocaine-induced psychosis, as specified in the licenseagreement. This license agreement expires upon the expiration of the related patents or upon notification by us to Stanford. In exchangefor the license, we paid Stanford an initial non-refundable fee, immediately issued 30,000 shares of our common stock to Stanford and areobligated to pay Stanford $50,000 per year as a nonrefundable royalty payment. In addition, we are obligated to pay additional milestonepayments in the future, which are not material and which are creditable against future royalties and will pay a royalty based on net revenuegenerated by any product arising from the patent until its expiration. In 2003, we entered into a contract research agreement with Argenta Discovery Limited (Argenta) in which Argenta agreed to conductresearch toward identifying a novel small molecule glucocorticoid receptor antagonist for the treatment of psychotic depression,Alzheimer’s disease, and other metabolic and psychiatric disorders. We continued our relationship with Argenta through the end of 2011,requesting them to conduct research projects on a regular basis. Under the agreements with Argenta, we may be obligated to makemilestone payments upon the occurrence of certain events, the amounts of which are not material. These obligations remain in force afterthe conclusion of work under the agreement. In January 2012, we entered into a Master Services Agreement with Sygnature DiscoveryLimited, a contract research company located in the United Kingdom, which does not obligate us to any milestone payments. Through 2014, we entered into agreements for services in connection with our ongoing Phase 3 trial of psychotic depression withICON Clinical Research, L.P. (ICON) and MedAvante, Inc. (MedAvante) to manage the trial and conduct patient screening and evaluationservices, which have been amended from time to time. This clinical trial was terminated during 2014 and all amounts due under thisagreement have been paid or accrued as of December 31, 2014. In November 2013, we licensed from the University of Chicago exclusive rights to the University’s U.S. Patent No.8,710,035 “Methods and Compositions Related to Glucocorticoid Receptor Antagonists and Breast Cancer”. In exchange for the license,we paid an initial non-refundable fee to the University of Chicago and are committed to additional annual and milestone payments in thefuture, which are not material and which are creditable against future royalties and will pay a royalty based on net revenue generated by anyproduct arising from the patent until its expiration. In December 2013, we entered into an agreement with Chiltern to assist in the management and conduct of a clinical trial evaluatingmifepristone for treatment of triple-negative breast cancer. The total commitment under this agreement is $2.9 million, but F-12 Table of ContentsCORCEPT THERAPEUTICS INCORPORATEDNOTES TO FINANCIAL STATEMENTS, Continued the actual amount to be paid is dependent on actual services provided under this agreement. Approximately $1.0 million of the costs underthis agreement were incurred through December 31, 2014, with the remainder to be incurred over the course of the trial. In March 2014, we entered into an agreement with Quotient Clinical Limited, a clinical research organization, to assist in themanagement and conduct of our Phase 1 study of CORT125134, one of our new compounds. The total commitment under the agreement isapproximately $2.6 million, which is expected to be expended over approximately a 1-year period. Approximately $1.5 million of thecosts under this agreement were incurred through December 31, 2014, with the remainder to be incurred over the course of the trial. 3. Fair Value of Financial Instruments As of December 31, 2014 and 2013, we had invested our financial assets in a money market fund that can be converted to cash at paron demand. We measured these funds, which totaled $21.9 million and $52.9 million as of December 31, 2014 and 2013, respectively, atfair value, which approximates cost, as of the respective dates and classified them as Level 1 assets in the fair value hierarchy for financialassets. All cash equivalents and short-term investments held as of December 31, 2014 and 2013 were in active markets and valued basedupon their quoted prices. We did not recognize any realized gains or losses on sales of investments for any period presented. 4. Composition of Certain Balance Sheet Items Inventory The composition of inventory was as follows: December 31, December 31, 2014 2013 (in thousands)Raw materials$3,595 $4,318 Work in progress 15 2 Finished goods 1,687 1,226 Total inventory 5,297 5,546 Less strategic inventory classified as non-current (4,090) (4,450)Total inventory classified as current$1,207 $1,096 The majority of the finished goods inventory as of December 31, 2014 and 2013 includes all costs of manufacture and packagingwith the exception of the cost of raw materials that were expensed prior to FDA approval. In order to be prepared for potential demand for Korlym and because we have single-source manufacturers of both the API for Korlymand Korlym tablets, we have invested in inventory of both of these materials. Inventory amounts that are not expected to be consumedwithin twelve months following the balance sheet date are referred to as “Strategic Inventory” and classified as a noncurrent asset. F-13 Table of ContentsCORCEPT THERAPEUTICS INCORPORATEDNOTES TO FINANCIAL STATEMENTS, Continued Property and Equipment Property and equipment consisted of the following: December 31, 2014 2013 (in thousands)Furniture and equipment$253 $183 Vehicles 65 38 Software 193 116 Leasehold improvements 14 14 525 351 Less: accumulated depreciation (289) (148) $236 $203 Other Accrued Liabilities Other accrued liabilities consisted of the following: December 31, 2014 2013 (in thousands)Accrued compensation$564 $466 Professional fees 330 369 Commercialization costs 556 288 Government rebates 275 40 Legal fees 120 110 Other 31 28 $1,876 $1,301 5. Long-Term Obligation As discussed in Note 1, Basis of Presentation and Summary of Significant Accounting Policies - Long-term Obligation, under theFinancing Agreement with Biopharma, we are obligated to make payments, calculated as a percentage of our net sales of Korlym, any futuremifepristone-based products, our selective GR antagonists (together referred to as Covered Products) and any upfront, milestone or othercontingent payments with respect to Covered Products. Biopharma’s right to receive payments will expire once it has received cumulativepayments of $45.0 million. We have made aggregate payments to Biopharma in the amount of $5.9 million through December 31, 2014,with an additional payment in the amount of $1.9 million made in February 2015. Under the terms of the Financing Agreement, our payments are variable, with no fixed minimums. If there are no net sales, upfront,milestone or other contingent payments in a period with respect to Covered Products, then no payment will be due for that period. F-14 Table of ContentsCORCEPT THERAPEUTICS INCORPORATEDNOTES TO FINANCIAL STATEMENTS, Continued We are obligated to make future payments as follows:·20 percent of our net product sales of Covered Products, subject to quarterly payment caps of $3.75 million during 2015. Thereis no quarterly cap on payments with respect to net product sales in 2016 and later.·20 percent of payments received for upfront, milestone or other contingent fees under co-promotion and out-license agreementsfor Covered Products (without application of quarterly caps).·The percentage used to calculate our payments to Biopharma would increase to 50 percent and any applicable payment capswould lapse if we (i) fail to provide Biopharma with certain information regarding our promotion and sales of Covered Products,(ii) do not devote a commercially reasonable amount of resources to the promotion and marketing of the Covered Products or(iii) violate the indebtedness covenant by incurring indebtedness greater than the sum of earnings before interest, taxes,depreciation and amortization, including such items as non-cash stock-based compensation, for the four calendar quarterspreceding such incurrence and, in each case, fail to cure within the applicable cure period.·Upon the occurrence of a Corcept change of control transaction or the licensing of Korlym to a third-party for promotion andsale in the United States, the entire $45.0 million, less any amounts already paid by us, would become due. To secure our obligations in connection with this Financing Agreement, we granted Biopharma a security interest in our rights inpatents, trademarks, trade names, domain names, copyrights, know-how and regulatory approvals related to the Covered Products, all booksand records relating to the foregoing and all proceeds of the foregoing (together, the Collateral). If we (i) fail to deliver a royalty paymentwhen due and do not remedy that failure within 30 days, (ii) fail to maintain a first-priority perfected security interest in the Collateral in theUnited States and do not remedy that failure within five business days of receiving notice of such failure or (iii) become subject to an eventof bankruptcy, then Biopharma may attempt to recover up to $45.0 million (after deducting any payments we have already made). Inaddition, pursuant to this agreement, we are not allowed to pay a dividend or other cash distribution, unless we will have cash and cashequivalents in excess of $50.0 million after such payment. The cash payment of $30.0 million received from Biopharma was recorded as a long-term obligation at issuance in August 2012. Asdiscussed in Note 1, Basis of Presentation and Summary of Significant Accounting Policies, Long-term Obligation, we make estimates ofthe timing of payments during the term of this agreement for purposes of calculating the expected rate of return to Biopharma, the accretionof related interest expense and the current portion of our obligation. Interest expense of $3.7 million and $4.4 million for the years endedDecember 31, 2014 and 2013, respectively, and total accreted interest of $9.8 million for the period from August 16, 2012, the date offunding of the Financing Agreement, through December 31, 2014, was calculated based on the internal interest rate to Biopharma thatwould result from these assumed payment streams. The timing of payment amounts will be based on actual Korlym Receipts recorded inthe financial statements over the term of this agreement and may differ from these estimates. While changes in the timing of Korlymrevenue may affect the timing of recognition of interest expense and the split between the current and long-term portions of the obligationat any balance sheet date, the aggregate amount to be repaid to Biopharma is fixed at $45.0 million. The carrying value of the long-term obligation was $33.9 million and $35.1 million as of December 31, 2014 and December 31, 2013,respectively. The long-term obligation, including accreted interest, is presented on the balance sheet in two components; the Long-termobligation - current portion, which equates to the estimated amount due under the agreement to be paid within twelve months following thebalance sheet date, and the remaining amount, which is included in Long-term obligation, net of current portion. The following table provides a summary of the payment obligations under the Financing Agreement as of December 31, 2014 and2013, utilizing the payment assumptions discussed above. December 31, December 31, 2014 2013 (in thousands)Total repayment obligation$45,000 $45,000 Less interest to be accreted in future periods (5,232) (8,910)Less payments made (5,881) (1,025)Less current portion (9,424) (5,743)Long-term obligation, net of current portion$24,463 $29,322 The estimated fair value of the long-term obligation, as measured using Level 3 inputs, approximates the carrying amounts aspresented on the balance sheet as of December 31, 2014 and 2013. The estimated fair value was calculated using the income method ofvaluation. The key assumptions required for the calculation were an estimate of the amount and timing of future product revenues and anestimated cost of capital. Management’s estimate of the future product revenues is subject to significant uncertainty due to the F-15 Table of ContentsCORCEPT THERAPEUTICS INCORPORATEDNOTES TO FINANCIAL STATEMENTS, Continued fact that Korlym has been available for less than three years and there is an extended time period associated with the Financing Agreement. We capitalized $140,000 of issuance costs related to the Financing Agreement, which are being amortized over the estimated term ofthe obligation, based on the assumptions discussed above. At December 31, 2014, the unamortized issuance costs were $58,000, and areincluded in other assets on our balance sheet. 6. Lease Obligations In May 2014, we exercised our option to extend the lease for our office space through December 2015. At December 31, 2014, theremaining minimum rental payments under this operating lease were $631,000. Through December 31, 2014, we have entered into operating leases for automobiles provided to our sales force and medical scienceliaisons. The leases are for periods of three years each. At December 31, 2014, the remaining obligation for base rental payments underthese leases was $180,000. Rent expense amounted to $609,000, $428,000 and $360,000, for the years ended December 31, 2014, 2013 and 2012, respectively. 7. Related Party Transactions See discussion below in Note 8, Preferred Stock and Stockholders’ Equity, under the caption Common Stock, regarding the sale ofsecurities in March 2012 to various investors, including members of our board of directors and related entities. 8. Preferred Stock and Stockholders’ Equity Preferred Stock The board of directors is authorized, subject to any limitations prescribed by law, without stockholder approval, to issue up to anaggregate of 10,000,000 shares of preferred stock at $0.001 par value in one or more series and to fix the rights, preferences, privileges andrestrictions granted to or imposed upon the preferred stock, including voting rights, dividend rights, conversion rights, redemptionprivileges and liquidation preferences. The rights of the holders of common stock will be subject to the rights of holders of any preferredstock that may be issued in the future. As of December 31, 2014 and 2013, we had no outstanding shares of preferred stock. Common Stock Significant stock transactions There were no transactions relating to the sale and issuance of common stock or the exercise and issuance of warrants during the twoyears ended December 31, 2014 and 2013, other than the exercise of a warrant in May 2014 that had been issued in a private placement inMarch 2008 (the March 2008 Financing). This warrant was exercised on a cashless net-exercise basis, wherein the investor surrendered awarrant for 529,567 shares in exchange for the issuance of 164,666 shares of common stock. The following paragraphs describe significanttransactions relating to the sale and issuance of common stock and the exercise and issuance of warrants during the year ended December31, 2012. Information regarding the issuance of common stock upon the exercise of stock options is discussed below under the caption,Stock Option Plans. Transactions during 2012 On March 29, 2012, we issued 4.2 million shares of our common stock upon the exercise of warrants that we had issued in a privateplacement transaction in April 2010 at an exercise price of $2.96 per share and sold new warrants to the same investors to purchase 4.2million shares of common stock at an exercise price of $4.05 per share. The new warrants are exercisable through March 29, 2015. Wegenerated net proceeds in these transactions of $12.8 million, after the deduction of issuance costs. Venture capital funds, trusts and otherentities affiliated with members of our Board of Directors purchased 40 percent of the securities sold in this transaction, with the remainderbeing purchased by other qualified investors. On July 6, 2012, we sold 11.0 million shares of our common stock in an underwritten public offering at a price to the public of$4.49 per share, generating net proceeds of $46.1 million after deducting expenses of the offering. F-16 Table of ContentsCORCEPT THERAPEUTICS INCORPORATEDNOTES TO FINANCIAL STATEMENTS, Continued During the year ended December 31, 2012, investors exercised additional warrants for the purchase of our common stock withexercise prices ranging from $1.66 to $2.96 per share. As a result, we issued an aggregate of 216,000 shares of common stock and generatedaggregate proceeds of $470,000. Registration Rights related to March 2008 Financing In March 2008, we sold 8.9 million shares of our common stock and warrants to purchase 4.5 million shares of our common stock inthe March 2008 Financing. The registration rights agreement covering securities issued in the March 2008 Financing provides that if wedo not fulfill certain of our obligations under the registration rights agreement, we will be required to pay liquidated damages to the holdersof the shares and warrants. We filed the registration statement covering the resale of the shares sold and shares underlying the warrants soldin this transaction with the Securities and Exchange Commission (SEC) on April 11, 2008, and it was declared effective by the SEC onNovember 10, 2008. During 2008, we recorded $1.3 million in liquidated damages to other non-operating expense because of the delay inthe effectiveness of the registration statement, which represented 5% of the purchase price. No separate contingent obligation has beenrecorded since that time as no additional liquidated damages have become probable of payment. No dividends have been declared or paid by us. Shares of common stock reserved for future issuance as of December 31, 2014 are as follows: Common stock:(in thousands)Exercise of outstanding options14,704 Exercise of warrants8,044 Shares available for grant under stock option plans7,546 30,294 On February 18, 2015, our Board of Directors authorized an increase of 4.1 million shares in the number of shares available under the2012 Incentive Award Plan (the 2012 Plan), which was equivalent to 4% of the shares of our common stock outstanding as ofDecember 31, 2014, pursuant to the terms of the 2012 Plan. Stock Option Plans We have three stock option plans – the 2000 Stock Option Plan (the 2000 Plan), the 2004 Equity Incentive Plan (the 2004 Plan) andthe 2012 Plan. As of December 31, 2014, all option grants under the 2000 Plan were fully vested and have either been exercised or expiredat the end of their contractual life. In 2004, our board of directors and stockholders approved the 2004 Plan, which became effective upon the completion of our InitialPublic Offering (IPO), after which time, no additional options have been or will be issued under the 2000 Plan. Under the 2004 Plan,options, stock purchase and stock appreciation rights and restricted stock awards can be issued to our employees, officers, directors andconsultants. The 2004 Plan provided that the exercise price for incentive stock options will be no less than 100% of the fair value of theCompany’s common stock, as of the date of grant. Options granted under the 2004 Plan vest over periods ranging from one to fiveyears. The vesting period of the options is generally equivalent to the requisite service period. In 2012, our board of directors and stockholders approved the 2012 Plan. As of the effective date of the 2012 Plan, 5.3 million sharesthat remained available for issuance of new grants under the 2004 Plan were transferred to the 2012 Plan. After that date, no additionaloptions were or will be issued under the 2004 Plan. Vested options under the 2000 Plan and the 2004 Plan that are not exercised within theremaining contractual life and any options under the 2004 Plan that do not vest because of terminations after the effective date of the 2012Plan will be added to the pool of shares available for future grants under the 2012 Plan. Under the 2012 Plan, we can issue options, stock purchase and stock appreciation rights and restricted stock awards to our employees,officers, directors and consultants. The 2012 Plan provides that the exercise price for incentive stock options will be no less than 100percent of the fair value of our common stock, as of the date of grant. Options granted under the 2012 Plan are expected to vest overperiods ranging from one to four years. We expect the vesting period of the options that we grant under the 2012 Plan to be generallyequivalent to the requisite service period. Upon exercise of options, new shares are issued. F-17 Table of ContentsCORCEPT THERAPEUTICS INCORPORATEDNOTES TO FINANCIAL STATEMENTS, Continued On February 6, 2014, our board of directors authorized an increase of 4.0 million shares in the number of shares available under the2012 Plan, which was equivalent to 4% of the shares of our common stock outstanding as of December 31, 2013, pursuant to the terms ofthe 2012 Plan. As of December 31, 2014, 7.5 million shares remained available for future grants under the 2012 Plan. See the discussionabove under Common Stock regarding an additional increase to the shares available for grant under the 2012 Plan that was authorized bythe Board of Directors in February 2015. Option activity during 2012, 2013 and 2014 The following table summarizes all stock plan activity: Outstanding Options Shares Available ForFuture Grant Options SharesSubject toOptionsOutstanding Weighted- Average Exercise PriceWeightedAverageRemainingContractualLife AggregateIntrinsicValue (in thousands) (in thousands) (in years) (inthousands)Balance at December 31, 20112,251 10,308 $2.86 Increase in shares authorized for grant3,369 — — Shares granted(1,695) 1,695 $3.26 Shares exercised — (165) $1.91 Shares expired under 2000 Plan11 (93) $7.00 Shares cancelled and forfeited under 2004 and2012 Plans119 (119) $3.26 Balance at December 31, 20124,055 11,626 $2.90 Increase in shares authorized for grant3,992 — — Shares granted(3,565) 3,565 $1.98 Shares exercised — (35) $1.58 Shares cancelled and forfeited444 (444) $4.58 Balance at December 31, 20134,926 14,712 $2.63 Increase in shares authorized for grant3,993 — — Shares granted(2,140) 2,140 $2.62 Shares exercised — (1,381) $1.34 Shares cancelled and forfeited767 (767) $5.03 Balance at December 31, 20147,546 14,704 $2.626.22$10,424 Options exercisable at December 31, 2014 10,489 $2.675.29$7,866 Options fully vested and expected to vest atDecember 31, 2014 14,704 $2.626.22$10,424 The total intrinsic value of options exercised during the years ended December 31, 2014, 2013 and 2012 was $3.0 million, $55,000and $303,000, respectively, based on the difference between the closing price of our common stock on the date of exercise of the optionsand the exercise price. The total grant date fair value of options to employees and directors that vested during the years ended December 31, 2014, 2013 and2012 was $4.6 million, $5.0 million and $5.0 million, respectively. F-18 Table of ContentsCORCEPT THERAPEUTICS INCORPORATEDNOTES TO FINANCIAL STATEMENTS, Continued The following is a summary of options outstanding and options exercisable at December 31, 2014. Options OutstandingOptions ExercisableExercise Prices OfOptionsNumber of SharesWeightedAverageRemainingContractual LifeWeightedAverageExercise PriceAggregateIntrinsic ValueNumber of SharesWeightedAverageExercisePriceAggregateIntrinsic Value (in thousands)(in years)(in thousands)(in thousands)(in thousands)$0.96-$2.004,885 5.0$1.49$7,355 3,907 $1.42$6,156 $2.01-$3.004,779 7.4$2.363,069 2,678 $2.361,710 $3.01-$4.504,844 6.5$3.92 —3,709 $4.08 —$4.51-$5.70196 0.5$5.02 —195 $5.02 — 14,704 6.2$2.62$10,424 10,489 $2.67$7,866 The aggregate intrinsic value in the table above represents the total pre-tax intrinsic value that option holders would have receivedhad all option holders exercised their options on December 31, 2014. The aggregate intrinsic value is the difference between our closingstock price on December 31, 2014 and the exercise price, multiplied by the number of in-the-money options. Stock-Based Compensation related to Employee and Director Options Assumptions used in determining fair value-based measurements for options to employees and directors The following table summarizes the weighted-average assumptions and resultant fair value-based measurements for options grantedto employees and directors. Year Ended December 31, 2014 2013 2012Weighted-average assumptions for stock options granted: Risk-free interest rate1.80% 1.76% 1.06%Expected term 6years 8.3years 6.7yearsExpected volatility of stock price79.0% 83.9% 86.6%Dividend rate0% 0% 0%Weighted average grant date fair value-based measurement$1.77 $1.54 $2.41 The expected term of options reflected in the table above has been based on a formula that considers the expected service period andexpected post-vesting termination behavior differentiated by whether the grantee is an employee, an officer or a director. The expected volatility of our stock used in determining the fair value-based measurement of option grants to employees, officers anddirectors is based on a weighted-average combination of the volatility of our own stock price and that of a group of peer companies forthose grants with expected terms longer than the period of time that we have been a public company. For stock options granted toemployees with expected terms of less than the period of time that we have been a public company, the volatility is based on historical dataof the price for our common stock for periods of time equivalent to the expected term of these grants. We apply a forfeiture rate of zero in our stock option expense calculations as we have a limited employee base and have experiencedminimal turnover. When an employee terminates, we will record a change in accounting estimate that represents the difference between theexpense recorded in the financial statements and the expense that would have been recorded based upon the rights to options that vestedduring the individual’s service as an employee. Summary of compensation expense related to options to employees and directors We recognized compensation expense of $4.7 million, $5.1 million and $5.1 million, related to options to employees and directorsduring the years ended December 31, 2014, 2013, and 2012, respectively. The data for the year ended December 31, 2012 include $1.3million of expense related to performance-based option awards to officers that vested upon the FDA approval of Korlym in February 2012,which is classified as selling, general and administrative expense. F-19 Table of ContentsCORCEPT THERAPEUTICS INCORPORATEDNOTES TO FINANCIAL STATEMENTS, Continued As of December 31, 2014, we had $7.1 million of unrecognized compensation expense for employee and director options outstandingas of that date, which had a remaining weighted-average vesting period of 2.5 years. Stock Options to Non-Employees We expense stock-based compensation related to service-based option grants to non-employees on a straight line basis over thevesting period of the options, which approximates the period over which the related services are rendered, based on the fair value-basedmeasurement of the options using the Black-Scholes option pricing model. The assumptions used in these calculations are similar to thoseused for the determination of fair value-based measurement for options granted to employees and directors, with the exception that, for non-employee options, the remaining contractual term is utilized as the expected term of the option and the fair value-based measurementrelated to unvested non-employee options is re-measured quarterly, based on the then current stock price as reflected on the NASDAQCapital Market. For options with performance-based vesting criteria, we recognize expense based on the minimum number of shares thatwill vest over time as the criteria are met based on the Black-Scholes valuation of the vested shares. We recorded charges to expense for non-employee stock options of $470,000, $127,000 and $208,000 for the years ended December31, 2014, 2013 and 2012, respectively. As of December 31, 2014, there are three awards outstanding to non-employees with an aggregate total of 149,000 shares unvested asof that date. Summary of Stock-based Compensation Expense The following table presents a summary of non-cash stock-based compensation by financial statement classification. Year ended December 31, 2014 2013 2012 (in thousands)Research and development expense$723 $618 $546 Selling, general and administrative expense 4,478 4,578 4,764 Total$5,201 $5,196 $5,310 Warrants Outstanding warrants at December 31, 2014 were as follows: Number of Exercise Expiration Shares Price Date (in thousands) March 2008 Financing3,842 $2.77 3/24/2015March 2012 Warrant Exchange4,202 $4.05 3/29/2015Total warrants outstanding8,044 All of our warrants may be exercised for cash at any time up to the expiration dates noted in the table above. In these instances, thenumber of shares issued will be equal to the number of warrant shares shown on each respective warrant. The warrants issued under the March 2008 Financing may be exercised pursuant to a cashless net-exercise, whereby the exercise costis satisfied through a reduction in the number of shares to be issued. In a net-exercise, the number of shares to be issued would be based onthe differential between the market value of our common stock at the time of the exercise and the exercise price of the shares underlying theoriginal warrant. The warrants issued under the March 2012 Warrant Exchange do not contain a net-exercise provision. 9. Net Loss Per Share Basic and diluted net loss per share is computed by dividing the net loss by the weighted-average number of common sharesoutstanding during the period. The computation of net loss per share for each period, including the number of weighted-average sharesoutstanding, is shown on the face of the statements of comprehensive loss. F-20 Table of ContentsCORCEPT THERAPEUTICS INCORPORATEDNOTES TO FINANCIAL STATEMENTS, Continued We have excluded the impact of common stock equivalents relating to shares underlying outstanding options and warrants from thecalculation of diluted net loss per common share because all such securities are antidilutive for all periods presented. The following table presents information on securities outstanding as of the end of each period that could potentially dilute the pershare data in the future. December 31, 2014 2013 2012 (in thousands)Stock options outstanding14,704 14,712 11,626 Warrants outstanding8,044 8,574 8,904 Total22,748 23,286 20,530 10. Income Taxes Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities forfinancial reporting purposes and the amounts used for income tax purposes. Significant components of our deferred tax assets are asfollows: December 31, 2014 2013Deferred tax assets:(in thousands)Federal and state net operating losses$65,012 $55,955 Capitalized research and patent costs 25,567 23,395 Research credits 22,789 21,252 Biopharma Financing Agreement 13,296 13,021 Stock-based compensation costs 6,410 5,398 Other 2,995 1,148 Total deferred tax assets 136,069 120,169 Valuation allowance (136,069) (120,169)Net deferred tax assets$ — $ — Realization of deferred tax assets is dependent upon future earnings, if any, the timing and amount of which areuncertain. Accordingly, the net deferred tax assets have been fully offset by a valuation allowance. The valuation allowance increased by$15.9 million, $15.9 million and $14.0 million, respectively, for the years ended December 31, 2014, 2013 and 2012, respectively. At December 31, 2014, we had net operating loss carryforwards available to offset any future taxable income that we may generate forfederal income tax purposes of $167.8 million, which expire in the years 2019 through 2034; California net operating loss carryforwards of$131.0 million, which expire in the years 2015 through 2034 and net operating losses carryforwards from other states of $18.8 million,which expire in the years 2024 through 2034. Our federal and state net operating loss carryforwards as of December 31, 2014 includeamounts resulting from exercises and sales of stock option awards to employees and non-employees. When we realize the tax benefitassociated with these stock option exercises as a reduction to taxable income in our returns, we will account for the tax benefit as a credit tostockholders’ equity rather than as a reduction of our income tax provision in our financial statements. Based upon our stock optionexercise history, we believe such amounts are not a material component of our total net operating loss carryforwards as of December 31,2014. We also had federal and California research tax credits of $21.0 million and $2.6 million, respectively. The federal research creditswill expire in the years 2019 through 2033 and the California research credits have no expiration date. Our deferred tax assets have beenoffset by a full valuation allowance as the realization of such assets is uncertain. Utilization of our net operating losses and tax credit carryforwards may be subject to substantial annual limitation due to theownership change limitations provided by the Internal Revenue Code and similar state provisions. Such limitations could result in theexpiration of the net operating losses and tax credit carryforwards before utilization. All tax years from inception remain open to examination by the Internal Revenue Service, the California Franchise Tax Board andother state taxing authorities until such time as the net operating losses and research credits are either fully utilized or expire. F-21 Table of ContentsCORCEPT THERAPEUTICS INCORPORATEDNOTES TO FINANCIAL STATEMENTS, Continued The following table presents a reconciliation from the statutory federal income tax rate to the effective rate. Year ended December 31, 201420132012(in thousands)U.S. federal taxes (benefit) at statutory rate$(10,670)$(15,644)$(12,936)Unutilized net operating loss11,002 16,181 13,853 Unutilized research credits(1,308)(1,515)(2,190)Non-deductible offset of Orphan Drug Credit249 383 827 Non-deductible stock based compensation673 567 404 Other54 28 42 Total$ —$ —$ — 11. Commitments We have entered into a number of agreements to conduct clinical trials and pre-clinical studies for further development of our leadproduct, Korlym, and our proprietary, selective GR antagonists. See the discussion in Note 2, Significant Agreements, for furtherdiscussion regarding the commitments under these agreements. In the ordinary course of our business, we make certain indemnities, commitments and guarantees under which we may be required tomake payments in relation to certain transactions. These include indemnities of clinical investigators and contract research organizationsinvolved in the development of our clinical stage product candidates, indemnities of contract manufacturers and indemnities to ourdirectors and officers to the maximum extent permitted under the laws of the State of Delaware. The duration of these indemnities,commitments and guarantees varies, and in certain cases, is indefinite. The majority of these indemnities, commitments and guarantees donot provide for any limitation of the maximum potential future payments that we could be obligated to make. We have not recorded anyliability for these indemnities, commitments and guarantees in the accompanying balance sheets. However, we would accrue for losses forany known contingent liability, including those that may arise from indemnification provisions, when future payment is probable. Nosuch losses have been recorded to date. 12. Quarterly Financial Data (Unaudited) The following table is in thousands, except per share amounts: Quarter EndedMarch 31 June 30 September 30 December 312014 Product sales, net$4,405 $5,851 $7,282 $9,013 Gross profit on product sales 4,231 5,636 7,047 8,755 Net loss (13,930) (7,552) (6,006) (3,895)Basic and diluted net loss per share (0.14) (0.07) (0.06) (0.04) 2013 Product sales, net$1,717 $1,891 $2,634 $4,115 Gross profit on product sales 1,697 1,868 2,594 4,055 Net loss (12,084) (11,897) (10,906) (11,124)Basic and diluted net loss per share (0.12) (0.12) (0.11) (0.11) F-22  Exhibit Index ExhibitNumberDescription of Document 3.1Amended and Restated Certificate of Incorporation, as amended (incorporated by reference to Exhibit 3.1 to the registrant’s Quarterly Report onForm 10-Q filed on August 9. 2012).3.2Amended and Restated Bylaws (incorporated by reference to Exhibit 3.1 to the registrant’s Current Report on Form 8-K filed on September 27,2007).4.1Specimen Common Stock Certificate (incorporated by reference to Exhibit 4.1 to the registrant’s Registration Statement on Form S-1 (RegistrationNo. 333-112676) filed on February 10, 2004).4.2Registration Rights Agreement by and among Corcept Therapeutics Incorporated and the investors signatory thereto, dated March 14, 2008(incorporated by reference to Exhibit 10.25 to the registrant’s Annual Report on Form 10-K filed on March 31, 2008).4.3Amendment to Registration Rights Agreement by and among Corcept Therapeutics Incorporated and the investors signatory thereto, datedNovember 11, 2008 (incorporated by reference to Exhibit 10.30 to the registrant’s Annual Report on Form 10-K filed on March 31, 2009).4.4Registration Rights Agreement dated as of April 21, 2010 by and among Corcept Therapeutics Incorporated and the investors signatory thereto(incorporated by reference to Exhibit 4.2 to the registrant’s Current Report on Form 8-K filed on April 23, 2010).4.5Registration Rights Agreement, dated as of March 29, 2012, by and among Corcept Therapeutics Incorporated and the investors signatory thereto(incorporated by reference to Exhibit 4.2 to the registrant’s Current Report on Form 8-K filed on March 29, 2012).4.6Form of Warrant issued in connection with the Securities Purchase Agreement by and among Corcept Therapeutics Incorporated and thepurchasers named therein, dated March 14, 2008 (incorporated by reference to Exhibit 4.4 to the registrant’s Annual Report on Form 10-K filedon March 31, 2008).4.7Form of Warrant issued in connection with Warrant Purchase Agreement dated as of March 25, 2012 by and among Corcept TherapeuticsIncorporated and the purchasers named therein (incorporated by reference to Exhibit 4.2 to the registrant’s Current Report on Form 8-K filed onMarch 29. 2012).10.12000 Stock Option Plan (incorporated by reference to Exhibit 10.1 to the registrant’s Registration Statement on Form S-1 (Registration No. 333-112676) filed on February 10, 2004).10.2License Agreement by and between The Board of Trustees of the Leland Stanford Junior University and Corcept Therapeutics Incorporated, datedas of July 1, 1999 (incorporated by reference to Exhibit 10.6 to the registrant’s Registration Statement on Form S-1 (Registration No. 333-112676) filed on February 10, 2004).10.3Master Services Agreement by and between Corcept Therapeutics Incorporated and PPD Development, LP, dated as of January 17, 2003(incorporated by reference to Exhibit 10.12 to the registrant’s Registration Statement on Form S-1/A (File No. 333-112676) filed on March 19,2004).10.4Manufacturing Agreement with Produits Chimiques Auxiliaires et de Synthese SA, dated November 8, 2006 (incorporated by reference to Exhibit10.15 to the registrant’s Annual Report on Form 10-K filed on April 2, 2007).10.5Form of Indemnification Agreement for directors and officers approved by the Board of Directors on September 24, 2007 (incorporated byreference to Exhibit 10.7 to the registrant’s Quarterly Report on Form 10-Q filed on November 14, 2007).10.6Securities Purchase Agreement by and among Corcept Therapeutics Incorporated and the purchasers named therein, dated March 14, 2008(incorporated by reference to Exhibit 10.24 to the registrant’s Annual Report on Form 10-K filed on March 31, 2008).10.7Master Service Agreement by and among Corcept Therapeutics Incorporated and ICON Clinical Research, L.P., signed on June 4, 2008(incorporated by reference to Exhibit 10.5 to the registrant’s Quarterly Report on Form 10-Q filed on August 14, 2008).10.8Amended and Restated Severance and Change in Control Agreement by and between Corcept Therapeutics Incorporated and Joseph K. Belanoff,M. D., dated September 19, 2008 (incorporated by reference to Exhibit 10.25 to the registrant’s Annual Report on Form 10-K filed on March 31,2009).10.9Amended and Restated Severance and Change in Control Agreement by and between Corcept Therapeutics Incorporated and Robert L. Roe, M.D., dated September 19, 2008 (incorporated by reference to Exhibit 10.26 to the registrant’s Annual Report on Form 10-K filed on March 31,2009).10.10Amended and Restated Severance and Change in Control Agreement by and between Corcept Therapeutics Incorporated and Anne M. LeDoux,dated September 19, 2008 (incorporated by reference to Exhibit 10.27 to the registrant’s Annual Report on Form 10-K filed on March 31, 2009).10.11Amended and Restated Severance and Change in Control Agreement by and between Corcept Therapeutics Incorporated and James N. Wilson,dated September 19, 2008 (incorporated by reference to Exhibit 10.28 to the registrant’s Annual Report on Form 10-K filed on March 31, 2009).10.12Securities Purchase Agreement by and among Corcept Therapeutics Incorporated and the purchasers named therein, dated October 12, 2009(incorporated by reference to Exhibit 10.1 to the registrant’s Quarterly Report on Form 10-Q filed on November 12, 2009). F-1 †#†#†††† 10.13Amended and Restated 2004 Equity Incentive Plan (incorporated by reference to the registrant’s Proxy Statement on Schedule 14A filed on May7, 2009).10.14Form of Option Agreement for options granted pursuant to the Amended and Restated 2004 Equity Incentive Plan (incorporated by reference toExhibit 10.25 to the registrant’s Annual Report on Form 10-K filed on March 15, 2011).10.15Development Agreement by and between Corcept Therapeutics Incorporated and Formulation Technologies L.L.C. d/b/a PharmaForm, dated as ofDecember 14, 2006 (incorporated by reference to Exhibit 10.28 to the registrant’s Annual Report on Form 10-K filed on March 15, 2011).10.16Master Services Agreement by and between Corcept Therapeutics Incorporated and United BioSource Corporation, dated as of June 29, 2010(incorporated by reference to Exhibit 10.29 to the registrant’s Annual Report on Form 10-K filed on March 15, 2011).10.17Employment offer letter to Steven Lo, dated August 9, 2010 (incorporated by reference to Exhibit 10.1 to the registrant’s Quarterly Report onForm 10-Q filed on November 12, 2010). 10.18Severance and Change in Control Agreement by and between Corcept Therapeutics Incorporated and Steven Lo, dated September 15, 2010(incorporated by reference to Exhibit 10.2 to the registrant’s Quarterly Report on Form 10-Q filed on November 12, 2010).10.19Severance and Change in Control Agreement by and between Corcept Therapeutics Incorporated and G. Charles Robb, dated September 1, 2011(incorporated by reference to Exhibit 10.2 to the registrant’s Quarterly Report on Form 10-Q filed on November 8, 2011).10.20Employment offer letter to G. Charles Robb dated August 12, 2011 (incorporated by reference to Exhibit 10.1 to the registrant’s Quarterly Reporton Form 10-Q filed on November 8, 2011).10.21Manufacturing and Supply Agreement with Formulation Technologies, LLC D/B/A PharmaForm, LLC, dated March 21, 2012 (incorporated byreference to Exhibit 10.1 to the registrant’s Quarterly Report on Form 10-Q filed on May 10, 2012).10.22Warrant Purchase Agreement, dated as of March 25, 2012, by and among Corcept Therapeutics Incorporated and the purchasers named therein(incorporated by reference to Exhibit 10.1 to the registrant’s Current Report on Form 8-K filed on March 29, 2012).10.23Commercial Outsourcing Services Agreement with Integrated Commercialization Solutions, Inc., dated as of April 14, 2011 (incorporated byreference to Exhibit 10.1 to the registrant’s Quarterly Report on Form 10-Q filed on August 9, 2012).10.24Amended and Restated Exclusive Pharmacy Product Purchase and Services Agreement with CuraScript, Inc., dated August 8, 2012 (incorporatedby reference to Exhibit 10.2 to the registrant’s Quarterly Report on Form 10-Q filed on August 9, 2012).10.25Corcept Therapeutics Incorporated 2012 Incentive Award Plan (incorporated by reference to Appendix A to the registrant’s Definitive ProxyStatement on Schedule 14A filed with the SEC on May 21, 2012).10.26Form of 2012 Incentive Award Plan Stock Option Grant Notice and Agreement (incorporated by reference to Exhibit 4.5 to the registrant’sRegistration Statement on Form S-8 filed with the SEC on August 13, 2012).10.27Purchase and Sale Agreement with between Corcept Therapeutics Incorporated and Biopharma Secured Debt Fund II Sub, S.à r.l,, dated as ofAugust 2, 2012 (incorporated by reference to Exhibit 10.4 to the registrant’s Quarterly Report on Form 10-Q filed on November 8, 2012).10.28Amendment to Manufacturing Agreement with Produits Chimiques Auxiliaires et de Synthese SA, dated February 21, 2013 (incorporated byreference to Exhibit 10.31 to the registrant’s Annual Report on Form 10‑K filed on March 15, 2013). 10.29Pharmaceutical Manufacturer Services Agreement with Centric Health Resources, Inc., dated May 21, 2013 (incorporated by reference to Exhibit10.1 to the registrant’s Quarterly Report on Form 10-Q filed on August 9, 2013).10.30Letter agreement with Robert L. Roe, M.D. regarding terms of retirement and consulting arrangement, dated June 21, 2013 (incorporated byreference to Exhibit 10.2 to the registrant’s Quarterly Report on Form 10-Q filed on August 9, 2013).10.31Amendment to Pharmaceutical Manufacturer Services Agreement with Centric Health Resources, Inc., dated July 22, 2013 (incorporated byreference to Exhibit 10.3 to the registrant’s Quarterly Report on Form 10-Q filed on August 9, 2013).10.32Amendment to Manufacturing Agreement with Produits Chimiques Auxiliaires et de Synthese SA, dated August 1, 2013 (incorporated byreference to Exhibit 10.4 to the registrant’s Annual Report on Form 10‑K filed on August 9, 2013).10.33Amendment to Manufacturing Agreement with Produits Chimiques Auxiliaires et de Synthese SA, dated November 7, 2013 (incorporated byreference to Exhibit 10.1 to the registrant’s Quarterly Report on Form 10-Q filed on November 12, 2013).10.34Amendment to Manufacturing Agreement with Produits Chimiques Auxiliaires et de Synthese SA, dated January 27, 2014.10.35Consulting agreement with Robert L. Roe, M.D., dated January 7, 2014 (incorporated by reference to Exhibit 10.1 to the registrant’s QuarterlyReport on Form 10-Q filed on May 12, 2014).10.36Manufacturing and Supply Agreement with Produits Chimiques Auxiliaires et de Synthese SA, dated March 20, 2014 (incorporated by referenceto Exhibit 10.2 to the registrant’s Quarterly Report on Form 10-Q filed on May 12, 2014).10.37First Amendment to the Commercial Outsourcing Services Agreement with Integrated Commercialization Solutions, Inc., effective as of April 14,2014 (incorporated by reference to Exhibit 10.1 to the registrant’s Quarterly Report on Form 10-Q filed on August 8, 2014). F-2 ††##††††###††##†## 10.38Manufacturing Agreement with AAI Pharma Services Corp., dated April 7, 2014 (incorporated by reference to Exhibit 10.2 to the registrant’sQuarterly Report on Form 10-Q filed on August 8, 2014).10.39Second Amendment to the Commercial Outsourcing Services Agreement with Integrated Commercialization Solutions, Inc., effective as of June11, 2014 (incorporated by reference to Exhibit 10.3 to the registrant’s Quarterly Report on Form 10-Q filed on August 8, 2014).10.40Third Amendment to the Commercial Outsourcing Services Agreement with Integrated Commercialization Solutions, Inc., effective as of August11, 2014 (incorporated by reference to Exhibit 10.3 to the registrant’s Quarterly Report on Form 10-Q filed on November 7, 2014).10.41Second Amendment to Pharmaceutical Manufacturer Services Agreement with Dohmen Life Science Services, LLC (as successor in interestto Centric Health Resources, Inc.), dated October 6, 2014.23.1Consent of Independent Registered Public Accounting Firm24.1Power of Attorney (See signature page)31.1Certification pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934 of Joseph K. Belanoff, M.D.31.2Certification pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934 of G. Charles Robb32.1Certification pursuant to 18 U.S.C. Section 1350 of Joseph K. Belanoff, M.D.32.2Certification pursuant to 18 U.S.C. Section 1350 of G. Charles Robb101The following materials from the registrant’s Annual Report on Form 10-K for the year ended December 31, 2014, formatted in ExtensibleBusiness Reporting Language (XBRL): (i) Balance Sheets at December 31, 2014 and 2013, (ii) Statements of Comprehensive Loss for the YearsEnded December 31, 2014, 2013 and 2012, (iii) Statements of Stockholders’ Equity for the Years Ended December 31, 2014, 2013, and 2012,(iv) Statements of Cash Flows for the Years Ended December 31, 2014, 2013 and 2012, and (v) Notes to Financial Statements. Confidential treatment requestedConfidential treatment grantedManagement contract or compensatory plan or arrangement F-3######† Exhibit 10.41SECOND AMENDMENTTOPHARMACEUTICAL MANUFACTURER SERVICES AGREEMENT This Second Amendment to Pharmaceutical Manufacturer Services Agreement (this“Amendment”) is made and entered into as of October 6, 2014 by and between CORCEPTTHERAPEUTICS INCORPORATED, a Delaware corporation (“Client” or “Corcept”), andDOHMEN LIFE SCIENCE SERVICES, LLC (AS SUCCESSOR-IN-INTEREST TO CENTRICHEALTH RESOURCES, INC.), a Wisconsin limited liability company (“DLSS”). WHEREAS, Client and DLSS entered into that certain Pharmaceutical Manufacturer ServicesAgreement dated effective as of May 21, 2013, as amended (the “Agreement”); and WHEREAS, the parties hereto now desire to amend and supplement the Agreement ashereinafter provided. NOW, THEREFORE, in consideration of the mutual covenants, terms and conditions set forthherein, the parties agree as follows: 1. Defined Terms. All capitalized terms not specifically defined herein will have themeanings given to such terms in the Agreement. 2. References to DLSS & CHR. All references to DLSS and CHR in the Agreement orthis Amendment shall mean Dohmen Life Science Services, LLC. 3. Additional Services. In accordance with Section 2.6 of the Agreement, the partieshereto agree that DLSS shall perform the additional services set forth in Schedule A attached to thisAmendment (the “Second Amendment Services”). All references in the Agreement to the term“Services” shall include the Second Amendment Services. DLSS shall invoice Client on a monthlybasis for the Second Amendment Services according to the pricing set forth in Schedule B attached tothis Amendment, and subject to the terms set forth in Article IV of the Agreement. 4. Amendment to Reporting Fee. Description (4) Reporting contained in Exhibit B -Pricing Schedule of the Agreement is hereby amended and restated as set forth below. All other feescontained in Exhibit B shall remain in full force and effect. DESCRIPTIONFEETIMING(4) Reporting[***][***] 5. Amendment to Exhibit B. The following is hereby added at the end of Exhibit B -Pricing Schedule of the Agreement: The Fee set forth in Description #2 and #4 above will each be automatically adjusted by DLSS,effective as of January 1 of each calendar year, commencing with January 1, 2015, by the annualaverage percentage increase in the Consumer Price Index (“CPI-U”),Confidential treatment has been requested for portions of this exhibit. The copy filed herewith omits theinformation subject to the confidentiality request. Omissions are designated as [***]. A complete version ofthis exhibit has been filed separately with the Securities and Exchange Commission. U.S. City Average, All Items, published monthly by the Bureau of Labor Statistics of the U.S.Department of Labor (or if the Index is no longer published or issued, any successor index orother reliable governmental or nonpartisan publication evaluating the information previouslyused in the determination of the index that is mutually selected by the parties) for the mostrecently completed 12 month period for which the CPI-U percentage is available at the time theadjustment calculation is performed by DLSS. 6. Miscellaneous. (a) Except as otherwise expressly amended herein, all terms and provisions of theAgreement shall remain in full force and effect. (b) In the event of any conflict or inconsistency between the provisions of thisAmendment and the provisions of the Agreement, the provisions of this Amendment shall control. (c) This Amendment shall be governed by and construed in accordance with thelaws of the State of Missouri. (d) This Amendment may be executed simultaneously in two or more counterparts,and by PDF or other electronic transmission, each of which counterparts shall be deemed an original,but all of which together shall constitute one and the same instrument, provided that all suchcounterparts, in the aggregate, shall contain the signatures of all parties hereto. [Signature Page(s) to Follow] 2 IN WITNESS WHEREOF, the parties have caused this Amendment to be executed by dulyauthorized representatives as of the date first set forth above. DOHMEN LIFE SCIENCE SERVICES, LLCBy: /s/ Cynthia Laconte_____________________________________Name: Cynthia Laconte___________________________________Title: CEO ____________________________________ CORCEPT THERAPEUTICS INCORPORATEDBy: /s/ Steven Lo_____________________________________Name: Steven Lo___________________________________Title: SVP, Chief Commercial Officer____________________________________ 3  SCHEDULE ADLSS and Corcept will create a customized operational blue print outlining the specifications toguide the implementation for the Korlym 3PL service program including order to cash management,order fulfillment, logistics and distribution support, invoicing and cash collections, inventorymanagement, and reporting services (the “3PL Program”).For all purposes of the Agreement, the term “Program” shall include the 3PL Program. The services to be included in the 3PL Program shall be as follows:A.Third Party Logistics:·Corcept’s current 3PL services will be transferred from current vendor to DLSS effectiveOctober, 2014·DLSS will receive and fulfill orders from [***] or any successor or additional Corceptspecialty distribution customers participating in Program services (collectively referred to as“Customer”)·DLSS will be the exclusive provider for distributing Korlym to Customer for orphan productindications·DLSS will receive inventory, including the initial stocking order, from Corcept’s 3PL, ICS,located in Louisville, KY and Product manufacturer, AAIPharma, located in Wilmington,NC·Korlym will be stored and shipped at ambient (20-25ºC) conditions·Corcept will supply Korlym in 28 or 280 count bottles packaged 12 bottles per case·DLSS will store Product at two sites, one located in Memphis, TN and the other located inChesterfield, MO·DLSS will manage the transfer of Product from Memphis to Chesterfield (upon approvalfrom Corcept) in support of a “Just-in-Time” inventory supply·DLSS is expected to store [***] months of Product inventory at the Chesterfield location and[***] months of inventory at the Memphis location on a monthly basis Monthly ordersreceived will be in the range of [***] per month·The average order size will be approximately [***] of Product per order·DLSS will receive Product directly from Corcept’s manufacturing partner on a go forwardbasis·DLSS will inventory on average [***] pallets of Product on a monthly basis·DLSS will manage DLSS-located inventory·DLSS shall ship all Product on a First Expired First Out (“FEFO”) basis unless otherwisedirected and/or agreed upon by Corcept·Product shall be shipped according to Corcept’s recommendations and specification, withpacking materials to be agreed between Corcept and DLSS·DLSS will oversee and manage all Product returned from customers ·DLSS will manage the disposition of returned Product based upon Corcept’s instructions·DLSS will develop and manage Corcept program specific SOPs in accordance withCorcept’s specifications and approval [***] Certain information on this page has been omitted and filed separately with the Securities and Exchange Commission. Confidentialtreatment has been requested with respect to the omitted portions. B.Invoicing and Accounts Receivable:·Corcept will be responsible for managing Customer purchase price and communicated suchpricing to DLSS·Corcept will managing Customer chargebacks, as applicable, relating to processed orders·DLSS will managing the invoicing and billing to Customer for orders placed on a monthlybasis·DLSS will contact the appropriate parties in accordance with Corcept program specificSOPs·DLSS will manage collections efforts in accordance with Customer pricing schedule asdirected by Corcept·DLSS will maintain the ability to process credit card payments ·DLSS will develop and manage Corcept program specific SOPs in accordance withCorcept’s specifications and approval C.Data & Reporting:·DLSS will provide reporting to Corcept including billing and collections, inventory, anddistribution reports·Inventory reporting will include DLSS receipts, shipments, on-hand, on hold, returns·DLSS will maintain an operations system for the purposes of order processing, distribution,billing of Customer and management of accounts receivables·DLSS will maintain and track shipments·DLSS will track distributed Korlym, by appropriate lot number·DLSS will provide other data as requested and agreed to by both parties 2  SCHEDULE BPRICING SCHEDULEDescriptionFeeTiming1) Design and DevelopmentImplementation Services -Administration and initial Clientand Product set up andimplementation including:logistical and distribution planning,set-up and training, order to cashsetup, and fulfillment.[***]One Time2) Distribution, Fulfillment,Storage, Order to Cash, CustomerService, Invoicing and A/RManagement, Inventory andReturns management, andChargeback support for Product[***][***]3) Reporting – Real-time reportingvia online portal[***][***]4) SuppliesPass through actual costsPer Shipment5) Shipping Fees Pass through actual costsPer Shipment6) Special Project Services(Ad-hoc)Estimate of time and cost to beprovided by DLSS and approvedby Corcept prior to start of work. [***]Per HourThe Fee set forth in Description #2 and #3 above will each be automatically adjusted by DLSS,effective as of January 1 of each calendar year, commencing with January 1, 2015, by the annualaverage percentage increase in the Consumer Price Index (“CPI-U”), U.S. City Average, AllItems, published monthly by the Bureau of Labor Statistics of the U.S. Department of Labor (orif the Index is no longer published or issued, any successor index or other reliable governmentalor nonpartisan publication evaluating the information previously used in the determination of theindex that is mutually selected by[***] Certain information on this page has been omitted and filed separately with the Securities and Exchange Commission. Confidentialtreatment has been requested with respect to the omitted portions. the parties) for the most recently completed 12 month period for which the CPI-U percentage isavailable at the time the adjustment calculation is performed by DLSS. Payment TermsInvoice for services issued on the first of each month for the prior month, due net 30 from receipt date ofinvoice. Service charges will apply for each day past the due date at a rate of 1.5% per month. 2 Exhibit 23.1CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMWe consent to the incorporation by reference in the following Registration Statements:(1)Registration Statements (Form S-8 Nos. 333-150199, 333-158406, 333-164531, 333-172841 and333-180073) pertaining to the Amended and Restated 2004 Equity Incentive Plan of CorceptTherapeutics Incorporated, (2)Registration Statement (Form S-8 Nos. 333-183284, 333-187316 and 333-194663) pertaining to the 2012Incentive Award Plan for Corcept Therapeutics Incorporated, and (3)Registration Statements (Form S-3 Nos. 333- 150204, 333-181672 and 333-194664) of CorceptTherapeutics Incorporated and in the related Prospectuses; of our reports dated March 13, 2015, with respect to the financial statements of Corcept TherapeuticsIncorporated and the effectiveness of internal control over financial reporting of Corcept TherapeuticsIncorporated included in this Annual Report (Form 10-K) of Corcept Therapeutics Incorporated for the year endedDecember 31, 2014. /s/ Ernst & Young LLP Redwood City, CaliforniaMarch 13, 2015 Exhibit 31.1CERTIFICATIONI, Joseph K. Belanoff, M.D., certify that:1.I have reviewed this Annual Report on Form 10-K for the period ended December 31, 2014 of Corcept Therapeutics Incorporated;2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary tomake the statements made, in light of the circumstances under which such statements were made, not misleading with respect to theperiod covered by this report;3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all materialrespects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;4.The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (asdefined in Exchange Act Rules 13a-15(e) and 15d-15(e) and internal control over financial reporting (as defined in Exchange ActRules 13a-15(f) and 15d-15(f)) for the registrant and have:(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under oursupervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known tous by others within those entities, particularly during the period in which this report is being prepared;(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designedunder our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation offinancial statements for external purposes in accordance with generally accepted accounting principles;(c)Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusionsabout the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on suchevaluation; and(d)Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant'smost recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or isreasonably likely to materially affect, the registrant's internal control over financial reporting; and5.The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financialreporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing theequivalent functions):(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting whichare reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’sinternal control over financial reporting. /s/ Joseph K. Belanoff Joseph K. Belanoff, M.D. Chief Executive Officer and President March 13, 2015  Exhibit 31.2CERTIFICATIONI, G. Charles Robb, certify that:1.I have reviewed this Annual Report on Form 10-K for the period ended December 31, 2014 of Corcept Therapeutics Incorporated;2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary tomake the statements made, in light of the circumstances under which such statements were made, not misleading with respect to theperiod covered by this report;3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all materialrespects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;4.The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (asdefined in Exchange Act Rules 13a-15(e) and 15d-15(e) and internal control over financial reporting (as defined in Exchange ActRules 13a-15(f) and 15d-15(f)) for the registrant and have:(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under oursupervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known tous by others within those entities, particularly during the period in which this report is being prepared;(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designedunder our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation offinancial statements for external purposes in accordance with generally accepted accounting principles;(c)Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusionsabout the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on suchevaluation; and(d)Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant'smost recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or isreasonably likely to materially affect, the registrant's internal control over financial reporting; and5.The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financialreporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing theequivalent functions):(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting whichare reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’sinternal control over financial reporting. /s/ G. Charles Robb G. Charles Robb Chief Financial Officer and Secretary March 13, 2015 Exhibit 32.1 Corcept Therapeutics IncorporatedCERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TOSECTION 906 OF THE SARBANES-OXLEY ACT OF 2002In connection with the Annual Report of Corcept Therapeutics Incorporated (the “Company”) on Form 10-K for the period ended December31, 2014, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Joseph K. Belanoff, M.D., ChiefExecutive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-OxleyAct of 2002, that:(1)The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations ofthe Company. /s/ Joseph K. Belanoff Joseph K. Belanoff, M.D. Chief Executive Officer and President March 13, 2015 This certification is not deemed filed with the Securities and Exchange Commission and is not to be incorporated by reference into anyfiling of Corcept Therapeutics Incorporated under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, asamended, irrespective of any general incorporation language contained in such filing. Exhibit 32.2 Corcept Therapeutics IncorporatedCERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 In connection with the Annual Report of Corcept Therapeutics Incorporated (the “Company”) on Form 10-K for the period ended December31, 2014, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, G. Charles Robb, Chief FinancialOfficer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002,that:(1)The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations ofthe Company. /s/ G. Charles Robb G. Charles Robb Chief Financial Officer and Secretary March 13, 2015 This certification is not deemed filed with the Securities and Exchange Commission and is not to be incorporated by reference into anyfiling of Corcept Therapeutics Incorporated under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, asamended, irrespective of any general incorporation language contained in such filing. 

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