Corcept Therapeutics Incorporated

Good afternoon. Today we issued a press release announcing our financial results for the first quarter and providing a corporate update. A copy is available at coursep.com.

Complete results will be available when we file our Form 10-Q with the SEC. Today's call is being recorded. A replay will be available through May 18th at 888-203-1112 in the United States and 719-457-0820 internationally. The passcode will be 282-7359. Statements during this call, other than statements of historical fact, are forward-looking statements based on our plans and expectations that are necessarily subject to risks and uncertainties which might cause actual results to differ materially from those such statements express or imply. These risks and uncertainties include, but are not limited to, our ability to operate our business and achieve our goals during the COVID-19 pandemic and thereafter, generate sufficient revenue and cash reserves to fund our commercial operations and development programs, The availability of competing treatments, including generic versions of Coralim, the initiation or outcome of litigation, our ability to obtain acceptable prices or adequate insurance coverage and reimbursement for Coralim, and risks related to the development of our product candidates, including their clinical attributes, regulatory approvals, mandates, oversight, and other requirements, and the impact of the COVID-19 pandemic on our employees, consultants, and vendors, as well as on physicians, patients, insurers, regulators, and the practice of medicine generally. These and other risks are set forth in our SEC filings which are available at our website and the SEC's website. On this call, forward-looking statements include those concerning our 2020 revenue guidance, cash flow, and our expected growth, impact of the COVID-19 pandemic on our commercial operations, financial performance, clinical development programs, physicians, payers, and patients. Physician awareness of hypercortisolism and the selection of quorum as the optimum medical treatment. The timing, cost, and outcome of litigation, including our lawsuit against Teva Pharmaceuticals and Sun Pharmaceuticals, and Teva's challenge to our intellectual property before the Patent, Trial, and Appeals Board. The scope and protective power of our intellectual property, the progress, enrollment, timing, design, and results of our clinical trials, and the clinical and commercial attributes of relic-correlant, exocorrelant, neurocorrelant and our other selective cortisol modulators. We disclaim any intention or duty to update forward-looking statements. Our revenue in the first quarter was $93.2 million, a 44% increase from the first quarter of 2019. We have maintained our 2020 revenue guidance of between $355 and $375 million. First quarter gap net income was $30.1 million compared to $18.3 million in the same period last year, excluding non-cash expenses related to stock-based compensation and the utilization of deferred tax assets, together with related income tax effects. Non-gap net income in the first quarter was $41.2 million compared to $24.3 million in the first quarter of 2019. Our cash and investments increased $33.7 million in the first quarter to a balance of $349 million at March 31st. Now, a brief legal update. In February, we prevailed in a challenge to the validity of one of our patents, the 348 patent, brought before the Patent Office Trial and Appeals Board, or PTAB, by Neptune Generics, a subsidiary of the litigation finance firm Burford Capital. Neptune had threatened to attack the 348 patent unless we paid Neptune a substantial fee. We refused. As I reported on our last call, we won. The PTAB found every claim of the 348 patent to be valid. I'm pleased to report on this call that Neptune did not appeal the PTAB's decision. The matter is now closed. Our rights were wrongly attacked and we defended them. The 348 patent will continue to play its part in our lawsuits against Teva and Sun It's validity bolstered by the PTAB's ruling in our favor. In March 2018, we sued Teva Pharmaceuticals to stop it from marketing a generic version of Coraline that would violate our patents. Our lawsuit stayed final FDA approval of Teva's proposed product until August 1st of this year. As we have been issued additional applicable patents over the past two years, we have asserted them against Teva. Our separate actions have now been consolidated as we expected into a single lawsuit. Trial is scheduled to begin February 2, 2021. Discovery is now underway. Teva is also challenging the validity of one of our patents, the 214 patent, in a proceeding before the PTAB known as a post-grant review, PGR for short. Oral argument will take place in September. There will be a decision this November. The losing party in a PGR may appeal to the Federal Circuit Court of Appeals during which time those portions of the PTAB decision that are under appeal will have no effect. Appeals to the Federal Circuit usually take about one year to resolve. The soonest we expect definitive resolution of the PGR is the fourth quarter of 2021. In addition to TEVA, Sun Pharmaceuticals is seeking to market generic coralline. Our patent infringement suit against Sun has stayed FDA approval of Sun's proposed product until the earlier of December 8th, 2021 and the decision by the district court that the patents we have asserted against Sun are invalid, unenforceable or not infringed. Despite obvious overlap in subject matter and legal issues, our dispute with Sun is separate from our litigation against Teva and is following its own timeline. A Markman hearing in the Sun case is set for November of this year. A trial date has not been set. The impact of the COVID-19 pandemic on the timing of these disputes is impossible to know with certainty. The PTAB has said it does not expect delays, which is not surprising. The Patent Office conducts much of its work, including PTAB hearings, remotely. We expect to receive a ruling in our PGR in mid-November, as originally scheduled. Predicting the ultimate timing of our district court litigation is more difficult. The court hearing our Teva and Sun lawsuits has not delayed our February trial with Teva or our November Markman hearing in the Sun case, and we are preparing on the assumption there will be no delays. That being said, When pandemic-related restrictions ease, all courts will face a backlog of matters that take precedence over civil suits such as ours. Criminal cases, for example. I would not be surprised if our litigation timelines are extended. But of course, that is for the court to decide. And we will be ready whether there are delays or not. We are confident in our intellectual property and look forward to putting our case before a judge. I'll now turn the call over to Dr. Joseph Belanoff, our Chief Executive Officer. Joe?

Thank you, Charlie. Corset had an excellent commercial quarter. Despite obstacles posed by stay-at-home orders and other measures to protect public health, our clinical specialists, medical science liaisons, patient advocates, operations team, and specialty pharmacy made sure patients taking Coraline got their medication. COVID-19 poses an especially serious risk to patients with Cushing syndrome. Excess cortisol activity suppresses the immune system. Patients with Cushing syndrome are four to five times more likely to suffer severe infections, putting them at exceptionally high risk for COVID-19. They are also more likely to experience blood clots, another leading cause of morbidity and mortality in patients with COVID-19. While it is always important that patients with Cushing syndrome be diagnosed and optimally treated, it is especially important now. It is hard to predict how the pandemic will affect our commercial business for the rest of the year. The risks COVID-19 poses to patients with Cushing syndrome are likely to increase demand for coralline. At the same time, restrictions imposed by state and local governments, hospitals, and individual medical practices make it very difficult to work with physicians in person. Some of the imaging centers and laboratories physicians use when diagnosing patients with Cushing syndrome and titrating to an optimum dose of Quorum are closed. Many patients are hesitant to leave their homes even to visit the doctor. These factors are likely to reduce the rate at which new patients are introduced to Quorum and make it more difficult for physicians to monitor patients following dose titration. However, as physicians and patients adapt to a world in which COVID-19 is endemic, as they are beginning to do, the impact of these factors may diminish. We reaffirm our 2020 revenue guidance of $355 to $375 million based on our strong first quarter results and our best estimate of how the factors that determine our revenue, pandemic-related and otherwise, will evolve over the coming months. As many of you know, we are conducting a Phase 3 trial of relucorlin, a plant successor to corlin, as a treatment for patients with Cushing syndrome. The trial is known as GRACE. Our goal for GRACE is to confirm the positive efficacy and safety findings of relucorlin's Phase 2 trial, in which patients exhibited meaningful improvements in glucose control and hypertension, two of Cushing syndrome's most pernicious manifestations, as well as an important secondary endpoint, without instances of Coraline's significant off-target effects. Our poster presentation of Rela Coraline's Phase 2 results can be found at the Investors slash Past Events tab of our website. We believe Rela Coraline will constitute a major medical and commercial advance. While its Phase 2 efficacy data are comparable to Coraline's at the same time points in Coraline's pivotal trial, Rela Coraline promises to offer significant safety benefits. Quorum's affinity for the glucocorticoid receptor, GR for short, makes it a highly effective treatment for patients with Cushing syndrome. Unfortunately, Quorum is not selected for the GR. It also binds to the progesterone receptor, which causes endometrial thickening and vaginal bleeding in many women, regardless of age, and requires Quorum's label to carry a black box warning, the most serious medication warning required by the FDA for termination of pregnancy. By different mechanism, Quorum causes hypokalemia, low potassium, a manageable but potentially serious side effect that was experienced by 44% of patients in Quorum's pivotal trial, and it's a leading cause of discontinuation in patients taking the medication. Unlike Quorum, Reliquorum is a selective GR modulator with no affinity for the progesterone receptor. It does not cause endometrial thickening or vaginal bleeding. It is not the abortion pill. In addition, we saw no instances of drug-induced hypokalemia in Rella Coraline's Phase 1 or Phase 2 studies. These are side effects physicians and patients would strongly prefer to avoid. The COVID-19 pandemic has slowed the pace of enrollment in grace and delayed the opening of the last few of our Plan 65 clinical trial sites. As public health restrictions ease, we expect our remaining sites to open and full enrollment to resume this fall. We now plan to submit our NDA in the second quarter of 2022. This quarter, we will start a Phase III study of reliquaryland in patients whose Cushing syndrome is caused by an adrenal adenoma or adrenal hyperplasia. The study is called GRADIENT, G-R-A-D-I-E-N-T. It will be the first randomized double-blind placebo-controlled trial in patients with this etiology of Cushing syndrome. Thank you for joining us. Our goal is simply to help inform and improve the treatment of patients with this type of Cushing syndrome. Our poster presentation of Gradients Design is available at the Research and Pipeline slash Publications tab of our website. An abstract is also available in the April-May supplemental issue of the Journal of the Endocrine Society. I will now turn to our oncology program, which is examining three potential mechanisms by which cortisol modulation may benefit patients. Cortisol activity suppresses apoptosis, the program cell death chemotherapy is meant to cause, and tumors that express the GR. We are testing whether adding our selected cortisol modulator reliquaryl into chemotherapy will blunt cortisol's anti-apoptotic effect, thereby allowing chemotherapy to achieve its full cancer-killing potential. Our goal is to confirm the striking data we presented in ASCO last year. were reported results from our open-label trial of relacorlin plus napaclitaxel, Celgene's chemotherapy drug Abraxin. In our study, 7 of 25 patients with metastatic pancreatic cancer and 5 of 11 patients with advanced ovarian cancer achieved durable disease control, meaning their tumors either shrank or ceased growing for 16 weeks or longer. The duration of benefit in some patients was eye-catching. Two patients with metastatic pancreatic cancer exhibited tumor shrinkage for more than 50 weeks. One patient with ovarian cancer exhibited tumor shrinkage for 65 weeks. The tumors in all of these patients had progressed during multiple lines of prior therapy, including therapy with taxanes. Our poster presentation of these results is available at the Investors slash Past Events tab of our website. Last year we began a controlled phase 2 trial of relucorilone plus napaclitaxel in patients with metastatic ovarian cancer with a planned enrollment of 180 patients at 25 sites in the United States and Europe. The primary endpoint is progression-free survival with secondary endpoints including overall survival and duration of benefit. Despite challenges arising from the COVID-19 pandemic, we continue to expect results of this study during the first half of next year. This quarter, we will start a Phase III trial of reliquarolent in combination with napaclitaxel in patients with metastatic pancreatic cancer, a disease with a dire prognosis. This trial will be called RELIANT, R-E-L-I-A-N-T. RELIANT will be an open-label trial in which 80 patients receive reliquarolent plus napaclitaxel with the primary endpoint being the objective response rate assessed by resist criteria. We plan to perform an interim analysis on data from the first 40 patients. We believe sufficiently positive results could support accelerated approval. Reliant will be conducted at 30 sites in the United States. Cortisol modulation may also benefit patients by bolstering their immune response. Cortisol is the body's natural immunosuppressant. This effect is often beneficial. It helps to prevent, for example, autoimmune disorders such as rheumatoid arthritis. In patients with cancer, however, cortisol activity suppresses the ability of the immune system to recognize and destroy tumor cells. It also blunts the cancer-killing attributes of immunotherapeutic agents such as checkpoint inhibitors. Next quarter, we are starting an open-labeled Phase 1b trial of Reliquorone plus the PD-1 checkpoint inhibitor Pembrolizumab, Merck's drug Keytruda, and 20 patients with metastatic or unresectable adrenal cortical cancer. Because their tumors produce cortisol, these patients also have Cushing syndrome, which cortisol modulation can treat. Our trial will examine whether relacorlin can, in addition to treating Cushing syndrome in these patients, specifically help immunotherapy achieve its maximum effect. by reducing the immunosuppressive effects of excess cortisol activity. Finally, cortisol modulation may benefit patients with castration-resistant prostate cancer. Androgen stimulates the growth of prostate tumors, which is why androgen receptor antagonism with medications such as enzalutamide, Pfizer's drug Xtandi, are standard therapy. More recently, researchers at the University of Chicago and Sloan Kettering have shown that when colonies of prostate cancer cells are exposed to enzalutamide, growth is stimulated by cortisol activity at the GR. Our hypothesis is that a regimen combining a cortisol modulator with an androgen receptor antagonist will block this tumor escape route. Our selective cortisol modulator, hexachloroids, is potent in animal models of castration-resistant prostate cancer. By the end of this year, we expect to select the optimum dose of hexachloroquine in combination with enzalutamide to bring forward in a controlled Phase II trial. In addition, a dose-finding trial of relachloroquine plus enzalutamide is being conducted by investigators at the University of Chicago. I will conclude with an update of our program in metabolic disorders. As many of you know, we are developing our selective cortisol modulator, Mirachloroquine, for the treatment of antipsychotic-induced weight gain and non-alcoholic steatohepatitis, or NASH. Millions of patients rely on medications such as olanzapine to treat diseases such as schizophrenia and bipolar disorder. Unfortunately, these drugs cause serious metabolic abnormalities, including rapid weight gain and lipid disorders in nearly everyone who takes them. Patients are forced to make a terrible bargain treat one dangerous disease but at the cost of acquiring another. Heart disease and stroke, not suicide, are the leading causes of death in patients taking antipsychotic medications. We conducted two double-blind placebo-controlled trials in healthy subjects in which mifepristone reduced weight gain caused by taking olanzapine or risperidone. Our results were published in the journal's Advances in Therapy and Obesity. Unfortunately, we could not advance mifepristone further for this indication because mifepristine's quality as the abortive fashion disqualify it as a treatment for common disorders. Miracorlin can be advanced because it is a selective cortisol modulator with no affinity for the PR. It is not the abortion pill, and if approved, could be widely distributed. Miracorlin is more effective than mifepristone in animal models of antipsychotic-induced weight gain. and now our completed double-blind placebo-controlled Phase 1b study in healthy human subjects has demonstrated that miracoralin is active in reducing antipsychotic-induced weight gain in humans. In the first part of our Phase 1b trial, 66 healthy subjects received olanzapine and either 600 milligrams of miracoralin or placebo for 14 days. Participants who received miracoralin gained less weight than those who received placebo. In addition, liver enzymes, markers of liver damage, increase less in patients who receive miracoilin, suggesting that miracoilin has protective effects in the liver. In the second part of our trial, 30 healthy subjects received olanzapine and either miracoilin at 900 milligrams or placebo for 14 days. The results confirm our findings from the first part of the study. Patients receiving miracoilin gained less weight, had lower triglycerides, and had less sharply elevated liver enzymes than subjects who received placebo. No side effects, other than those commonly seen with olanzapine, were seen with either dose of neurocorrelant. In fact, we plan to investigate considerably higher levels of neurocorrelant exposures in future studies. The full results of our Phase 1B study will be published later this year. Our double-blind, placebo-controlled Phase 2 trial of neurocorrelant called Gratitude to reverse recent antipsychotic-induced weight gain is in progress. In the study, 100 patients with schizophrenia will continue to receive their established dose of antipsychotic medication and either 600 milligrams of miracle oil or placebo for 12 weeks. Gratitude will be conducted at approximately 20 centers across the United States. While the COVID-19 pandemic has effectively suspended new enrollment in this trial, we are confident enrollment will resume Public Health Restrictions Ease. There has been no delay in our plans to start by year-end a placebo-controlled, double-blind Phase II trial in patients with long-standing antipsychotic-induced weight gain. In this trial, we plan to test a formulation of Miracorland that we believe will achieve significantly higher exposures of Miracorland than will be reached in the Gratitude trial, which again is examining the reversal of recent antipsychotic-induced weight gain. Finally, in the first quarter of next year, we plan to start a double-blind, placebo-controlled, Phase II trial of Miracorland in patients with NASH, a serious liver disorder that afflicts millions of patients. In animal models, Miracorland prevents and reverses both fatty liver and liver fibrosis, which are precursors of NASH. We also intend to test our new, more potent formulation of Miracorland in this study. In conclusion, Corset had an outstanding first quarter of revenue and profits. We increased our balance of cash and investments to $349 million. We have no debt. The COVID-19 pandemic has slowed enrollment and site activation in grace. Our pivotal phase three trial of relic hormone to treat patients with Cushing syndrome. We now plan to file our NDA in the second quarter of 2022, two quarters later than we had originally planned. We now expect to start gradient our Phase 3 trial of relacoralin in patients with Adrenal Cushing Syndrome this quarter. We continue to expect results of our controlled Phase 2 trial of relacoralin plus nabpaclitaxel to treat patients with metastatic ovarian cancer in the first half of next year. This quarter we plan to start a Phase 3 trial called Reliant of relacoralin plus nabpaclitaxel in patients with metastatic pancreatic cancer. We believe sufficiently positive results and reliant will support accelerated approval. Next quarter, we plan to start an open-label Phase 1B study of reliquarylin combined with PD-1 check inhibitor pembrolizumab to treat patients with metastatic or unresectable adrenal cancer. Finally, by the end of this year, we expect to select a dose suitable for advancement of exaquarylin in combination with enzalutamide to treat patients with castration-resistant prostate cancer. The second part of our Phase 1B trial of Miracorlin to reduce weight gain caused by olanzapine has confirmed our earlier positive results. Our double-blind, placebo-controlled Phase 2 trial of Miracorlin to reduce recent antipsychotic-induced weight gain is open. We expect enrollment to resume as public health restrictions loosen. We plan to start a Phase 2 trial of Miracorlin in patients with long-standing antipsychotic-induced weight gain by year-end, as originally planned. using an improved formulation of Miraclurelent. We now plan to start our Phase II trial of Miraclurelent in patients with NASH in the first quarter of next year. I'll stop here for questions.