Welcome to the Corcept Therapeutics Conference Call. My name is Karen 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 will now turn the call over to Charlie Robb. Charlie, you may begin.

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 preliminary fourth quarter and full year 2016 financial results, our 2017 revenue guidance and the 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-K with the SEC. Today's call is being recorded. A replay will be available through February 13, at 888-843-7419 from the United States and 630-652-3042 internationally. The passcode will be 44112876. Before we begin, I want to remind you that any statements during this call, that are not 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 preliminary financial results for 2016 and our revenue guidance and expense estimates for 2017 and beyond. The anticipated contributions of our sales organization, the cost, timing and results of preclinical and clinical trials, whether conducted by us or independent investigators, including our Phase 2 trial of CORT125134 for Cushing's syndrome and our Phase 1/2 trial of CORT125134 to treat solid tumor cancers. The clinical attributes and advancement of our other selective cortisol modulators including CORT118335 and CORT125281, the protections afforded by Korlym's orphan designation for Cushing's syndrome and our other intellectual property rights including the composition of matter patents covering our selective cortisol modulators to 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…

Thank you, Charlie and thank you all for joining us. Corcept had a very good year in 2016. As Charlie mentioned, our revenue increased 62% to $81.3 million. We generated GAAP net income of $0.04 per share in the fourth quarter and $0.07 per share for the full year. Our cash balance increased by $11.1 million. These results are especially impressive because we produced them even as we advanced our existing clinical development programs and initiated new ones. We are confident that our Korlym revenue will keep pace with our increased development spending and it will be able to pay for our planned activities without needing to raise additional funds. As I've said on prior calls, we see no leveling off in our Cushing's syndrome business. We accepted revenue in 2017 between $115 million and $125 million. Before I touch on the reasons for our growth in 2016 and our positive outlook for 2017 and beyond, let me provide a bit of background. As many of you know, our first product, the cortisol modulator Korlym treats patients with endogenous Cushing's syndrome, a disease which is caused by a tumor that produces either excess cortisol or ACTH, a hormone that causes the body to produce cortisol. It is a serious disorder. Symptoms vary from patient to patient and include high blood sugar, diabetes, high blood pressure, upper body obesity, rounded base increase right around the neck, thinning arms and legs, severe fatigue and weak muscles. Irritability, anxiety, cognitive disturbances and depression are also common. Cushing's syndrome can affect any organ system in the body that can be lethal if not treated. 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.…

Thank you. [Operator Instructions] And we have our first question from Charles Duncan from Piper Jaffray.

Hi guys, first of all congratulations on a good year of progress, revenue growth and thanks for taking our question. I wanted to ask you a little bit about 2017 revenue guidance; it looks like some pretty interesting growth. And I'm wondering if you can provide a little bit of additional color on some of your assumptions regarding that topline growth, is it increased penetration across prescribers or within a prescriber base; any increases in price? Just provide us a little more information on the assumptions behind that guidance.

Yes, very glad to do it Charles and glad to have you on the phone. You know, really -- just -- I can sort of take you to the final statement first and then breakdown for you. We are seeing growth very much as we have seen it for the last years. We did see more doctors each month, more new prescribers and more multiple prescribers from doctors who have prescribed a single time. So -- and really, kind of every sense it's very similar to where the patients have come from before which is a variety of places. I think what's interesting about it and it's one of the things I alluded to in my presentation is we really are now starting to have physicians take a more careful look at seeing if there are patients with Cushing's syndrome who they previously passed over. We had several instances in the last year where doctor said, you know, I have been treating some with diabetes for 10 years and then I know they are complaint with medications, they are not getting better. I'm going to go back and see if they really have an issue related to Cushing's syndrome to hyper-cortisolism; and in several of those cases, nearly half of those cases that was found to be the case. And I think that as we were able to really explain that to other physicians, that sort of beginning of the funnel testing is taking place. But really the short answer to your question Charles, it's really the same growth factors since we've had previously, more doctors who are entering the prescriber base and physicians who have had good success with their first patients prescribing to more patients. As you know we did actually have a price increase at the beginning of the year about 9% gross, and that is of course in our estimates as well and our revenue estimate as well.

Okay, that's helpful Joe. And then I want to ask you a question about 124 but just kind of thinking about the answer you just gave. The gene -- the genetic test, FKBP5, seems like kind of a paradigm shift. It gives you something to offer to the physicians to measure and I guess I'm wondering if you have a sense for the current patients on Korlym, what percentage of them demonstrate that phenotype?

Well, I really do think and of course you know, fingers crossed and we're hopeful. I'm glad you said it, I really do think that this is a paradigm shift if it turns out to be successful. And I'll explain to everyone why that's the case. Right now the measures that we have for cortisol and actually very crude, the measures of cortisol circulating in the blood stream or what's left over in the year end or what's left over in the saliva; and frankly what's going on in your blood, urine or saliva is really irrelevant to the symptoms that you've developed with Cushing's syndrome; what really is important is the activity at the cellular level, and this if it proves to be successful is a very good measure of what's actually happening at the cellular level. So you know, we're really at the beginnings of our testing; we've described it there is actually very nice paper in Journal of Clinical Endocrinology and Metabolism, it really explains what happens when exogenous glucocorticoids like prednisone are given and as I talked about in my presentation, how those effects can be readily reversed by drugs like Korlym and CORT125134. So we're really hoping that if this is the case five years from now, people won't be talking about the crude measures that are currently being used and we'll be talking about the more accurate measures that really relate to cortisol activity as opposed to cortisol level, and I really do think that that will be a great tool in terms of both diagnosis of disease and in terms of optimally treating people. Now to answer your specific question, we're really just beginning that work right now to see if patients of Cushing's syndrome actually in fact have the elevation that we expect. And as I mentioned, that is part of the measures that we're looking at in CORT125134's Phase 2 study.

Okay. And then regarding the ongoing study with 134 in Cushing's syndrome, as you mentioned it's an open label study, so I'm not really going to pursue on how the study is going; if you have any perspective on that but more importantly, could you just remind us of the design -- isn't it the case that you dose -- you have a couple of doses that you're starting with and you titrated [ph] effect has very similar to what you saw with Korlym and therefore my conclusion would be that that I shouldn't read out positively but what's your thought on that?

Well, you are correct and let me again just get context for the whole audience. What we've really found with Korlym is that titrated to the correct dose, virtually every patient responds and we suspect that CORT125134 since it's similar mechanistically will also in fact require this titration to get to the optimal dose for each patient. Now remember, we've yet to treat a patient you know, before this trial with Cushing's syndrome with CORT125134, this is initial trial in patients. I'll come back to that in a second because I think we have more information than one usually does at this point but that is in fact the case, and so what the Phase 2 study is really testing is a variety of doses -- you know, basically ranges from -- you know, the first half 50, 100 and 150 milligrams; and then 200, 250 and 300 milligrams over a dose range that we actually think will provide efficacy but until we actually test those patients we won't know that for sure. I think the reason why we have -- I think that this trial has a significantly higher degree of technical success than most trials, including many trials I've worked on as we're really are able to get in Phase 1 pharmacodynamic results that indicated the CORT125134 was very similar to Korlym and as a consequence we really think we're on the right track in terms of where we're dosing the medication, but of course, we'll have to wait for these results to see it. I just want to use this just as an opportunity to point out that again CORT125134 is very similar in terms of its mechanistic action with cortisol but does not touch the progesterone receptor and as a consequence takes away really the tag of the abortion pill and progesterone -- the medical effects of progesterone antagonist.

Okay, I think that's it. Thanks for taking my questions. I'll hop back in the queue.

And our next question comes from Alan Leong from BioWatch News.

Thanks for taking my questions. Congratulations to both of you, Joe and Charlie, what a wonderful year. And also additional congratulations on costs and my thing is that you'll be able to have the FKBP5 test go forward. Couple of questions; you -- you know, you look at the next couple of years in number of cards are being turned over, so moreover you're starting to expand your clinical program and just wanted to have you -- if you could comment on [indiscernible] going forward, it's always -- you enable to increase earnings but now you will be increasing the clinical program to get more -- to gain from the next couple of years would be just keeping the task [ph] on neutral and expanding the program or will be becoming a more profitable enterprise?

Alan, you really raised a good point and I appreciate you bringing it up because I want to make sure that the whole audience really understands that. Our goal, although we were profitable this year and actually you know, have added cash every quarter, our real goal is to be cash flow breakeven. We have a vibrant growing development program and we're really fortunate that the rent for our Korlym revenues matches it well. We really think that what's going to make the ultimate success for the company and the most benefit for patients is several of the programs that I talked about today and others that they've come along as well really hitting and we can provide care to a much greater number of patients than we currently do today. So really the goal is to fund our development program, Shama Duke [ph] in the commercial area has done a tremendous job with the people working to do that. We're very pleased that the growth in Cushing's syndrome with Korlym but one other things I really want to mention is that a critical thing that I think we've done is prove that a substantial market exists in Cushing's syndrome that if you bring forward a medication which is -- as application is Korlym or as CORT125134 hopes to be; then the market for Cushing's syndrome is significantly bigger than I think people estimated it was at the beginning. How big it is only time will tell but I think one of the critical things we've done commercially is really to show that this is a market that people really do have to pay attention to economically, at the same time as our patients pay attention to it and get better. So I hope that answers your question; I wasn't positive, I hear 100% of what you said Alan, I hope that was on-track.

It was, it was. Our earnings estimate before years ago, what we have [indiscernible]. Another question on the cortisol modulation and Xtandi program, hopefully the plan at the checkpoint inhibitors and you talked about how cortisol in the bloodstream helps deduct the immune system and that the checkpoint inhibitor is working in conjunction. You know, even I discussed that the checkpoint inhibitors is a large section of people got [indiscernible] number of classifications that don't respond to -- what do you think [indiscernible] and what do you hope to accomplish and what you hope to see with your platform under cortisol and with the checkpoint inhibitors?

Yes, Alan, and again if I haven't heard you correctly, please let me know. But I think the point you're making, if I understood it correctly, it's a very important one. The checkpoint inhibitors are a wonderful new treatment, and certainly if you're Jimmy Carter [ph], you're very pleased that they came along when they did. But unfortunately, the response rate of the checkpoint inhibitors is not really all that high, maybe a quarter of the patients actually respond to them and I think that there is a tremendous amount of work going on right now to figure out a priority [ph] who they are going to be but I don't think that's really known at this point. I think the idea is that the immune suppression that exists when people have cancer, in fact what they are treated with different agents in cancer is actually low because cortisol levels and cortisol activity is high and I think the idea really is that if you used a checkpoint inhibitor in combination with a more general immune strengthener like a GR modulator, you might be able to get significantly higher response rate. Time will tell if that's true, we have some animal data that indicates that it is true but we're really just at the beginning of the process. I think the most heartening thing is that people really do now understand that the immune system is very important in the fight against cancer and cortisol frankly, is your primary immune hormone. So I think modulation of it makes a lot of sense and work is certainly beginning on that. We're among them.

Thanks. That's pretty clear.

[Operator Instructions].

Alright, it looks like we have wrapped up questions for today. As always, we're very, very glad to take any of your other questions offline but I want to thank you for listening to the call and look forward to talking to you next quarter.