Welcome to the Corcept Therapeutics Conference Call. My name is Nathan and I will be your operator for today's call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session. Please note that this conference is being recorded. I'll now turn the call over to CFO, Charlie Robb. You may begin.

Thank you. Good afternoon. My name is Charlie Robb, Corcept’s Chief Financial Officer. Joining me today is Dr. Joseph Belanoff, our Chief Executive Officer. Thank you all for participating in the call. Earlier today, we issued a news release giving our third quarter 2016 financial results, and then for an adjustment of our 2016 revenue guidance and a corporate update. To get a copy of this release, go to corcept.com and click on the Investors' tab. 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 15th, at 888-843-7419 from the United States and 630-652-3042 internationally. The passcode will be 43632675. This information is also contained in our press release. Before we begin, I want to remind you that any statements during this call, other than statements of historical fact, are forward-looking statements subject to known and unknown risks and uncertainties that might cause actual results to differ materially from those expressed or implied by such statements. Forward-looking statements include statements regarding our anticipated revenues and expenses for 2016 and beyond, the anticipated contributions of our sales organization, the cost, timing and results of preclinical and clinical trials, whether conducted by us or by independent investigators, the clinical attributes and advancement of our selective cortisol modulators, including CORT125134, CORT118335, CORT125281 and CORT122928, the protections afforded by Korlym's orphan drug designation for Cushing's syndrome or our other intellectual property rights, including the composition of matter patents covering our selective cortisol modulators and patents concerning the use of cortisol modulators to treat triple negative breast cancer, castration-resistant prostate cancer and other indications. These and other risks are set forth in our SEC filings, which are available at our website, or from the SEC's website. We…

Thank you Charlie and thank you all for joining us. I'll begin by reviewing the third quarter results of our Cushing’s syndrome franchise and then briefly discuss the development of our cortisol modulation platform. Our first product of cortisol modulator Korlym treats patients with endogenous Cushing’s syndrome, a serious disease caused by a tumor that produces either excess cortisol or ACTH, a hormone that causes the body to produce cortisol. It is a serious, sometimes lethal disorder. There are about 20,000 patients diagnosed with Cushing's syndrome in the United States, approximately half of whom have been cured by surgery. The rest are candidates for treatment with Korlym. Our Cushing's syndrome franchise has delivered another strong quarter. Revenue grew to $21.7 million, 64% more than in the third quarter of last year. We have increased our estimate of 2016 revenues to between $79 million and $82 million. As I’ve said on prior calls, we see no leveling off in this growth. There are many physicians who have not yet prescribed Korlym and there are many patients who could benefit from the medication, but have yet to receive it. As I’ve also noted on prior calls, our Cushing’s syndrome business continues to fund all of the company's activities, including our advancing development programs. In the third quarter, we earned a GAAP profit of $2.6 million. Excluding non-cash expenses, our profit on a non-GAAP basis was $4.9 million. Our cash balance rose as it has for the last five quarters. As Charlie mentioned, we do not need to raise funds or finance our current or planned activity to finance our current or planned activities. In a nutshell, we performed well in the third quarter for the same reason we performed well in the second quarter. The clinical specialists we hired mid-year last year…

Thank you. [Operator Instructions] And our first question comes from Roy Buchanan. Roy, go ahead.

Hi. Thanks for taking the question. I just had a really quick one I guess on protecting the Cushing’s franchise and Joe, you kind of, I think, alluded to this at the end, but do you think 125134 is going to be sufficient to protect that? Korlym’s orphan exclusivity runs down in 2019, do you plan to extend that lifespan, can you envision a scenario where Korlym might be the better drug in Cushing versus the 125134, I know 125134 needs to be proven, but maybe just theorize on that? Thanks.

Sure, Roy. Thank you for the question. I just really want to sort of broaden it, because I obviously, Roy, you know the story well, but I want to make sure all of our audience does. I think really important characteristics of our commercial program with Korlym include that it’s not just the pill that we provide, it’s not just the tablet we provide. We provide an extensive amount of support and we’ve spent a lot of time frankly with trial and error, really figuring out how to make that work well. Patients who sign up for what we call our SPARK program, who enroll in that and consent to it and that's really, most of the patients are put in regular contact at Corcept with nurses who we have here and payment specialists to really make sure their entire care is taken care of. Remember this is a chronically used drug and for patients to really get the optimum benefit which is very important. They really have to have their needs dealt with on an ongoing basis and often for a very long period of time. The second thing to really understand is that although the orphan indication for this drug doesn't back run out in 2019, we have intellectual property and our developing more intellectual property which I think highlight important characteristics of the use of the drug around things like how it's to be administered, how it's to be distributed and so forth, which I think actually are very important pieces of intellectual property which potentially extend the drugs exclusivity. But as you said and I really want to return to it by far the most important thing is that I think the CORT125134 now entering phase 2 is because of its lack of progesterone receptor antagonists…

And then a question, let's review that and quantify this, but do you have a sense of - do you have more patients by finding a physician who has patients and they don't maybe know what the patient has and discovered that they have Cushing or there are more patients coming on where the patient discovers that this drug is available through whatever means that make sense.

Not sure exactly I know what you mean but I think we actually - I think that in many cases we have right now been treating patients who are already know to have Cushing's syndrome and their doctor has come to learn about our medications from a variety of different places and the doctor has treated. I think an interesting point that you're making though and it is an important one I think for many years to come because I think that as a viable medication like Korlym exist in the market there are more and more patients who are being screened for Cushing’s syndrome who openly I think can get to treatment.

And our next question comes from Christopher James. Go ahead. Chris, are you on the line? Chris your phone might be muted. And our next question comes from Charles Duncan. Charles, go ahead.

First of all congrats on a good quarter and for managing the issues around the August timeframe of last year. I have a couple of questions, one is on the second generation compound in terms of the study in Cushing’s disease, which is ongoing, what do anticipate to be the key point of value creation with regard to derisking and being able to compare that drug to Korlym, would it be the ongoing Phase 2 or would you have to wait until you get exposure out of Phase 3 to be able to really believe that you derisk that program?

Well first, Charles, thanks for calling in and I can hear you loud and clear. I think I understand your question. It’s interesting, as you know I've been involved with drug development for quite a while at this point and I think that in many cases you really do have to see a definitive Phase 3 result before you can say for certain whether a drug works or not. And that's a portion of every program but I think what makes this program a little bit different is that really even starting from Phase 1 we could see this the pharmacodynamic effects of CORT125134 in human subjects as you would remember, Charles, we actually were able to give people prednisone which is essentially a synthetic cortisol and see if we can reverse its effects and Korlym of course does that and CORT125134 does that equally well. So we think we're in an unusual situation where I believe that if you know successful Phase 2 study. I think is really going to prove the concept in a very serious way and at that point in time and of course fingers crossed for ultimate results and sides and so forth. I think the point really will have been proven that this is in effect of cortisol modulator. I think we can already state that it does not - this drug does not antagonize the progesterone receptor and that portion is taken care of. So hopefully if our dose finding gets us to the right place, unlike most development programs we will have largely proved our concept of at the end of Phase 2

That’s helpful kind of consistent with what we had anticipated as well. The other question I had is on Korlym specifically, what do you see as the biggest driver to growth in the quarter and it is possible that you would see that continue over the next year or so in terms of driving your guidance. Thanks.

Thanks, Charles. I'm going to reintroduce you and our group to Sean Maduck who is our Senior Vice President, who runs all our commercial area I think we can - he just came in the room from his hard work on our commercial business and I think we can answer that question well.

Charles thanks for the question. We've talked over the last few quarters of how we work to expand our field force and bring in top quality talent and then of course train them appropriately to be as effective as quickly as possible in the field. We on the last call announced that we had gone from 25 to 30 clinical specialists and that we expanded this quarter actually to two more. So we have 32 clinical specialists and we have five regions in place as well as a national sales sector in place that are really all helping to drive performance. I mean ultimately all of our clinical specialists are becoming more productive and more quickly in the field are engaging in lots of great conversations with physicians which is driving of more patients being diagnosed and then more patients being on product. Ultimately in terms of his growth continuing on I mean over the last many quarters we've seen new physicians and new multi-prescribers being added consistently quarter upon quarter, we have not seen a plateau of that. And as Joe announced in the notes at the beginning of the call, I mean ultimately we believe there are many physicians who have yet to prescribe Korlym and many patients who will be eligible to receive it. So we do believe that this growth will continue into the future.

And really, Charles, I just want to kind of underscore that, we have both many new prescribers each quarter and we actually have many multiple prescribers who are single prescribers in the past, so the growth actually comes from both of those areas.

A good high quality growth, Sarah is on the line, I’m wondering if she had any additional questions and I appreciate you taking my questions.

I just had one more specific question about the dosing paradigm you're using in the Phase 2 study and 134 in Cushing’s. And if you could explain what the two different dosing arms and dose escalation paradigm it's designed to demonstrate? Thanks.

Sure. Sarah thanks very much for the question. I'd like to again introduce our group to Bob Fishman who is our Chief Medical Officer, who I think can answer that question quite succinctly. Thanks.

Sure. Thanks very much for the question. So just as a reminder this is - it's a Phase 2 open label study and we're examining six dose levels and the way we are doing that is that we have low and high dose groups with 15 patients per group and each patient gets to escalate twice during a 12-week treatment period. So therefore we will see the - we expect to see or our set up to detect a whole range of effects across the six dose levels. And beyond that we’ll hopefully be able to see the effects of dose escalation within individual patients, so we expect it to result in a very rich data set.

Thanks Sarah, next question.

And our next question comes from Chris James. Chris, go ahead.

Can you hear me now?

Yes, can hear you well.

Thanks, sorry for the technical difficulties. So just I guess most of them have been answered at this point but just on 125281, Joe, what gives you - so what are the properties that give you confidence that this could be used in combination with enzalutamide in prostate, in castration resistant of prostate cancer. What are you seeing specifically that versus 125134 or even Korlym or mifepristone rather.

Chris, I'm very glad to answer questions but just let me provide a little context for my answer. I think most of you and you Chris follow the company for a long period of time, know it was a real mission for us to see frankly that we could come up Korlym with our progesterone receptor antagonist I mean that was actually a real medicinal chemistry feat and we were very proud to have done it but what was very interesting about that is we began to test the next generation of compounds in a lab, first in cell culture and then in animal models, really prove that these compounds were not identical. As I've mentioned before in previous calls some were better at for instance creating insulin sensitivity. Some were better at creating weight loss, some got into the brain, some didn't get into the brain and we started to test them in the oncologic models, some were more potent than Mifepristone and some were less potent. That’s a long scientific explanation I think we have a pretty good handle on why that's happening but just take it as a given that that is in fact the case and it turns out that CORT125281 is particularly potent in the animal model of castration resistant prostate cancer. In fact we've now replicated that several times now. In truth you - the initial tests are actually with actual castration which is something which is more palatable I think for a rodent than it is for a person but ultimately I think we think it's a good representation of what's going to happen with enzalutamide and that actual animal testing is going on right now. So it's simply an empirical result Chris, it was not something we necessarily would have predicted beforehand but as we run all of our compounds to these various models, 125281 was a real standout in a castration resistant prostate cancer model.

And our next question comes from Alan Leong, Alan go ahead.

I have a question from a little bit different area. You have a number of important clinical trials coming from and preclinical trials coming from independent investigators especially in alcohol withdrawal, metabolic disease like you’ve already outlined in cancer. And we have patient and waiting and almost seems like there is a bullish of trial completions on your results due to come in during the near term. Could you present a broad brush of what these trials look like and generally ballpark around their arrival?

Yeah, Alan, thank you for your question, it really gives me an opportunity to talk about one of the things that I'm most proud of at Corcept, which is a different tack we've taken for a very long time. At the beginning of Corcept, we had more ideas than money but we thought this was a very important platform cortisol modulation in that it really might be appropriate to study it in many, many different disease states. So we took it, we really took a position I think somewhat different than many pharmaceutical companies that we would really collaborate extensively with academic researchers. At any given point in time, we probably have thirty different academic collaborations both in the United States and abroad to test cortisol modulation platform in a wide range of diseases ranging as you know you point out from psychiatric diseases like post-traumatic stress disorder or alcohol abuse to metabolic disorders like fatty liver disease even to an ophthalmologic disorder called central serous retinopathy. And you were also correct that these are investigator who run studies where we have donated our medication and our expertise for whatever that's worth but highly motivated academic investigators are really working on this project. And you're also correct that some of these important studies are now coming to a conclusion now. Again, I always have to give the caveat these are studies which are not in our hands and so we're a little bit at arm's length as to exactly when they will conclude. But just as an example, the post-traumatic stress disorder which is being run by the VA System led with investigators at the Bronx VA has now completed its enrolment and we expect to actually have results of that study within the next six months. So that's a…

And our next question comes from Tazeen Ahmad. Tazeen you may begin.

Hi, guys this is Peter on for Tazeen, congrats on a good quarter and thanks to my question. So you indicated for 125134, you fully expect the Phase 3 trial. Does not mean that there's potential for the Phase 2 being a pivotal trial and what kind of results would you expect from the Phase 2 that might expedite an approval process. Thank you.

I think, as I said I don't want to repeat my answer in full before but this is a clinical program where cross our fingers we have a high degree of confidence that this drug works the way we think it works. On the other hand, unlike when we brought Korlym forward when there was no drug approved for Cushing's syndrome we actually now have quite an effective drug available for Cushing’s syndrome. Now, of course as I talked about Korlym does have progesterone antagonist and it does have the notoriety as the abortion pill and I think that CORT125134, again fingers crossed is going to prove to be a significant advance beyond Korlym. On the other hand, I don't want any investors counting on sort of the minimal program to approval, although of course we will make our best case to the FDA. So I think you just have to sort of keep both of those things in mind at the same time is that we think this drug has great promise but we don't want anyone to really get ahead of their ourselves because we think that the fact that Korlym is in the market and works so well, it gives in some sense reduces the need for an immediate approval and so we'll just have to play that as it goes along.

Well, thank you.

Well thank you very much for all of your questions and really look forward to talking to you next quarter and really hope the rest of the year is very productive for you. Thanks.

Thank you ladies and gentlemen this concludes today's conference. Thank you for participating and you may now disconnect.