Corcept Therapeutics Incorporated (NASDAQ:CORT) Q3 2023 Earnings Call Transcript

Corcept Therapeutics Incorporated (NASDAQ:CORT) Q3 2023 Earnings Call Transcript November 1, 2023

Operator: Good day. And welcome to the Corcept Therapeutics Conference Call. At this time, all participants are in a listen-only mode. After the speaker’s presentation, there will be a question-and-answer session. [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. Today, we issued a press release announcing our financial results for the third 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 or 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 Q3 of 2023 was $123.6 million, an increase of 22% compared to the third quarter of last year. We are raising our 2023 revenue guidance again to a range of $470 million to $480 million, up from $455 million to $470 million. Net income was $31.4 million or $0.28 per share in the third quarter. Our cash and investments at September 30th were $414.8 million an increase of $51.5 million in 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 to prevent it from marketing a generic version of Korlym in violation of our patents. This September 26 through September 28, the case went to trial in Federal District Court in Camden, New Jersey. At trial, we asserted two patents against Teva, both of which concern the co-administration of Korlym with a commonly prescribed class of medications known as strong CYP3A inhibitors. Teva does not and cannot dispute the validity of our patents. That matter was settled in our favor by the post-grant review proceeding Teva initiated and lost in 2019. Teva’s only defense at trial was to argue that their generic product would not infringe either of our patents.

This was the sole issue, infringement of either patent before the court. With trial over, here is what will happen next. As is customary, each party has submitted a post-trial brief arguing that it should win given the applicable law and the facts adduced at trial. In about a week, we will each submit a short reply brief responding to the arguments in the primary briefs. These documents are publicly available at the government’s Pacer website. That’s Pacer, P-a-c-e-r. Once briefing is complete, the judge may or may not ask for oral arguments. The verdict will follow, most likely in the first quarter of next year. Of course, the timing is entirely at her discretion. The losing party is entitled to appeal any adverse decision to the Federal Circuit Court of Appeals.

Such an appeal will likely take between 12 months, and 18 months to complete. All in all, this dispute will likely not be completely resolved until the second or third quarter of 2025. Those of you who have joined our prior calls have heard me say in increasingly emphatic tones that we are confident in our case. I will say it again, we are confident in the strength of our case, supremely confident. We walked into court certain that the law and the facts are on our side, we left even more certain that the law and the facts are on our side. We look forward to the judge’s verdict. I will now turn the call over to Joe Belanoff, our Chief Executive Officer. Joe?

Joseph Belanoff: Thank you, Charlie. Our strong results in the third quarter reflect physicians increasing awareness of hypercortisolism and the harm it causes. A screening for the disease becomes more common, more physicians prescribe and more patients receive Korlym. This changing behavior has led to another record high in our quarterly revenue. We expect this trend in medical practice and with it our commercial 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 endocrinologists increasingly believe, but there are considerably more patients with Cushing’s syndrome than was once assumed. The results of our CATALYST study will likely provide further evidence to bolster this belief, which will in turn lead physicians to identify and provide effective treatment for the large group of patients whose hypercortisolism currently goes undiagnosed.

This advance in medical thinking buoy our Cushing’s syndrome business. We are raising our 2023 revenue guide range again, this time to $470 million to $480 million. We’re also very excited by the potential of our in clinical development programs. Since inception, our research and development efforts have built on the hypothesis that cortisol modulation is powerful therapeutic mechanism in many serious disorders. Our proprietary compounds modulate cortisol’s 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 product, most serious off target effects. Interestingly, while all our compounds modulate cortisol activity, they produce distinct clinical effects.

Some cross the blood brain barrier, others do not. Some perform best in models of solid tumors, others are more potent models of metabolic disease. Some appear to be tissue specific, others have more global events. These diverse qualities allow us to study a wide variety of disorders. Currently, we are conducting programs with three of our proprietary selective cortisol modulators relacorilant, dazacorilant and miricorilant in ovarian, adrenal and prostate cancer, ALS, NASH and of course Cushing’s syndrome. Additional compounds are in earlier stages of development. Important late stage clinical development milestones are approaching. In 2024, we expect data from our GRACE, GRADIENT, CATALYST, ROSELLA and DAZALS study. We also plan to submit an NDA for relacorilant in Cushing’s syndrome and to complete enrollment of our Phase 2b MONARCH study in patients with NASH.

This is a very exciting time for Corcept. We are evaluating relacorilant for the treatment of hypercortisolism in 2 Phase 3 trials, GRACE and GRADIENT. Remicorilant is a selective cortisol modulator. Like Korlym, it achieves its effect by competing with Cortisol at the glucocorticoid receptor. Unlike Korlym, it does not bind to the progesterone receptor and so does not cause progesterone related side effects. Remicorilant’s Phase 2 efficacy and safety data were compelling. Patients experienced meaningful improvements in hypertension and glucose control as well as in the other signs and symptoms of Cushing’s syndrome. There were no remicorilant induced instances of endometrial thickening or vaginal bleeding, progesterone related side effects, and no drug induced hypokalemia, a leading cause of Korlym discontinuation.

The Phase 2 trial results were published in the journal frontiers in endocrinology in July 2021. We are focused on finishing our GRACE 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 2nd Phase 3 trial in hyper Cortisolism, GRADIENT, is studying relacorilant’s 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 a less rapid decline, but their health outcomes are poor, including a significantly higher risk of premature debt. While we do not expect our NDA in Cushing syndrome to depend on data from GRADIENT, we do expect the study to produce valuable data about the treatment of an etiology of Cushing syndrome that affects many patients.

Our Phase 4 CATALYST trial is the largest study ever conducted to establish the prevalence of hypercortisolism in patients with difficult to control diabetes. Many independent studies conducted over the last 15 years have found that the prevalence of hypercortisolism in patients with type two diabetes is substantially higher than in the general population. The most prominent diabetologist in the United States helped us design, and are participating in CATALYST, which has the potential to become a landmark in guiding physicians understanding of Cushing’s syndrome. We expect data from the prevalence phase of the CATALYST study early next year. 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 in chemotherapy is meant to induce in solid tumors. Cortisol works against the beneficial effect of chemotherapy by suppressing apoptosis, and our successful controlled Phase 2 trial in women with platinum resistant ovarian cancer. The addition of our selective cortisol modulator relacorilant enhanced 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 had progressed on two or more previous lines of treatment, including previous taxanes relacorilant appeared to resensitize their tumors to chemotherapy’s beneficial effects. Those who received relacorilant intermittently, the day before the day of and the day after they received nab-Paclitaxel exhibited 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 relacorilant group also lived longer than those at the comparator arm with a P-value that approached statistical significance, 29% of the patients who took intermittent relacorilant were alive two years after study start versus only 14% of those who took nab-paclitaxel alone. Just as important, the woman who received relacorilant plus nab-paclitaxel experienced no additional side effect burden compared to those who received nab-Paclitaxel alone. The results from this study were published in the Journal of Clinical Oncology in June of this year. Results have also been featured in podium presentations at the 2021 and 2022 European Society for Medical Oncology ESMO meetings, and at the 2022 American Society of Clinical Oncology, ASCO Annual Meeting.

ROSELLA, our pivotal multinational Phase 3 trial in platinum resistant ovarian cancer is enrolling patients. ROSELLA’s goal is simply to replicate our positive Phase 2 results in a larger group. ROSELLA’s designed closely tracks our Phase 2 study. Planned enrollment is 360 women randomized, one-to-one to receive either 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 the 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 expect data by the end of next year. Leading Gynecological Oncologists have told us that relacorilant’s potential benefit improved progression free and overall survival without increased side effect burden would constitute an important medical advance and the relacorilant plus nab-paclitaxel has the potential to become a new standard of care in women with platinum resistant ovarian cancer.

A second mechanism by which cortisol modulation may prove 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 will close this tumor escape route. Our collaborators at the University of Chicago have initiated a randomized placebo controlled Phase II trial relacorilant plus Enzalutamide in patients with prostate cancer, before these patients have had an initial prostatectomy.

A 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 those therapies. We are conducting a Phase 1b trial of relacorilant plus the PD-1 checkpoint inhibitor Pembrolizumab in patients with advanced adrenal cancer, whose 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 II trial dazucorilant in patients with ALS is enrolling patients briskly. Dazucorilant is a selective cortisol modulator that has shown great promise in animal models of ALS, improving motor performance and reducing neuro inflammation and muscular atrophy. We are conducting this important study at sites in Europe and the United States. We expect data by the end of next year. Finally, I’ll turn to our program in NASH, 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 study, 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 ALD and AST.

The improvement 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 Phase 1b dose finding study found that patients who received just 100 milligrams of Miricorilant orally twice a week for 12 weeks experienced an approximately 30% reduction of liver fat and showed improvements in liver enzymes and markers of liver disease. These patients also experienced improvements in key metabolic and lipid measures such as Homa IR, serum triglycerides and LDL. Importantly, miricorilant was very well tolerated with no apparent GI side effects. We will present these results at the upcoming AASLD meeting in Boston. We intend to build on the promising results of our Phase 1b study with our 150-patient randomized double blind placebo controlled Phase 2b MONARCH trial of Miricorilant in patients with biopsy confirmed NASH.

Patients will receive either 100 milligrams of Miricorilant or placebo orally, twice weekly for 48 weeks. The primary endpoint is reduction in liver fat with NASH resolution and fibrosis improvement as key secondary endpoints. In conclusion, we are extremely optimistic about the future of Corcept. Partitioning syndrome business has tremendous growth potential and generates substantial profits even as we invest in our advancing development programs. We are again raising our 2023 revenue guidance and anticipate growth for years to come. Data from our large CATALYST study will help physicians to better identify and treat patients whose difficult to control diabetes is caused by hydrocortisolism. A population whose Cushing’s syndrome too frequently goes undiagnosed.

Our development programs are generating increasing evidence that cortisol modulation as the potential to treat a wide range of diseases. Cushing’s syndrome, ovarian cancer, prostate cancer, ALS and NASH are current examples. There will be others. We have many more proprietary selective cortisol modulators in our portfolio with potentially very different clinical attributes. We will advance the most promising of these to the clinic. In 2024, we expect data from our GRACE, GRADIENT, and CATALYST studies in Cushing’s syndrome, our pivotal RASELA trial in ovarian cancer, and our DASL study in ALS. We expect to submit an NDA for relacorilant in Cushing’s syndrome and to complete enrollment in our MONAC Phase 2b study in NASH. As I have said, it is an exciting time for Corcept.

Before we take questions, I want to take a moment to introduce the newest member of our executive team, Monica Toledo, whose first day at Corcept is today. Monica, as President of Emerging Markets, will be responsible for our newer therapeutic areas such as ALS and NASH. We look forward to her contributions. Monica, welcome to Corcept. Let’s proceed now to questions.

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Q&A Session

Operator: [Operator Instructions]. Our first question comes from Matt Kaplan with Ladenburg. Your line is open.

Matthew Kaplan: Hey guys, thanks for taking the questions and congrats on a strong quarter. To delve into, your pipeline a little bit and specifically the near-term readouts that we have coming up in 2024. I guess specifically, first, can you talk a little bit more about the GLUATE study and the primary endpoint there, and what you’re looking to show in that study?

Joseph Belanoff: Hey, hey Matt, I apologize. I really am having trouble hearing your question. The why isn’t so good. Is it possible to either repeat it or call back in?

Matthew Kaplan: Different way, hang one second. [Indiscernible]

Joseph Belanoff: Matt question?

Matthew Kaplan: Is that any better?

Joseph Belanoff : No, we’re just not hearing you. I’m sorry, Matt. Want to just redial. We’ll pick you up again. Next question.

Operator: Our next question comes from David Amsellem with Piper Sandler. Your line is open.

David Amsellem : So, hope you can hear me well. So, couple questions. First, can you provide specifics on the year-over-year volume growth for Korlym? That’s number one. And then, I guess as part of that question, my understanding is third quarter last year was somewhat weaker. So potentially we’re looking at more favorable year-over-year comp. So just talk about the volume growth dynamics. I know there was also pricing action earlier this year, just so just help us understand the — what was volume, what was price, and then in terms of your comments on screening for hypercortisolism and greater diagnoses and treatment starts, what does that mean going forward? I know, you’re not in a position of guide for ‘24, but is what we’re seeing this seeming inflection — is that something that you’re looking at as sustainable? Thanks.

Joseph Belanoff : Okay. Thank you, David. I think we’ve got both of those questions. I first want introduce everyone reintroduce everyone to Sean Maduck, who is the President of our endocrinology division. And he can address your first question.

Sean Maduck : Yes, David, thank you for the question. So, in terms of year-on-year growth, we have 22% growth, 12% of that was driven by volume, and 9% was driven by price. And I think your next question was sort of the sustainability through Q4. I mean, that’s built into our range. We expected the growth we experienced in Q3, and we expect that growth to continue for many quarters. We had more new physicians and existing physicians prescribed colon for patients across the country. And that’s what drove our increased guidance range and the revenues you’re seeing.

Joseph Belanoff : Yes. And David, as a general answer to your second question, I think what we’re really seeing out in the world is the recognition that hypercortisolism is considerably more common than I think people once assume. While it’s not, they’re not a million people with hypercortisolism, it’s not the ultra rare disease that people once thought it was. So, we actually think that this expansion because of really screening is going to continue for a substantial period of time. Some of those patients will eventually fall to Korlym, others will be treated in different ways. But the idea that this is an important medical therapeutic area that has really been underdressed, I think is gaining acceleration.

David Amsellem : That’s helpful. If I may sneak in a quick follow up, in terms of the new starts and just the growth, are you getting a good chunk of that growth from physicians who are new to Korlym treatment?

Joseph Belanoff : I’m going to pass you back to Sean.

Sean Maduck: Thank you for the question. We’re getting a mix of both. We have new prescribers every single month, every single quarter, and we also have physicians that have previously prescribed Korlym, prescribe again for many subsequent patients potentially. So, the short answer is yes across both groups.

Operator: Our next question comes from Matt Kaplan with Ladenburg. Your line is open.