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Edited Transcript of CORT earnings conference call or presentation 1-Aug-19 9:00pm GMT

Q2 2019 Corcept Therapeutics Inc Earnings Call

MENLO PARK Aug 29, 2019 (Thomson StreetEvents) -- Edited Transcript of Corcept Therapeutics Inc earnings conference call or presentation Thursday, August 1, 2019 at 9:00:00pm GMT

TEXT version of Transcript

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Corporate Participants

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* Andreas Grauer

Corcept Therapeutics Incorporated - Chief Medical Officer

* Gary Charles Robb

Corcept Therapeutics Incorporated - CFO & Secretary

* Joseph K. Belanoff

Corcept Therapeutics Incorporated - Co-Founder, President, CEO & Director

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Conference Call Participants

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* Matthew Lee Kaplan

Ladenburg Thalmann & Co. Inc., Research Division - MD & Head of Healthcare Equity Research

* Neil Eric Carnahan

Stifel, Nicolaus & Company, Incorporated, Research Division - Associate

* Pete George Stavropoulos

Cantor Fitzgerald & Co., Research Division - Associate Analyst

* Tazeen Ahmad

BofA Merrill Lynch, Research Division - VP

* Alan Leong;BioWatch News

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Presentation

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Operator [1]

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Good day and welcome to the Corcept Therapeutics Conference Call. Today's conference is being recorded. (Operator Instructions)

At this time, I would like to turn the conference over to Chief Financial Officer, Charlie Robb. Please go ahead, sir.

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Gary Charles Robb, Corcept Therapeutics Incorporated - CFO & Secretary [2]

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Thank you. Good afternoon, and thank you, everyone, for joining us. Earlier today, we issued a press release announcing our second quarter financial results and reviewing our research and development programs. A copy is available at corcept.com. 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 through August 15, at (888) 203-1112 from the United States and (719) 457-0820 internationally. Passcode will be 9712194.

Statements during this call, other than statements of historical fact, are forward-looking statements, based on our plans and expectations and are necessarily subject to risks and uncertainties that might cause actual results to differ materially from those the forward-looking statements express or imply. These risks and uncertainties include, but are not limited to, our ability to generate sufficient revenue to fully fund our commercial operations and development programs, the availability and competitive viability of competing treatments for Cushing's syndrome, including generic versions of Korlym, our ability to obtain acceptable prices or adequate insurance reimbursement for Korlym and risks related to the development of our product candidates, including clinical outcomes, regulatory approvals, mandates, oversight and other requirements. 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 revenue guidance and our expected growth and cash generation in future years, physician awareness of hypercortisolism and the selection of Korlym as the optimum medical treatment, the timing, cost and outcome of our lawsuit against Teva Pharmaceuticals and Sun Pharmaceuticals, and the challenges to our intellectual property before the Patent Trial and Appeals Board, the scope and protective power of our intellectual property, the clinical attributes of relacorilant, miricorilant and exicorilant, the progress, timing, design and results of our development programs, including the GRACE trial and the other current and planned clinical trials of our selective cortisol modulators, final acceptance of the European Medicines Agency's recommendations of -- recommendation of orphan drug designation for relacorilant for the treatment of pancreatic cancer, and the benefits of orphan drug designation in the European Union and the United States. We disclaim any intention or duty to update forward-looking statements.

Corcept's revenue in the second quarter was $72.3 million, a 16% increase from the second quarter of 2018. We reaffirm our 2019 revenue guidance of $285 million to $315 million.

Second quarter GAAP net income was $20.2 million compared to $18.2 million in the same period last year. Excluding noncash expenses related to stock-based compensation and the utilization of deferred tax assets, together with related income tax effects, our non-GAAP net income in the second quarter was $31 million compared to $25.4 million in the second quarter of 2018.

Our cash and investments at quarter end were $225.7 million compared to $215.7 million at March 31, 2019. We repurchased 1.6 million shares of common stock in the second quarter, pursuant to our stock repurchase program at a cost of $17.4 million. Our stock repurchase program expired by its terms on June 30. We believe our profits, together with our cash on hand, will be sufficient to fully fund our commercial business, complete our current development programs in Cushing's syndrome, solid tumors, antipsychotic-induced weight gain and NASH, and advance through the clinic additional proprietary selective cortisol modulators.

Now a brief legal update. As many of you know, Teva Pharmaceuticals is seeking to market a generic version of Korlym, and we have sued Teva for patent infringement. In addition, Teva has asked the Patent Office Trial Appeals Board (sic) [Patent Trial and Appeal Board], or PTAB, to institute a post-grant review, or PGR, of our patent covering methods of co-administrating Korlym with CYP3A inhibitors. This patent expires in 2037.

The PTAB will decide whether or not to institute Teva's requested PGR in November. If the PGR is instituted, the earliest we expect final resolution of this matter, including any appeals, is the first quarter of 2021.

Sun Pharmaceuticals recently notified us that it is seeking FDA approval to market generic Korlym. On July 22, we sued Sun for patent infringement. Our lawsuit stayed FDA approval of Sun's proposed product until the earlier to occur 30 months from our receipt of Sun's notice letter, approximately December 2021, and a decision by the district court that the patents we have asserted against Sun are invalid and unenforceable or not infringed. Despite overlapping subject matter and legal issues with our lawsuit against Teva, a dispute with Sun is separate and will likely follow its own time line.

Finally, earlier this year, the PTAB instituted an inter partes review, or IPR, of another of our patents, the '348 patent that was brought by Neptune Generics, a subsidiary of the litigation finance firm, Burford Capital. The earliest we expect final resolution of this matter, including any appeals, is the third quarter of 2020.

With respect to all these disputes, we are confident in our legal position and will defend our intellectual property vigorously.

I'll now turn the call over to Dr. Joseph Belanoff, our Chief Executive Officer. Joe?

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Joseph K. Belanoff, Corcept Therapeutics Incorporated - Co-Founder, President, CEO & Director [3]

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Thank you, Charlie. We are very pleased with the performance of our Cushing's syndrome franchise last quarter. As we expected, patients taking Korlym work through the insurance reauthorization process, many of them must undergo at the start of each year. Their care was not interrupted because we gave them Korlym at no cost. But the temporary pause in reimbursement for some patients did reduce our first quarter revenue, as it has every year since Korlym's launch. Meanwhile, we continue to add prescribers and patients, growth we expect to continue. There's is much left to do. There are 8,000 endocrinologists in the United States. Nearly every endocrinology practice in the country has a few patients with Cushing's syndrome. To reach more physicians, we are increasing the size of our field sales force from 41 clinical specialists to about 55. The exact number and the pace of hiring will depend on how quickly we find candidates with the skill, experience and dedication to helping patients required to work effectively with physicians treating patients with this complex disease. We expect the additional clinical specialists to contribute significantly to our commercial business in 2020 and beyond.

Korlym has shown, first in its pivotal trial and then in commercial use, that cortisol modulation can greatly benefit many patients. However, Korlym causes off-target effects that limit its use. Korlym treats Cushing's syndrome by modulating cortisol activity as a glucocorticoid receptor, GR for short. The Korlym does not just modulate the effect of cortisol, it also binds the progesterone receptor, PR for short. Korlym's affinity for PR makes it an abortifacient. In fact, the active ingredient in Korlym is the same as in the medication called the abortion pill.

Korlym's PR affinity also causes endometrial thickening and vaginal bleeding in a significant portion of the women who take the medicine, regardless of their age. By a different mechanism, Korlym also causes low potassium in many patients, a condition known as hypokalemia. Potassium is important for the normal function of nerve and muscle cells, particularly heart muscle cells. Low levels of potassium can be life-threatening. Hypokalemia is manageable but requires close monitoring and often prophylactic treatment. 44% of the patients in Korlym's pivotal trial experienced hypokalemia. It is one of the leading causes of Korlym discontinuation.

Our planned successor to Korlym, relacorilant, does not cause these off-target effects. Like Korlym, relacorilant works by modulating excess cortisol activity at GR. Unlike Korlym, relacorilant is selective because it does not bind to PR, it is not the abortion pill and does not cause endometrial thickening or vaginal bleeding.

In addition, unlike Korlym, relacorilant does not significantly increase cortisol levels and does not cause hypokalemia. These are major medical and commercial advantages.

In relacorilant's Phase II trial, patients exhibited meaningful improvements in the trial's primary endpoints of hypertension and glucose control and in a variety of secondary endpoints, including weight loss, liver function, coagulopathy, insulin resistance, cognitive function, mood and quality of life. It was well tolerated. As expected, there were no adverse events caused by PR affinity, and there were no drug-induced instances of hypokalemia.

We presented these results in April at the annual meeting of the American Association of Clinical Endocrinologists. You can see our poster at the investors' Past Events tab of our website.

Relacorilant's Phase III trial, which we call, GRACE, is underway with a planned enrollment of 130 patients at 60 sites in the United States, Canada, Europe and Israel. Each patient in the GRACE study receives relacorilant for 22 weeks. Those who exhibit prespecified improvements in hypertension or glucose metabolism enter a 12-week double-blind, randomized withdrawal phase, in which half continue receiving relacorilant and the rest are switched to placebo.

GRACE's primary endpoints are the raising degree of relapse during the randomized withdrawal phase of the study, comparing patients continuing Korlym -- relacorilant and those randomized to placebo.

I'm pleased to announce that we plan to begin a second clinical trial in patients with less severe Cushing's syndrome later this year. These patients have adrenal adenomas and a more indolent disease trajectory. We expect that this study will enroll approximately as many patients as the GRACE trial, with half of the participants receiving relacorilant and the rest placebo. Many of the sites participating in the GRACE study will participate in this trial. It is important to note that this trial is not a required part of a relacorilant development program. We expect to base relacorilant's NDA for Cushing's syndrome on the results of GRACE. That being said, this etiology of Cushing's syndrome has not been studied extensively, and we expect our trial's results to contribute meaningfully to its understanding and treatment.

I will now turn to our oncology program. In tumors that express glucocorticoid receptors, cortisol stimulation suppresses the program cell death, known as apoptosis. Since chemotherapy drugs kill tumors by prompting apoptosis, this effective cortisol is harmful. Many solid tumor types, including pancreatic and ovarian, have high levels of glucocorticoid receptors, which unfortunately correlates with lower survival rates. Our Phase I/II trial of relacorilant plus nab-paclitaxel, Celgene's taxane-based drug, Abraxane, tested the hypothesis that adding a cortisol modulator to chemotherapeutic regimen will turn down cortisol's anti-apoptotic effect and allow chemotherapy to achieve its full potential.

We presented data from this trial at this year's ASCO Conference. 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 response in some patients was particularly notable. Tumor shrinkage in 2 patients with pancreatic disease lasted longer than 50 weeks. A patient with ovarian cancer exhibited tumor shrinkage for 65 weeks. The target lesion in another patient with ovarian cancer disappeared completely. These are striking results. All of these patients had undergone multiple prior lines of therapy, including treatments with nab-paclitaxel or another taxane, that any of them responded when relacorilant was added to the therapy was surprising. Our ASCO poster is available at the Investors Past Events tab of our website.

Our investigators believe, as do we, that our Phase I/II results justify larger and more definitive studies. Earlier this year, we began a 180-patient, placebo-controlled Phase II trial of relacorilant plus nab-paclitaxel in patients with advanced ovarian cancer. In addition, we have completed writing the protocol for a Phase III trial of relacorilant plus nab-paclitaxel in patients with metastatic pancreatic cancer and will seek FDA guidance regarding the fastest path to approval in that indication. Our objective is to start this trial by year-end.

The results I've described are exciting. I will quote briefly from the opinion expressed by the European Medicines Agency's Committee for Orphan Medicinal Products, the COMP for short, when they recommended that relacorilant be designated as an orphan drug for the treatment of pancreatic cancer. This is a direct quote. "Relacorilant has the potential to restore tumor sensitivity to taxane therapy. This was demonstrated by nonclinical and clinical results that is the achievement of durable partial responses or disease control in some patients despite previously failed treatment regimens. The COMP considered that the preliminary clinical data submitted by the sponsor supported the claim of significant benefit for the purpose of an initial orphan designation." We agree, if we can confirm our Phase I/II findings and subsequent larger trials, it will constitute a major advance in the treatment of these dire cancers.

Cortisol modulation may treat patients with metastatic prostate cancer by a different mechanism. Androgen stimulate growth in tumors of the prostate, which is why androgen deprivation is the standard treatment. Investigators at the University of Chicago and Memorial Sloan Kettering have shown that when prostate tumor cells are treated with androgen deprivation agents, such as enzalutamide, Pfizer's drug XTANDI, their growth begins to be stimulated by cortisol. Our hypothesis, which originates with investigators at the University of Chicago, is that adding a cortisol modulator to androgen deprivation therapy will block this tumor escape route. Investigators at the University of Chicago are leading 2 controlled Phase II trials testing this hypothesis: One examining Korlym plus XTANDI and the other relacorilant plus XTANDI. We are conducting a dose-finding trial of our proprietary selective cortisol modulator, exicorilant, formerly, CORT125281, combined with XTANDI to treat patients with castration-resistant prostate cancer, and we'll evaluate data from that trial as well as data from the trials being led by the University of Chicago investigators once it is available to determine the appropriate next steps for our development program.

I will conclude with the discussion of our programs in metabolic disease. Preclinical and clinical data have shown the cortisol modulation may play a role in treating 2 serious widespread metabolic disorders, for which there are no FDA-approved treatments, weight gain caused by antipsychotic medications and nonalcoholic steatohepatitis, or NASH.

Let me provide some background. Millions of patients rely on antipsychotic medications to treat illnesses such as schizophrenia and bipolar disorder. These medications are effective, but their side effects, including weight gain, hyperglycemia and hyperlipidemia shorten the lives of patients. Most of them die from cardiovascular disease.

In April, we began dosing healthy subjects in a Phase Ib trial to test whether miricorilant attenuates the weight gain caused by the commonly-prescribed antipsychotic medication, olanzapine. We modeled this trial on placebo-controlled studies we conducted, in which mifepristone significantly reduced the metabolic side effects of olanzapine and another antipsychotic medication, risperidone. Unfortunately, mifepristone status as the abortion pill prevented us from advancing it as a treatment for common disorders. Miricorilant is a viable candidate because it is a selective cortisol modulator. Like relacorilant, it has no progesterone receptor activity. In our current trial, 60 healthy subjects received olanzapine and either miricorilant or placebo for 2 weeks. Although the trial's primary endpoint is change in weight, we have a more fundamental goal. This is our first study of miricorilant's potential pharmacodynamic activity. Its results in animal studies were very powerful. We know from its Phase I trial that miricorilant is well tolerated. Our objective for this study is to begin to learn about its metabolic properties in people. We will have results later this year.

Later this year, we'll also have a double -- we'll also begin a double-blind placebo-controlled Phase II trial in patients with recent antipsychotic-induced weight gain. In 2020, after our program to optimize miricorilant's formulation is complete, we will initiate a Phase II trial in the reversal of long-standing antipsychotic-induced weight gain.

Now I'll say a few words about NASH, another serious metabolic disorder that affects millions of people in the United States. NASH is characterized by fatty liver, liver inflammation and fibrosis. It's a precursor to cirrhosis. Mifepristone is potent in animal models of these conditions and appears to reverse fatty liver disease in patients with Cushing's syndrome. In animal models of these conditions, miricorilant is even more potent. We expect to initiate a double-blind, placebo-controlled Phase II trial of miricorilant in patients with NASH next year.

To recap, our Cushing's syndrome business had an excellent quarter. We reaffirm our 2019 revenue guidance of $285 million to $315 million for 2019. We are significantly increasing the size of our field sales force, which should begin to contribute to our commercial results next year.

Relacorilant's Phase III NDA-enabling GRACE trial continues to enroll patients. Separately, we will begin a placebo-controlled, double-blind trial in patients with less severe Cushing's syndrome later this year.

We continue to make important advances in our oncology program. We presented striking data from a Phase I/II trial at ASCO this year. The data showed durable disease control in patients with metastatic ovarian and pancreatic cancer well beyond what is expected for a population that have received multiple prior lines of therapy, including prior use of taxanes.

We are actively enrolling subjects in a 180-patient controlled Phase II trial, relacorilant plus Abraxane in ovarian cancer. We expect to begin a Phase III trial in patients with metastatic pancreatic cancer later this year. Our trial of exicorilant plus enzalutamide continues to generate data as the trial's being led by investigators at the University of Chicago with Korlym and relacorilant.

Our metabolic program achieved an important milestone, our leading compound miricorilant is being tested for the attenuation of antipsychotic-induced weight gain in healthy subjects and 2 Phase II trials on antipsychotic-induced weight gain will be conducted, one expected to begin later this year and another one to begin in 2020.

We also plan to start a Phase II trial of miricorilant to treat patients with NASH next year.

I'll stop here for questions.

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Questions and Answers

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Operator [1]

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(Operator Instructions) I'll take our first question from Charles Duncan of Cantor Fitzgerald.

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Pete George Stavropoulos, Cantor Fitzgerald & Co., Research Division - Associate Analyst [2]

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This is Pete Stavropoulos on for Charles Duncan. Congratulations on the quarter. I have a couple of questions about the GRACE study. How's the enrollment going? And can you give us a sense in terms of timing for a potential outcome for the Phase III? This is sort of in light of some of your competitors having -- one of your competitors having difficulty in enrollment and have delayed top line data for their program.

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Joseph K. Belanoff, Corcept Therapeutics Incorporated - Co-Founder, President, CEO & Director [3]

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Okay. I'd like to reintroduce everyone to Andreas Grauer, who's our Chief Medical Officer. And Andreas, why don't you take the question?

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Andreas Grauer, Corcept Therapeutics Incorporated - Chief Medical Officer [4]

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Yes. So we just give you a quick update on how GRACE is going. We had a very good investigator meeting in Europe just recently, with a lot of enthusiasm of all the involved investigators. And as you may remember, in our Phase II program, the majority of the patients were recruited in Europe and only a smaller percentage in the U.S. So in the moment, we're starting up all these sites in Europe, and as you may know, July and August are relatively slow months for enrollment. But our goal is to make the fall extremely productive in terms of enrollment and to complete enrollment, hopefully, by the end of this year. The study design is the 6-month open-label phase in a 3 months randomized trial phase, so the last patient out, that should then be 9 months later.

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Joseph K. Belanoff, Corcept Therapeutics Incorporated - Co-Founder, President, CEO & Director [5]

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Good. And Pete, of course, Andreas speaks that as a onetime former European. So we're working very hard to get all the sites up in Europe. It was great enthusiasm at that meeting. But the fall will really tell us where we are in enrollment, and we'll be able to give you a better sense of that. But we're confident that the Phase II results have really prompted investigators to join the trial who might not otherwise have. And we're confident that they'll be able to use the medicine successfully in patients. So really nothing changed from the last call, and we'll give you an update as we have more data in the fall.

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Pete George Stavropoulos, Cantor Fitzgerald & Co., Research Division - Associate Analyst [6]

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Appreciate that. I have another question about the new study. We have double-blind, placebo-controlled. If you can have the similar design to GRACE, we have the weaning period, patients experience clinically meaningful benefits and then they move on to the randomized control phase. And what type of outcomes are you looking at, time lines to data? And -- I'm sorry, last one, some of the burden of disease -- less severe symptoms with the same burden of disease and pricing?

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Joseph K. Belanoff, Corcept Therapeutics Incorporated - Co-Founder, President, CEO & Director [7]

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I'll also point it to Andreas, again. And there was a lot in that, but Andreas, go for it.

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Andreas Grauer, Corcept Therapeutics Incorporated - Chief Medical Officer [8]

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Yes. So let me try to answer that step by step. So first of all, no, it will not be the same design as in GRACE because it will be a placebo-controlled study right from the start. So we will respectively randomize the patients into 2 groups, one will receive the active treatment of the Korlym, and then the other one -- the other half will receive placebo. We are planning for a study duration of 6 months. And we will be doing this study as a placebo-controlled study because the burden of disease in this particular population is somewhat lower than in the population that we're enrolling in GRACE. These are patients that have adrenal tumors and the hormonal changes are somewhat less pronounced, but there is some significant data pointing to the fact that these patients also suffer serious long-term consequences if this disease remains untreated. And that's why we feel it's really important to treat those patients in this trial.

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Joseph K. Belanoff, Corcept Therapeutics Incorporated - Co-Founder, President, CEO & Director [9]

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And Pete, I'd like to just add because it came up earlier, we really thought that this meeting in Europe was a seminal investigators meetings and someone who attended it, I can tell you, that probably the single period of greatest energy, people were interested all along, was for this study. This is -- the literature over the last 6 years has really indicated that these patients who are often sort of watched and waited never got better, and yet it's never been studied in a rigorous way. And we really think it's a big advantage to the field to actually do this study, although there's certainly plenty of case reports with individuals at this variant of Cushing's syndrome improving, this is really the first time a placebo-controlled study has been attempted that really specifies this group. And we think it's actually very, very meaningful for the field as we go forward.

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Pete George Stavropoulos, Cantor Fitzgerald & Co., Research Division - Associate Analyst [10]

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I don't know if I missed it, do you have any sort of time lines to data?

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Andreas Grauer, Corcept Therapeutics Incorporated - Chief Medical Officer [11]

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Well, for the -- we're in the process of finalizing the protocol of (inaudible) and at that point, the submissions in -- across the both U.S. and Europe will have to happen, and we need to get approval for this trial. The -- but we will use pretty much the same centers that we are using currently for GRACE that should give us economies of scale and make the approval and start-up process of this trial faster. What we're expecting normal period of approximately 6 to 9 months in this trial, and then it's a 6-month trial, so it's shorter than the GRACE trial, and that kind of gives you the -- like the drivers for the study and when we're going to be able to see results.

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Operator [12]

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We'll now take our next question from Tazeen Ahmad from Bank of America.

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Tazeen Ahmad, BofA Merrill Lynch, Research Division - VP [13]

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Just wanted to ask you about your thoughts on recent rhetoric coming probably from both parties about price control. You guys did take a -- it seems like a 9% price increase today on Korlym, and I kind of wanted to ask you your thought process about how you decide if you want to take a price increase. It seems like your last one was quite some time ago. It looks like it was 6% back in 2017. As we move into an election year, how -- are you thinking about your internal modeling about what kind of price sensitivity the market might have, of course, taking into account that you're a rare disease marketer? How should we -- as we model out your assumptions for sales, think if there any contribution from price?

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Gary Charles Robb, Corcept Therapeutics Incorporated - CFO & Secretary [14]

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Tazeen, thanks for the question. This is Charlie, obviously. So this is the first -- as you pointed out, this is the first price increase we've taken in about 19 -- 18, 19 months. And it's something we look at every quarter, trying to judge what the appropriate price is. And our -- we've sort of got a twofold view. One is that our obligation is to develop our compounds as efficiently and expeditiously as we can with the revenues that we bring in and make sure that patients aren't denied of Korlym on the basis of financial need. And we've had sort of lived up to our part of that -- our part of that sort of the social contract. We're also always careful to make sure that we are never the tallest nail on the board or well have remained, and we will remain, I think, well in the middle of the herd. As to exactly what will shake out politically, we're not sure, but I think we feel confident in the increases we've taken, feel like they're justified, and we feel we're living up to our side of the bargain in this economy, in this policy. And that's really all the guidance I can give you on that point. Unless Joe, you -- would you care to add anything to that?

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Joseph K. Belanoff, Corcept Therapeutics Incorporated - Co-Founder, President, CEO & Director [15]

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No, but I guess would just reemphasize that this is not sort of a once-in-a-while topic. We think about it all the time. We really evaluate it every quarter, and we -- and we felt like this really was an appropriate time to take the price increase. I just want to point out to the group, if it wasn't clear then that there was no price increase in the second quarter.

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Gary Charles Robb, Corcept Therapeutics Incorporated - CFO & Secretary [16]

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That's right.

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Joseph K. Belanoff, Corcept Therapeutics Incorporated - Co-Founder, President, CEO & Director [17]

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The price increase we took actually did begin today, and so the second quarter results are absent any price increase at all.

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Gary Charles Robb, Corcept Therapeutics Incorporated - CFO & Secretary [18]

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Yes.

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Tazeen Ahmad, BofA Merrill Lynch, Research Division - VP [19]

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Okay, great. Maybe, I guess, keeping in line with that thought. You have reiterated your guidance for the full year. It didn't seem to me that you would need that much growth in -- sequentially in each quarter even to get to, let's say, the middle of your guidance range. And now that you have taken this 9% price increase, why not increase the range maybe even on the bottom end a little bit?

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Joseph K. Belanoff, Corcept Therapeutics Incorporated - Co-Founder, President, CEO & Director [20]

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Yes. I think that we -- so first of all, our guidance and our pricing decisions, just so everybody understands, really are sort of independent matters. And one of the things we don't take into account setting our prices, what we like our revenue to be. We determine our guidance based on our best estimate for the year, and then we determine pricing on its own merits on a sort of quarterly basis. So for us, they're really separate considerations. And we didn't narrow our guidance this quarter because we think that our revenue still fall within that range. But as the year goes along and we get closer to the end, guidance like price and everything else is something we'll look at and decide if it's appropriate to narrow it. On the next call, we'll see.

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Operator [21]

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We'll now take our next question from Adam Walsh from Stifel.

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Neil Eric Carnahan, Stifel, Nicolaus & Company, Incorporated, Research Division - Associate [22]

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This is Neil Carnahan on for Adam. On miricorilant, can you talk to us about the development path you guys are thinking about? You've launched placebo-controlled Phase II study earlier this year, another in 2020 for antipsychotic-induced weight gain. Can you just expand on these? Have you guys given thoughts to design? Is that design finalized? Enrollment size? Any details you guys can share there.

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Joseph K. Belanoff, Corcept Therapeutics Incorporated - Co-Founder, President, CEO & Director [23]

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Yes, I'm going to punt it to Andreas just for that question.

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Andreas Grauer, Corcept Therapeutics Incorporated - Chief Medical Officer [24]

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Yes. Joe told you that miricorilant is a -- has a very interesting pharmacology. The module is not very easy to formulate, and we're still optimizing the formulation. So we have -- we're starting with 1 Phase II trial, in which, we think, we can study the medication in its current format. And that is a trial in patients that have recently gained weight on antipsychotic medication. The expected trial size here is approximately 100 patients. And the trial will be placebo-controlled. So it will be a one-to-one randomization active versus placebo. And we're expecting enrollment period of approximately 1 year and to start that trial by -- in the last quarter of this year. The next trials, we will start once we have more -- better, more suitable formulation for those, and we're planning to start a second trial in antipsychotic-induced weight gain. And we're also planning to start the trial in NASH.

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Joseph K. Belanoff, Corcept Therapeutics Incorporated - Co-Founder, President, CEO & Director [25]

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Yes. And let me just elaborate a little bit because I brought -- I want to make sure that if it is something that's interesting to you that, at least, you have the information. This has been a very, very potent molecule in animal models. As I said before, on a per kilogram basis, even significantly more potent than mifepristone, which itself was very potent. So the issue really is just -- we've alluded to this formulation issue is that we now have 100-milligram tablets, which really seem to work very well. And we think that the -- but we think that the dose is likely to fall sort of in the 600- to 900-milligram basis. And what we'd really like to be able to do is create a tablet that just had more milligrams in it so people don't have to take 6 or 9 milligrams a day. And we're hard at work at that. We have lots of resources attending to it, and we think that, that is really a solvable problem, but that's the issue. In the meantime, in the ways that we've described that we really are going to continue to accumulate data is very important that we can really show that the data we've seen in animals does translate to people. So the first study that you will see is the healthy subject study, we've talked about. That will be later this year. And then the next study after that is in the patients who have recently gained weight on antipsychotic medication, and both of those will be controlled, double-blind studies. So I think we'll get some indication of whether or not the medication's activity is real and substantial.

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Operator [26]

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And I'll take our next question from Matt Kaplan of Ladenburg Thalmann.

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Matthew Lee Kaplan, Ladenburg Thalmann & Co. Inc., Research Division - MD & Head of Healthcare Equity Research [27]

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Congrats on the quarter. I wanted to just follow-up on Adam's question in terms of miricorilant, and specifically the Phase Ib study as that's going to be the next data readout that we have, I guess, from Corcept. Can you give us a little bit more color in terms of what we should be looking for in that Phase Ib study as the data readouts, I guess, specifically, the metabolic effects that we should be looking for and what you're going to looking at.

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Joseph K. Belanoff, Corcept Therapeutics Incorporated - Co-Founder, President, CEO & Director [28]

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Yes. Matt, let me just back up a little bit, just so that everybody -- and I know you're very familiar with the program, but others may not be quite as familiar. This is a compound, which in models of antipsychotic-induced weight gain, among other things, produced very potent results. And those studies are actually -- we're covering academics here, so these studies are actually published and anyone can go read about them. This is the first study we've done in people beyond the Phase I study that really established that the doses we had in line were well tolerated, which they did. So it really is the first test of pharmacodynamic effect. It's a 2-week study. So we're obviously not going to see the effects that you might see if the medicine was active in a 6-month study. But I think it will give us some beginning indications of whether we're in the right dose range, and whether the metabolic effects like weight gain or change in glucose tolerance or change in -- lipid profile changes in that period of time. So you really should consider an opening study. I'm very excited about it to do it, but we're learning. And I think part of the -- just sort of more globally, this is a molecule that we think is going to be very, very meaningful to Corcept over a long period of time. And we're in the fortunate position right now to really be able to do this in a very methodical way. We have the resources to do it and really get it right. And we're going to do that because we think this one has long legs.

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Matthew Lee Kaplan, Ladenburg Thalmann & Co. Inc., Research Division - MD & Head of Healthcare Equity Research [29]

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Okay, that's helpful. And then just shifting gears a little bit to your oncology programs. With the 180-patients study in ovarian cancer enrolling, can you give us a sense in terms of where you are in that study in terms of being able to complete enrollment? What could be the time line for that Phase III?

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Joseph K. Belanoff, Corcept Therapeutics Incorporated - Co-Founder, President, CEO & Director [30]

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It's a little uncertain as to exactly what it's going to be. The initial sites are open at this point. They were actually sites that participated in the Phase I/II study, but to enroll that number of patients, we're having -- of course, have to enlarge that study. In fact, there's a whole European group who is going to be entering that study who isn't online yet. So I can't give you a really good sense of when it's going to conclude, certainly not going to be this year. There's no data readout this year. Next year would be an ambitious goal, but we're going to try to go for it. We'll seize quickly as we can, and we'll just update you as we go along, when we get a better sense of it. But we really just are in for the bulk of it, the site-opening period at this point, and we're hard at work at that.

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Matthew Lee Kaplan, Ladenburg Thalmann & Co. Inc., Research Division - MD & Head of Healthcare Equity Research [31]

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Okay. And then in terms of pancreatic cancer Phase III potential, I guess, pivotal study, what are you -- when would you be meeting with the FDA to solidify to lock in on the design of that study?

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Joseph K. Belanoff, Corcept Therapeutics Incorporated - Co-Founder, President, CEO & Director [32]

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Yes, I'm going to get you back to Andreas for that.

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Andreas Grauer, Corcept Therapeutics Incorporated - Chief Medical Officer [33]

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Yes. So the -- we presented the results at ASCO, and at the same time, also had a meeting with our investigators for this trial, and they were really very excited about the results that we presented to them and encouraged us to go forward and to pursue registration. So based on their feedback, we created runup and developed a protocol. And now, as the next step in the fall, we're going to be seeking FDA feedback on our plans for registration with this compound.

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Joseph K. Belanoff, Corcept Therapeutics Incorporated - Co-Founder, President, CEO & Director [34]

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Yes. So Matt, the short answer is, as quickly as we can, we think that's going to occur, hopefully, early in the fall.

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Operator [35]

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We'll now take the last question from Alan Leong from BioWatch News.

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Alan Leong;BioWatch News, [36]

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I have a couple of questions. And Joe, Charlie, Sean and Andreas, it's good to talk to you again. Congratulations on the sales. I have a question along those lines. Your sales -- you're increasing sales revenue, and you've gotten to a certain company size as well as diversity of drugs. I'd like to get your thoughts on how you view the vertical integration? For example, your good candidates are small molecules and they appear reasonably straightforward to manufacture. And so just going forward, your thoughts of how you view the company in terms of integrating?

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Joseph K. Belanoff, Corcept Therapeutics Incorporated - Co-Founder, President, CEO & Director [37]

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I'm not sure I entirely understand your question, Alan, but are you referring to whether our prospects for commercializing our own molecules going forward?

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Alan Leong;BioWatch News, [38]

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Yes, yes. Were there -- I think -- yes, go ahead.

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Joseph K. Belanoff, Corcept Therapeutics Incorporated - Co-Founder, President, CEO & Director [39]

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Well, it's a good question because I don't think we've ever been asked it. But I think the issue is this, it's something that we -- we always consider, and you know, you've followed Corcept for many, many years, to sort of buy-versus-build idea is always in the forefront of our mind. And we've been very efficient about that over a long period of time. I think with Cushing's syndrome, as an example, we really have an understanding of what the disease is like and where the doctors are, and we've learned a lot as we commercialized Korlym. Many of those lessons are going to be very applicable to what we do with relacorilant. We also believe that for any reasonably sized disorder, particularly any other orphan disorder, we have the ability to commercialize those indications ourself, particularly in the United States. Open questions are, will we commercialize our new compounds by ourselves in Europe or the rest of the world or have a partner? And then the second question is, for the really large disorders, if we were fortunate enough to have a product -- to have a molecule, which makes it to be a product, something like miricorilant in antipsychotic-induced weight gain, whether the more efficient strategy is for us to be the commercial agent, or whether we partner with a different company at that point in time? And those questions really are on our mind, but we just haven't come to decisions with them. And as we do, we will fill you in as we go along.

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Alan Leong;BioWatch News, [40]

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Okay. The other ones have to do with the new trial that (inaudible), let's call it, adrenal adenoma or -- and I always kind of spot on, call it, subclinical. Now, really kind of a nature intent, are you taking a really wide swath of patients, some moderate to, so called, very modest? And are you hoping to capture diabetic and NASH subsets? And lastly, around this -- yes, go ahead.

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Joseph K. Belanoff, Corcept Therapeutics Incorporated - Co-Founder, President, CEO & Director [41]

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No, no, no. What I was going to say is that, first, I'd say this is a little bit of (inaudible) for us. Subclinical Cushing's syndrome, I hope I never hear that term again, because these patients have Cushing's syndrome. I mean people who have glucose intolerance, hypertension and other metabolic issues have serious clinical symptoms. So no, this is a group that has -- all of them have Cushing's syndrome, as it's described, and their difference is the etiology of adrenal adenomas as opposed to pituitary adenomas tends to producing more indolent course, but one which has great pathology associated with it. And that's been more and more recognized over the last 6, 7 years, although you see reports of it all the way back to the 1990s. And actually, an interesting historical point is it started to really get examined when MRI imaging became good enough that when people had imaging for other reasons, they would note adrenal tumors and then wonder what to do with them. But over time, those birds have really come home to roost, and there really is now increasing need to do something with them, whether it's a drug or surgery, whatever it is, there's a real pathology there. So these are all patients with Cushing's syndrome, they're not particularly patients. They may have fatty liver, they may have other things associated with them, but their primary issue is Cushing's syndrome hypercortisolism.

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Alan Leong;BioWatch News, [42]

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Yes. You hit something pretty interesting. I wonder if you can provide some color on the impact of adenoma versus regular severe Cushing's, for example, the percentage of elderly with metabolic syndrome that adenomas -- I understand if I'm not mistaken, it's quite high. And maybe you could just give a little bit of color on that?

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Joseph K. Belanoff, Corcept Therapeutics Incorporated - Co-Founder, President, CEO & Director [43]

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Well, I think it's really unknown exactly to what degree it exists. And I had said this on previous calls, we always say that there are about 20,000 patients with Cushing's syndrome and about half are cured with surgery. And so it leaves us about 10,000 patients. Now even nobody really knows this instead of 20,000 at the top end, is it 30,000 or 40,000, I mean, no one really knows the answer to that. But we do know that when more aggressive screening is done that these patients show up. And in fact, our whole commercial effort, I think, around Cushing's syndrome is do screening. Didn't necessarily mean patients can end up with Korlym, but actually diagnose whether they have Cushing's syndrome. And actually like, I'll re-tee a couple of things, this is actually from the endocrine society guidance, an example. In one study, 2% to 3% of patients with poorly controlled diabetes had surgically confirmed Cushing's syndrome. So I think the real effort is that we want endocrinologist to at least consider this possibility because appropriately treated, whatever the etiology, if the etiology -- if the problem is excess cortisol activity, reducing cortisol activity in whatever way you do it is going to improve the clinical condition. So that's really the story. I don't actually -- in fact, nobody really has the exact demographics, not 1 million patients with Cushing's syndrome, but could there be 30,000 or 40,000 instead of 20,000, there could be.

Thank you, everybody, for listening in on a hot summer afternoon. Enjoy the rest of the summer, and we look forward to talking to you in the fall.

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Operator [44]

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This now concludes today's call. Thank you for your participation. You may now disconnect.