Corcept Therapeutics Incorporated (NASDAQ:CORT) Q2 2023 Earnings Call Transcript

Corcept Therapeutics Incorporated (NASDAQ:CORT) Q2 2023 Earnings Call Transcript August 2, 2023

Corcept Therapeutics Incorporated beats earnings expectations. Reported EPS is $0.24, expectations were $0.15.

Operator: Good day. And welcome to the Corcept Therapeutics Conference Call. [Operator Instructions] Please be advised that today’s conference is being recorded. I would now like to hand the conference over to your speaker today, Atabak Mokari. CFO. Please go ahead.

Atabak Mokari: Hello, everyone. Good afternoon and thank you for joining us. I’m Atabak Mokari, Corcept’s Chief Financial Officer. Today, we issued a press release announcing our financial results for the second quarter and providing a corporate update. A copy is available at corcept.com. Our complete financial 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 at the Investors Past Events tab of our website. Statements during this call, other than statements of historical fact are forward-looking statements based on our plans and expectations that are subject to risks and uncertainties which may cause actual results to differ materially from those such statements expressed or implied.

These forward-looking statements are described in today’s press release and the risks and uncertainties that may affect them are described in the press release and in our annual report on Form 10-K and our quarterly reports on Form 10-Q. Please refer to those documents for additional information. We disclaim any intention or duty to update forward-looking statements. Our revenue in the second quarter of 2023 was $117.7 million, an increase of 14% compared to the second quarter of last year. To reflect that growth, we are raising our 2023 revenue guidance again to a range of $455 million to $470 million, up from $435 million to $455 million. Net income was $27.5 million or $0.25 per share in the second quarter compared to $27.4 million or $0.24 per share in the same period last year.

Our cash and investments of $363.3 million at June 30th reflects the purchase 6.6 million Corcept share for $145.4 million during the quarter. I will now turn the call over to Charlie Robb, our Chief Business Officer, to provide a legal update. Charlie?

Charlie Robb: Thanks Atabak. In March 2018, we sued Teva Pharmaceuticals in Federal District Court to prevent it marketing a generic version of Korlym in violation of our patents. Trial is set to begin next month on the 27th of September. As a reminder, Teva cannot dispute the validity of two patents we are asserting against it. She went for patent and the 800 patent, which concern the safe coadministration of Korlym, the commonly prescribed class of drugs known as strong CYP3A inhibitors, issues determinative of these patents validity were decided in our favor, until the lost of the post grant review challenge initiated padlocks. Teva’s only defense with respect to these two patents that his proposed products would not infringe, position we believe has no legal or factual support.

214 patents are two of the four patents we are asserting against Teva. As I said last quarter, and then all of the calls we’ve held since this litigation began, we are supremely confident in the strength of our case. We are happy that our trial date is approaching. We look forward to our day in court. Why? Because the law and the facts are on our side. I’ll now turn the call over to Dr. Joseph Belanoff, our Chief Executive Officer. Joe?

Joseph Belanoff: Thank you, Charlie. The strong results of our commercial business in the second quarter reflect the early return on our substantial investment to stimulate physicians to better recognize to treat hypercortisolism. In the second quarter, we saw a continued increase in the number of patients receiving Korlym in a number of physicians prescribing the medication. The business translation of more panic patients benefiting from Korlym treatment is a new record high in our quarterly revenue, we expect our growth to continue. Korlym is an excellent treatment for patients with Cushing’s syndrome, and there are many eligible patients who have yet to receive it. Leading endocrinologist increasingly believed that there are considerably more patients with Cushing’s Syndrome than was once assumed.

Results of our ongoing CATALYST study will likely provide further evidence to bolster this belief and equally likely believe physicians to begin to identify and provide effective treatment for a large group of patients with hypercortisolism, whose disease currently goes undiagnosed. We are confident in the growth potential of our Cushing’s Syndrome business and are raising our 2023 revenue guidance range again, this time to $455 million to $470 million. We’re also very excited by the potential of our clinical development programs. Since inception, our research and development efforts have built on the hypothesis that cortisol modulation can be a powerful therapeutic mechanism in many serious disorders. Our proprietary compounds modulate cortisol effects by binding to the glucocorticoid receptor or GR.

The receptor which is activated when cortisol levels are high. They do not bind to the progesterone receptor, and don’t cause some of Korlym’s, our approved products and the serious off-target effects. Interestingly, while our compounds modulate cortisol activity, without modulating progesterone activity, they are not identical. Some cross the blood brain barrier others do not. Some perform best in models of solid tumors. Others are more potent in models of metabolic disease. Some appear to be tissue specific, others have more global effects. These diverse qualities allow us to study a wide variety of disorders. Currently, we are conducting programs with three of our proprietary selected cortisol modulators, relacorilant, dazucorilant and miricorilant, in ovarian, adrenal and prostate cancer, ALS, NASH and of course, Cushing’s syndrome.

We have additional compounds in clinical and preclinical development. In the next 12 months we expect data from our GRACE, GRADIENT and CATALYST studies, submission of an NDA for relacorilant in Cushing’s syndrome, completion of enrollment of our ROSELLA and DAZALS studies and initiation of Phase 2b trial of relacorilant in patients with NASH. This is a very exciting time for Corcept. We are evaluating relacorilant for the treatment of hypercortisolism in two Phase 3 trials, GRACE and GRADIENT. Relacorilant is a selective cortisol modulator. Like Korlym, it achieves its effect by competing with cortisol at the glucocorticoid receptor unlike, Korlym it does not it does not bind to the progesterone receptor PR for short, and so does not cause PR related side effects, including termination of pregnancy, endometrial thickening and vaginal bleeding, by different mechanism relacorilant also does not cause hypokalemia, low potassium, a serious side effects experienced by 44% of patients of patients in Korlym’s pivotal trial.

Korlym induced hypokalemia is a leading cause of Korlym discontinuation. Relacorilant’s Phase 2 efficacy and safety data were compelling. Patients experience meaningful improvements in hypertension and glucose control, as well as in a variety of other signs and symptoms of Cushing’s Syndrome. There were no relacorilant induced instances of endometrial thickening or vaginal bleeding, and no drug induced hypokalemia. The trial results were published in Frontiers in Endocrinology in July 2021. With enrollment in GRACE complete, we are focused on finishing the trial and preparing our NDA, which we plan to submit in the second quarter of 2024. Relacorilant has tremendous promise as a treatment for patients with all etiologies of endogenous Cushing’s syndrome.

And we are eager to make it available. Our second Phase 3 trial in hypercortisolism of GRADIENT is studying relacorilant effects to patients whose Cushing’s syndrome is caused by an adrenal adenoma or adrenal hyperplasia. Patients with this etiology of Cushing’s Syndrome often experience less rapid decline, but their health outcomes are poor, including a higher risk of premature death. While we do not expect our NDA and Cushing’s Syndrome to depend on data from GRADIENT, we do expect the study to produce valuable data about an etiology of Cushing’s syndrome that affects many patients whose hypercortisolism frequently goes undiagnosed and untreated. I’m pleased to announce that our CATALYST study is progressing ahead of schedule. CATALYST is a 1,000 patient Phae 4 trial examining the prevalence of hypercortisolism in patients with typical to control type 2 diabetes.

Patients diagnosed with hypercortisolism in a CATALYST study, we choose to enter a randomized, double blind placebo controlled study of Korlym, many independent studies conducted over the last 15 years have found that the prevalence of hypercortisolism in patients with type 2 diabetes is substantially higher than in the general population. The most prominent diabetologist in the United States help us design and are participating in CATALYST, which will be the largest study of its time. We have received very positive feedback from leading endocrinologist regarding this study, and expect to complete enrollment in the fourth quarter a bit ahead of our previous estimate. Our oncology program is testing three anti-cancer mechanisms first postulated by investigators at the University of Chicago and later confirmed by other prominent researchers.

One mechanism is increasing apoptosis, the program cell death that chemotherapy is meant to induce in solid tumors. Cortisol works against the beneficial effects of chemotherapy by suppressing apoptosis. And our successful control Phase 2 trial in women with platinum resistant ovarian cancer. The addition of our selective cortisol modulator relacorilant enhance the effect of chemotherapy, likely by blunting cortisol’s anti-apoptotic effect. Relacorilant provided meaningful benefit to many of the women in our study. While these women’s disease have progressed on to more previous lines of treatment, including previous Taxanes, relacorilant appear to re-sensitize the disease to chemo therapies beneficial effects to some women, those who received relacorilant intermittently the day before the day of and the day after they receive nab-paclitaxel exhibit a statistically significant improvement in progression free survival and duration of response compared to the group who received nab-paclitaxel monotherapy.

Women in the intermittent and relacorilant group also live longer than does the comparator arm with a p-value that approach statistical significance. Our analysis to date indicates the 29% of the patients who took intermittent relacorilant were alive two years after study start versus only 14% who took nab-paclitaxel alone. Just as important, the women who receive relacorilant plus nab-paclitaxel experienced no additional side effect burden compared to those who receive nab-paclitaxel alone. The results from this study were recently published in the prestigious Journal of Clinical Oncology. Results have also been featured in podium presentations at the 2021 and 2022 European Society for Medical Oncology, ESMO meeting and at the 2022 American Society of Clinical Oncology, ASCO Annual Meeting.

ROSELLA, our confirmatory pivotal Phase 3 trial in platinum resistant ovarian cancer is enrolling patients. ROSELLA designed closely tracks a Phase 2 study and its goal was simply to replicate a positive Phase 2 results in a larger group. Plan enrollments of 360 women randomized one to one to receive the relacorilant plus nab-paclitaxel or nab-paclitaxel alone. The primary endpoint is progression free survival with overall survival a key secondary endpoint. We are conducting this study in collaboration with leading clinicians from the gynecological oncology group in the United States and the European Network of Gynecological Oncology Trials Group in Europe. We are on track to complete enrollment by the end of the year. Leading gynecological oncologists have told us that in their view, relacorilant’s potential benefit, improved progression free and overall survival without increased side effect burden would constitute an important medical advance and that relacorilant plus nab-paclitaxel has the potential to become a new standard of care in women with platinum resistant ovarian cancer.

Second mechanism by which cortisol modulation improve useful is by blocking an important tumor growth pathway. Cortisol stimulation is a major reason why patients with prostate cancer treated with a widely prescribed androgen receptor antagonist Enzalutamide eventually experienced resurgent disease, deprived of androgen stimulation, their tumor switched to cortisol activity to stimulate growth. Our hypothesis is that adding a cortisol modulator to androgen deprivation therapy and close this tumor escape route. Our collaborators at the University of Chicago plan to begin a randomized placebo controlled Phase 2 trial of relacorilant plus Enzalutamide in patients with prostate cancer before these patients have had an initial prostatectomy this quarter.

Third therapeutic mechanism seeks to treat tumors by enhancing the body’s immune response. Cortisol suppresses the immune system, which may blunt the effectiveness of cancer therapies intended to stimulate the immune system. Our hypothesis is that adding a cortisol modulator to immunotherapies such as checkpoint inhibitors may enhance the effectiveness of these therapies. We are conducting a Phase 1b trial of relacorilant plus the PD1 checkpoint inhibitor pembrolizumab in patients with advanced adrenal cancer, these tumors produce excess cortisol. pembrolizumab is rarely effective as monotherapy in treating this form of adrenal cancer. ALS commonly known as Lou Gehrig’s Disease is a devastating illness with an urgent need for better treatment.

DAZALS , our 198 patient randomized double blind placebo controlled Phase 2 trial of dazucorilant in patients with ALS is briskly enrolling patients. dazucorilant is a selective cortisol modulator that has shown great promise in animal models of ALS, improving motor performance and reducing neural inflammation and muscular atrophy. We are conducting this important study in collaboration with TRICALS, a leading ALS academic consortium in Europe. We recently added clinical trials right in the United States, and are on track to complete enrollment in DAZALS by early next year. Finally, I’ll turn to our program in NASH, a serious liver disorder that afflicts millions of patients in the United States. Miricorilant an oral medication continues to demonstrate great promise as a treatment for NASH.

In our prior NASH studies, patients who received 600 milligrams or 900 milligrams of miricorilant daily exhibited large rapid reductions in liver fat, but also substantial albeit transient elevations of the liver enzymes, ALP and ASD. The improvements in liver fat in these patients was greater and occurred much more rapidly than we had expected, and is rarely seen over any period of treatment. Our ongoing Phase 1b dose timing study, which evaluated a range of doses and dosing schedules of miricorilant found that patients who receive just 100 milligrams of miricorilant orally twice a week for 12 weeks experience an approximately 30% reduction in liver fat and showed improvements in liver enzymes and markers of liver disease. These patients also experienced improvements in key metabolic to lipid measures such as Homa IR, serum triglycerides, and LDL.

Importantly, miricorilant was very well tolerated. We plan to submit these results for presentation at a scientific conference and will initiate a Phase 2b trial in the fourth quarter. In conclusion, we are extremely optimistic about the future of Corcept, our Cushing’s Syndrome business has tremendous growth potential and generates substantial profits even as we invest in R&D advancing development programs. We are again raising our revenue guidance for this year and anticipate growth for years to come. Our CATALYST study holds great promise, as the data generated will help physicians to improve the screening and treatment of patients with difficult to control diabetes is caused by hypercortisolism, a population whose Cushing’ Syndrome frequently goes undiagnosed.

For these patients, hypercortisolism is their disease and diabetes are a symptom of their hypercortisolism. Our development programs are generating increasing evidence and validates our long held belief the cortisol modulation has the potential to treat a wide range of diseases. Reducing cortisol activity is a straightforward and effective way to treat Cushing’s Syndrome and can offer substantial benefits to patients with other serious disorders. Ovarian cancer, ALS and NASH are current examples, but there will be others. In addition to relacorilant, dazucorilant and miricorilant, we have many other proprietary selective cortisol modulators in our portfolio with potentially very different clinical attributes. In the next 12 months, we will see data from our GRACE, GRADIENT and CATALYST studies in Cushing’s Syndrome.

We will submit relacorilant NDA in Cushing’s Syndrome, and we’ll complete enrollment and large controlled studies of platinum resistant ovarian cancer and ALS. We will also begin a Phase IIb study in patients with NASH. As I said, this is an exciting time for Corcept. I thank our dedicated creative employees and loyal investors for making that possible. I’ll stop here for questions.

Q&A Session

Operator: [Operator Instructions] Our first question comes from the line of Matt Kaplan with Ladenburg.

Matthew Kaplan: Hi. Good afternoon. And thank for taking the question. And congrats on the strong quarter. Can you give us some sense in terms of what drove the revenues in the second quarter and your confidence in increasing your guidance for this year as well.

Joseph Belanoff: Sure, Matt. I’m just going to reintroduce to the group, Sean Maduck, who is the President of our endocrinology division and runs our Cushing’s syndrome business.

Sean Maduck: Hi, Matt, thanks for the question, and I’ll just start by saying we’re very pleased with the results. Your question was what drove it. It was driven by improved access and improved field execution. We’re starting to see some early returns from our investments. Many of our investments have been on expanding the field and working to get our field more productive and efficient. So through that process this quarter, we’ve added both new patients and new prescribers, and we have more patients taking Korlym than ever before. Disease awareness continues to increase. And really, we’re more confident than ever about the potential size of the Cushing’s Syndrome market. For the remainder of the year. I mean, at this point, our belief is just a fraction of hypercortisolism patients have been identified and treated. And over the coming months and quarters, there’s going to be many more.

Matthew Kaplan: Got it. That’s helpful. And just looking at your pipeline with GRACE ingredient, GRACE completing enrollment and GRADIENT to complete in the near term. Can you help us set expectations in terms of what we’re — what to expect for GRACE and GRADIENT as they read out perhaps next year.

Joseph Belanoff: Yes. Let me introduce you again to Bill Guyer who runs all of our development here, Chief Development Officer. Bill, comment.

William Guyer : Great. Thank you, Matt, for that question. So as we have now completed enrollment for the GRACE trial, the investigators, and we are very excited because of that. And now we’re in the plans of submitting that NDA. And we’ve actually been working on that NDA since last year. And as we collaboratively work with FDA, we’re going to be working on developing and submitting all of our studies. So the NDA will include many different studies. It will include the full Phase 2 data from a safety and efficacy perspective, the GRACE study from a safety and efficacy perspective, the GRADIENT trial from an integrated safety perspective, as well as our long-term extension study, which has been ongoing for over five years, and we have patients on relacorilant for doing well over five years.

And then we’re also going to include many other new recently presented and published data that I think we’re going to be excited to include in the NDA. One of those being we just completed a thorough QT study, we evaluated the Heart QT interval and looked at relacorilant and it saw no effects on the QT interval. And that would make this the only drug in Cushing’s Syndrome that does not affect QT interval. So that’s exciting news as we have completed that study. We’ve also seen published preclinical research citing how relacorilant can uniquely shrink to [inaudible] tumors in tissue cultures and with those tumors, we’ve also seen two published case reports highlighting similar clinical benefit of relacorilant in patients. This is a differentiating factor because nepepristim was also used in those preclinical studies and saw no change in pituitary tumors.

And then finally, we just presented new data from our Phase 2 trial looking at coagulopathy parameters which was important because Cushion’s Syndrome patients are high risk for developing hypercoagulopathy events and relacorilant showed no effects on those coagulopathy patterns. And that would be, again, the only drug in the Cushing syndrome space to have no effect on hypercoagulopathy patterns. All of this data makes me confident in the benefit relacorilant can bring to patients and confident as we proceed towards our NDA in the next coming year.

Matthew Kaplan: Great. And just a quick follow-up on that. Where are you with the manufacturing and is manufacturing at all a wait limiting step?

Joseph Belanoff: Manufacturing is not a rate-limiting step, Matt. And we’ll certainly be ready to have commercial supply when and if our NDA is approved.

Matthew Kaplan: And one last question for me, and then I’ll jump back in the queue. The CATALYST study moving ahead of plans. Do you have a sense in terms of — based on the design of the study, what percentage of patients that you’re screening have hypercortisolism over in this difficult to treat type 2 diabetes patients?

Joseph Belanoff: Yes, Matt. I understand the question. I’m going to hand you back to Bill.

William Guyer : So CATALYST is building on a tremendous amount of research already generated with multiple different studies, and I can cite all the studies and send you all the references. Many of those studies are in hundreds of patients. And in those independent studies over the past 15 to 20 years, we found that hypercortisolism is higher than the normal general population. And I would guesstimate it to be around when you look at the average for those studies, it’s about 10% to 20% for those patients who have difficulty to control diabetes. And with CATALYST, this would be then that landmark study because it is the largest study of its kind, evaluating 1,000 patients to evaluate those with type 2 diabetes who are difficult to control.

And we’re doing a simple test of just on DST. All of our investigators are part of this are highly motivated by this, and that’s why screening is ahead of schedule. And thus far in the CATALYST study, even though it’s early, I would say that the results so far are mirroring what we’ve seen in past published studies.

Operator: Our next question comes from the line of Edward with Canaccord.

Edward Nash: Hi, thanks for take the call. Yes, congrats guys on such a strong quarter, really great. You have to ask you, and I guess this goes in the same vein of it being a really strong quarter and just the additional input in the sales efforts really kind of is what you attribute that to. But I see that the European Society of Endocrinology has updated their practice guidelines on the treatment of adrenal adenoma and I just wanted to find out what the implications are there? I think it’s been a while since we’ve been updated. So just want to kind of better understand what the implications could be there for usage of Korlym.

Joseph Belanoff: Good Edward. Thank you for the question, and I’m going to direct it to Sean again.

Sean Maduck: Yes. Ed, thanks for the question. And just adding on Bill just spoke the study after study, there’s been mounting evidence over time that this illness is more prevalent. And the European guidelines that were just updated are just another example of the evolution of the mindset around hypercortisol. Endocrinologists recognize that hypercortisolism is more prevalent than one thought. And what these guidelines do is that we encourage physicians to look harder for the disease. Which is great. The guidelines also highlight the use of the relatively simple dexamethasone suppression test, or the DST as a testing standard, which going to support increased screening. So these guidelines will influence and increase both screening and diagnosis of hypercortisolism patients.

Operator: Our next question comes from the line of David Amsellem with Piper Sandler.

David Amsellem: Thanks. So just have a few. First, I wanted to ask a couple on miricorilant and NASH. I know you’re going to have data on medical meetings. But just thinking about the Phase IIb. Can you just talk about the contours of the design of that trial? Is it — I’m assuming we’re going to have liver biopsies in this trial? And is this something where you’re thinking about is more of a Phase 2/3 or is this something where we should think about it as you’re still going to have to do a full Phase 3 program beyond this Phase IIb. That’s number one. Number 2 is, as you think about miricorilant, strategically, is this something that you’re going to look to partner down the road? Is this something that you’re going to look to keep and commercialize? And where does it fit in the broader business, particularly given the comments that other cortisol modulators that you’re looking at that you haven’t disclosed?

Joseph Belanoff: Yes. Thanks, David. And then 2 questions, I think I understand. Bill, would you first describe the Phase IIb miricorilant study and then I’ll describe — I’ll discuss the business possibilities.

William Guyer : Absolutely. Thank you for that question. So as we progress towards our Phase IIb program, let me back up a little bit. One, we just completed a great advisory board at the EASL conference, which is the European conference for the study of liver disease. And we met with the top hepatologists in the world who have done research for every molecule in the NASH base for the past decades, and I’ve known them for many decades as well. And as we reviewed all the Phase 2a data from our original study and all the Phase 2b or Phase 1b data, they were really impressed with that. And they helped guide us and designing our Phase 2b trial. And so that was really encouraging as we move forward. And so that Phase IIb trial right now as our study is a BC confirmed NASH study in patients with NASH.

This study will be a double-blind, placebo-controlled trial, evaluating 150 patients randomized to miricorilant 100 milligrams twice weekly or placebo for 48 weeks. This is intended to be a Phase IIb study. And based upon those results, we will then progress and design a Phase 3 trial.

Joseph Belanoff: And David, the second question is an interesting one. And I just — for a variety of reasons, particularly for those who followed Corcept for a long time. I mean, as you know, most of the things starting with Cushing syndrome we’ve worked on have been orphan diseases, niche markets, very obvious clinical need, but to a relatively small group of patients NASH is, of course, a different story. The number of people in the United States with fatty liver disease is very large and a sizable percentage of them have NASH and progresses to worse things than that. So it’s a big market. I don’t know if sort of the older term primary care market is the right way to describe it, but there’s certainly a market with many, many patients in it.

Now good question and one that we thought about a lot. Is this something that we can do on our own as we have with the other diseases we’ve looked at? Or is this just a disease space where we will need to partner. I don’t really know the answer to that at this point in time. But what I will tell you is that we are not in need of anyone else’s money to support the development plan. So if we decide the commercialization is better with a partner, we’ll go in that direction, but I think we’re really in the lucky space because of our profitable business and our long-term product business, that we can take this as far as we want and should we partner, we’ll be in a place where it’s clearly advantageous for us to do so. And I’ll end it with a simple answer, that decision has not yet been made.

David Amsellem: Okay. That’s helpful. If I might sneak in an additional question. Just on CATALYST. As you get learnings from the study and particularly the answers that you’re looking for, which is the Cushing’s syndrome and hypercortisolism is more prevalent and raising awareness among diabetologists. Do you think about calling on a sizable group of diabetologists in your rollout and broader commercialization of relacorilant, in other words, is this going to be a bigger, splashier more expensive wider launch into a wider group of physicians.

Joseph Belanoff: Sean?

Sean Maduck: Yes. No, thank you for the question. And look, we’re in the process of really working through that now to understand what the most effective way it will be for us to launch relacorilant. We do recognize that these patients are in more than just endocrinology practices. Diabetologist in general, are endocrinologists, but there’s cardiologists. Showing up in some primary care offices sort of throughout the country. So we are right now are working on trying to figure out scalable ways that we can get this message to physicians that they can be educated for.

Joseph Belanoff: Yes. And then — but just — I appreciate the question, David, particularly because we have been thinking about that. I think at some point, maybe a decade ago, we thought that the patients — the patients with Cushing’s syndrome were likely to be treated by really a very, very small number of endocrinologists. We do not think that is true anymore. We think it’s — they are distributed to a much larger group and making sure that these patients get to optimum treatment is really — that’s our ethos. That’s what we really want to get to. So how it translates to a practical matter. — is absolutely on our mind.

Operator: Our next question comes from the line of Roanna Ruiz with Leerink.

Roanna Ruiz: Hi. Good afternoon, everyone. So a couple for, maybe on tagging on a question about your revenue guidance for a second. I was curious, what are some of the pushes and pulls that could get Korlym revenues closer to the higher end or the lower end of this range in your view?

Joseph Belanoff: Sean, please take that?

Sean Maduck: Yes. Thank you for the question. Look, our guidance, it’s pretty simple, is driven by the number of patients on medicine. We have more patients taking Korlym ever before, and we expect that there will be more in the future. We have a number of initiatives underway, and we’re expecting them to impact the second half of the year. So the more patients that are prescribed Korlym, the higher the end of the range, it will be. If it’s a little bit fewer, it will be on the [inaudible].

Joseph Belanoff: It’s really as simple as there aren’t other factors besides the number of patients that are really very appreciable.

Roanna Ruiz: Got it. Okay. And I wanted to ask a bit about your field force. So I know you’ve reached a target of 60%. Are you thinking of possibly expanding that later this year or maybe into next year? And what type of launch metrics are you looking forward to help you make that kind of decision?

Joseph Belanoff: Sean, please.

Sean Maduck: Yes, it’s a great question. I’ll start by saying we’re always evaluating the effectiveness of the team and looking to see what is the appropriate size stepping back in time a little bit. Through the pandemic, we felt that it was very important for us to maintain the stability of that team. But over the last year, we’ve taken a very hard look and that’s where we’ve made changes. We’ve strengthened and streamlined our training program, the goal of making our current clinical specialists more productive and our new clinical specialists more productive more quickly. And we’ve also, and as you just alluded to, added top talent to the team. So in terms of the current size of the team, we’re actually currently in the mid-50s, and we are continuing to add clinical specialists throughout the country.

Right now, our target is 60%, but we’re unlikely to stop there. If we can continue to find top talent, we will be adding it to the team. And as we continue to evaluate what the future looks like; we’ll determine if we need to go beyond that.

Operator: Our next question comes from the line of Joon Lee with Truist.

Joon Lee: Hi. Congrats on a strong quarter. I’m particularly in truced by your Phase IV CATALYST study of Korlym in difficult to treat diabetics, how are you making the determination of hypercortisol and advancing them to the randomized portion of the trial and how deployable is that screening for hypercortisol bio generalists and endocrinologists who treat diabetics? And lastly, what is the endpoint in the randomized portion? And is the result there sufficient to get a labeled indication for diabetic. And I have a follow-up.

Joseph Belanoff: Yes. Joon, first, welcome back. Nice to hear from you. And I think that Bill is the best guys around, I think, all of that information. So I’m going to turn it over to him.

William Guyer : So thanks for the question. So when we look at CATALYST, we designed it specifically again and collaboratively with the top diabetologist, endocrinologist just to make this as simple and easy as possible. And it’s now aligned with the guidelines, as we spoke about earlier. We have just deployed a simple test of one DST, dexamethasone suppression test and looking for those patients with a DST greater than one. Those are the patients who are then positive who then can qualify and be screened for — or enrolled into the random isoline placebo-controlled trial of Korlym. In that trial, the primary endpoint is just to look at the difference between glucose control between Korlym and that of placebo. And that will be our primary endpoint.

And related to will it change the label of Korlym — it’s already consistent with the label of Korlym because when you look at the Korlym indication, Korlym has indicated to control hyperglycemia secondary to hypercortisolism in adult patients with endogenous Cushing’s Syndrome who have type 2 diabetes.

Joseph Belanoff: And I think you asked just another small question, which was is that — is the [inaudible] test something that doctors in usual practice can undertake? The answer is yes. It’s not a hard test.

Joon Lee: Great. So if catalyst is positive, then would you need to run a trial using relacorilant in difficult to treat diabetics to get the similar use commercially. And if not, either way, actually, would dosing be different or some aspect of the drug the different between the Cushing’s patients and diabetics to maybe get different pricing given the different opportunity.

Joseph Belanoff: I just want to make sure to clarify this, all of these patients disease is hypercortisolism and diabetes or glucose intolerance is secondary to their hypercortisol. It is what is causing their hypercortisolism. So in some times, there’s no difference, except for a degree of illness between these patients. and some of them actually can be quite ill. So I just want to make that distinction. This is not diabetes in general, these medicines, whether it’s Korlym or relacorilant not for diabetes in general that for the treatment of hypercortisolism where diabetes appears as a prominent manifestation of hypercortisolism.

William Guyer : And then to answer your question about would we use relacorilant, I see no reason to repeat this study. I see this catalyst as a landmark study that would easily apply to relacorilant. And I’ll remind you, relacorilant we’re looking for an indication, a full indication for hypertension and diabetes, not just diabetes.

Operator: Our next question comes from the line of Swayampakula Ramakanth with HC Wainwright.

Unidentified Analyst: This is RK from HC Wainwright. Most of my questions have been answered, but I have a quick question on clinical data expectations for the rest of this year.

Joseph Belanoff: I’m sorry, I didn’t quite understand your question, RK. I apologize.

Unidentified Analyst: So I’m just trying to understand what sort of clinical data could we expect in this year from here to the end of the year.

Joseph Belanoff: Yes, I’m going to turn you — now I understand question. Bill, would you please answer that?

William Guyer : So as I look at all the studies that are ongoing, the one study that I could see that we are planning to submit to a conference in the fourth quarter of this year would be the NASH Phase Ib data. And so that is our plan to present that data, hopefully, at that conference. Catalysts will be close. We’re ahead of schedule. I would say it’s probably first quarter of next year, but it could — we could see results from those screening and prevalent study later this year in December.

Joseph Belanoff: Yes, I’m just going to underscore that. I think what you can count on is the Phase Ib results in NASH, we will have that but everything else falls into the next year, off in the early part of next year, but in 2024.

Operator: Our next question comes from the line of Alan Leong with Bio Watch.

Unidentified Analyst: Hey, everyone. Glad to be here and congratulations on the ongoing work.

Joseph Belanoff: Well, Alan, wonderful to hear from you. What might we help you with today?

Unidentified Analyst: Well, a few questions, and thank you for generosity. Can talk about the dynamics of [inaudible]

Joseph Belanoff: I apologize. It’s a poor connection. Could somebody just a read Alan’s question. I couldn’t hear or really apologize, Alan, we really just couldn’t hear you.

Unidentified Analyst: Sorry about that. Yes, I am using earbud. What can you tell us about — what you’ve learned about the dynamics of miricorilant with safety and efficacy in liver fat.

Joseph Belanoff: I’m going to repeat this question. What do we — the question was what have we learned about the dynamics of miricorilant in terms of efficacy and safety? Bill, could you talk to that.

William Guyer : Three pieces there. We’ve reviewed the Phase IIa data, again, using 600 to 900 milligrams, we saw those dramatic liver fat reductions in a month. corresponding with rises in liver enzymes. And that’s what allowed us to then explore various lower doses and different dosing regimens in Phase Ib and as we have studied various different dosing regimens, we really have determined the rapidity of the liver fat reductions. And we confirm that when we reviewed all of the data with our top advisers just about a month ago and we’ve determined that, that rapid reduction in liver fat is tied to that rise in increasing free fatty acids, which then causes monocondrial dysfunction, which then in turn causes that liver enzyme irritation and elevation.

And that’s key because what we also saw is as it’s livers trying to metabolize all those free fatty acids, it actually can metabolize those because we’re not seeing any dumping of fat into the bloodstream. So because in our study, we’re seeing lowering effects on triglycerides, LDL and VLDL. But importantly, we also saw that if we can slow that down and we saw that with the 100-milligram twice a week dose that when we slow that down, we see a steady decline up to 12 weeks and we saw that 30% reduction in liver fat with no rises in ALT or AST. We actually saw decreases in those liver enzymes. So that’s really what we have learned. And we’ve done many analyses looking at the slope of decline, percentage of decline. It all matches up that it really is tied to the rapidity of liver fat reduction.

And we believe we’ve solved that problem, which is why we’re going to Phase IIb.

Unidentified Analyst: The next set of questions are the following three programs, which do you think has the greatest gap in understanding from your audiences that you kind of go there and you go, wow, we have a little [inaudible] education you can do. Feel free to split the investor community versus the life science specialist ovarian cancer versus go ahead.

Joseph Belanoff: Yes. No, I just want to repeat your question, as I understand it, which is of our programs, which do we think is sort of least recognized by the investor community? And if that’s essentially a distillation of your question, I get it. Because I think one of the things that’s surprising, I think, to people until they really dig into the science. And as you know, sort of a recovering academic. So I’m really all about the science is how broad a platform cortisol modulation is. Cortisol goes into every tissue of the body. So it really has the potential to affect many disease states. Some sense, obvious why a drug like Korlym or relacorilant would be effective in Cushing’s syndrome. I think it’s initially a little less obvious why it might be effective in a neurologic disease like ALS or a disease like cancer or a variety of cancers.

But I think that the interesting thing for us is that there are individual investors who seem to depreciate kind of individually parts of the story. But I think that there are a few, and I think this is going to change over time, we really understand the global application of cortisol modulation to the whole platform. So I don’t think it’s a question of any individual program, particularly being unrecognized. I think that it’s just that some people recognize one program, some people recognize another program. And I’m really hoping to see over time is that people can actually connect all of those things because they really are connected. And I’ll give you just one sort of personal example from that is that every four years, we conduct the conference with all of our collaborators.

As you know, we have many academic collaborations at any given time. 35 or 40 of them. So they’re all over the world, they’re preclinical and they’re clinical. And we bring those people together, as you said, one time and many times, they’re unaware of the other work that people are doing, even though they’re all working in cortisol modulation. It’s our mission to make sure that people really understand this entire platform. And I hope that, as I said, even investors, when I know our busy people really take the time to appreciate the global potential of these programs.

Unidentified Analyst: The future is bright for both of us.

Joseph Belanoff: Okay. Alan. And I think with that, we’re out of questions. So I look forward to talking to everybody 3 months from now and hope you enjoy the rest of your summer. Thank you for your participation in today’s conference. This does conclude the program. You may now disconnect.