Good afternoon, ladies and gentlemen, and welcome to Corcept Therapeutics Conference Call. At this time all participants are in a listen-only mode. Later, we will conduct a question-and-answer session. Thank you. I would now like to turn the conference over to your host today, Mr. Atabak Mokari, Chief Financial Officer. Sir, the floor is yours.

Thank you. Good afternoon and thank you for joining us. I'm Atabak Mokari, Corcept's Chief Financial Officer. Today, we issued a press release announcing our financial results for the 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 risks and uncertainties include, but are not limited to, our ability to operate our business and achieve our goals and conduct our clinical trials during the COVID-19 pandemic and to generate sufficient revenue to fund our commercial operations and ongoing programs; the availability of competing treatments, including generic versions of Korlym; our ability to obtain acceptable prices or adequate insurance coverage and reimbursement performance; risks related to the development of our product candidates, including their clinical attributes, regulatory approvals, mandates, and oversight and other requirements; and the scope and protective power of our intellectual property. 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 the safety, efficacy and other clinical and commercial attributes of relacorilant, exicorilant, miricorilant, CORT 113176 and our other selective cortisol modulators for the treatment of patients with solid tumors, liver disease, hypercortisolism, antipsychotic-induced weight gain, amyotrophic lateral scoliosis, or ALS, and other disorders; the progress, enrollment, timing, design and results of our clinical trials; our revenue guidance,…

Thanks, Atabak. In March 2018, we sued Teva in Federal District Court to prevent it from marketing a generic version of Korlym in violation of our patents. Trial was originally scheduled to start in February of this year, although that date was vacated by the court. A new trial date has not been set. In April, the court granted us permission to file for summary judgment regarding Teva's infringement of our 214 patent. Teva responded by filing its own summary judgment motion with respect to the same pattern. Summary judgment is a procedure whereby court can decide a case without holding a trial. We believe the court has all it needs with respect to the 214 patent to decide the case in our favor. Having lost its action before the PTAB, which I will talk about more in a minute, Teva can no longer challenge the 214 patent validity in the district court case, Teva can only argue that its proposed product would not infringe, a position, we believe, has no legal or factual support. If the court grants our motion, we will have won the case. Teva would be banned from marketing generic Korlym until 2037 when the 214 patent expires. If the court rules in Teva's favor, we will proceed trial sometime next year. There is, at present, no timetable for the court summary judgment ruling, no trial date and no schedule for any trial-related activities. In parallel with the District Court action, Teva petitioned the Federal Circuit Court of Appeals to reverse its PTAB loss, which I referred to earlier, a request, we believe, has no merit. Briefing is complete and the court heard oral argument on October 5. We expect a decision in the next quarter or 2. On March 12, we sued another ANDA filer, Hikma Pharmaceuticals, in the same Federal District Court that is adjudicating our case against Teva. In the Hikma case, the court has set a fact discovery deadline of July 1, 2022, next year. Nothing is scheduled after that. With respect to both Teva and Hikma, we are confident in the strength of our lease position. I'll now turn the call over to Dr. Joseph Belanoff, our Chief Executive Officer. Joe?

Thank you, Charlie. The strong growth of our commercial business in the third quarter reflects the continued easing of COVID-related public health restrictions. This has enabled physicians to see their patients more frequently, improving their ability to diagnose and treat patients with Cushing's Syndrome. The business translation of more patients benefiting from Korlym treatment is a new record high in our quarterly revenue. We expect our growth to continue as pandemic conditions recede. Leading endocrinologists increasingly believe that there are substantially more patients with Cushing's Syndrome that was once assumed. For many of these patients, Korlym is an excellent treatment. We remain very optimistic about the future of our Cushing's Syndrome business because it is built on a strong foundation, an effective life-saving medication promoted by a dedicated commercial team that puts the interest of patients first. Our clinical development programs are another cause for optimism. We have created a library of more than 1,000 proprietary cortisol modulators, many of which are attractive candidates for development. Like Korlym, these compounds bind strongly to the glucocorticoid receptor, or GR. Unlike Korlym, they have no affinity for the progesterone receptor and so no cost on Korlym's most serious off-target effects. Beyond sharing the qualities of strong cortisol modulation and not perturbing the progesterone receptor, preclinical and clinical testing has shown that our molecules behave differently from one another in important ways. Some cross the blood-brain barrier, others do not. Some perform bested models of solid tumors. Others are more potent in models of metabolic disease. Some appear to be tissue specific, while others have more global effects. These diverse qualities have allowed us to initiate clinical trials by variety of disorders including ovarian, adrenal and prostate cancer, antipsychotic-induced weight gain, nonalcoholics steatohepatitis, or NASH, and, of course, Cushing's syndrome. We are also…

Your first question is from Chris Howerton of Jefferies. Your line is open.

Excellent. Thank you very much for taking the questions. And I would agree, a lot going on, Joe, and an exciting time for the Company. So two questions, I suppose for me. One would be, as you're kind of seeing the haze from the pandemic clearing and, obviously, the acceleration as you indicated, what do you think are going to be the key drivers for the commercial business in Cushing's next year? Any thoughts on things like sales projection, guidance or what the key drivers are that you guys are looking forward to from a commercial perspective next year? The second question that I would have is that like how do you anticipate the overall survival data from the ovarian cancer cohort? I think it's from the Phase II. How will that impact the ultimate design? And do you believe there's still any opportunity for an accelerated approval using an alternative end point outside of OS?

Thanks, Chris. I think we got both of those questions. And to save my voice a little bit, I'm going to pass you over to the Head of our Commercial Group, our Chief Commercial Officer, Sean Maduck, to answer the first question.

Chris, thanks for the questions. In terms of 2022, we expect that growth will continue. We do not provide guidance at this time, and we'll provide guidance early next year for our '22 numbers. In terms of what the drivers of growth will be, stepping back a little bit, Joe talked about the pandemic sort of lifting. And what we know is that physician visits matter, right, for both patients and our clinical specialists. And during the pandemic, those all went to zero. At the beginning of this year and sort of increasingly throughout the year, as restrictions have eased, things have opened up and patients have gone back to see their physicians, and we've been able to actually interact with physicians. And as a result, we see more patients being prescribed Korlym. So things have started to return to normal, and we're optimistic that, that improvement is going to continue. But I just want to state, we're not there yet. We're partway there. We're not there yet. The reality is that some things may never return to how they were pre-pandemic. So in terms of next year, one thing we've done very diligently, methodically over time, is look at sort of our sales force and potentially increasing the size, if we believe there's opportunity to get to more physicians. And we started with 15 at launch. We're at 50 today. And we're planning to get to around 60 by next year. And just to be clear, it takes time to find the right territory. That makes sense. It takes time to find the right talent. And then it takes time to get that clinical specialist trained up to a place where they could be effective in the field. So I wouldn't expect the extra 10 heads to start providing value early next year. But throughout the year, we'd expect to see some ramp up from that. So I mean, really, we're continuing to explore ways that we can continue to educate on disease education and on Korlym and reach as many physicians as we possibly can. And just to sum it up. I mean we have more prescribing physicians than we've ever had, and we've got more patients on Korlym than we've ever had. So we expect to continue that trend into next year.

And I'd like to now introduce all of you to Bill Guyer. Bill is our Chief Development Officer who recently had a long and successful career at Gilead. And I'd like to have him answer the question, your second question, Chris, related to our ovarian cancer study.

Great. Thank you. Thank you, Joe, and thank you for that question. So while your question was around OS, I do want to kind of bring you back to the beginning of the trial. With our Phase II study, we met our primary end point. And we're very excited that we met our primary end point because we saw statistical significant improvements in progression-free survival and duration of response by approximately two months. And the good thing is, for that Phase II study, we saw overall results that were very strong, and we didn't have to look at subgroups to see a response for relacorilant plus nab-paclitaxel. So I think that's a very positive piece. And after the presentation that Joe mentioned at ESMO, we've had many conversations with gynecological experts around the world, and they're just as excited with those primary results from our Phase II study. Based upon those results, we are active in planning with meeting with the FDA, and we'll talk about the most relevant information to come away with, an optimal design for our path forward. When it comes to OS, we're evaluating OS. And at the time when we did the first data cut, we had 63% of OS events. And at that time, we saw a trend towards an improvement of about 2.5 months. And I think that's also very positive. But yet, the good thing is that women are living longer in this trial, and that's the ultimate goal of hopefully what we can achieve with relacorilant plus nab-paclitaxel. We will report next analysis when we hit that final data cut of 120 events. We are actively planning for a Phase III study, and we plan to move forward, and we're working with a leading organization called GOG, which is the Gynecological Oncology Group. And as we work with them, they're very excited about the results as well and are actively working with us to help guide us for a path forward related to our Phase III study or any other path forward with the FDA.

Thank you, Bill. And Chris, I know on sort of the import of your question. And look, I think everyone should, again, I said before, I've said it in previous calls that your expectation should be a Phase III study. It's certainly our expectation. We're setting up to do that. But data will come along over the next new months, and we will have conversations with the FDA and go from there, of course, alert you as soon as things are settled at.

Okay. All right. Well, nice to meet you, Bill. And thanks so much for answering the questions.

Thanks, Chris.

Your next question is from Matt Kaplan of Ladenburg Thalmann. Your line is open.

Hi, thanks for taking the question and congrats on the strong quarterly results. Just wanted to, I guess, in your development programs, you mentioned ALS and your plans for 113176. Can you give us a little bit of detail in terms of the mechanism of action and why you think this molecule could play a role in ALS?

Yes. Matt, let me take that question because, again, to provide a little bit of context, one of the things that, really from the beginning of Corcept, we do a little bit differently than other pharmaceutical companies is we have always had extensive academic collaborations really throughout the world, half in the United States, half outside of the United States, half preclinical, half clinical. And frankly, it was the only way I thought we could get to the really broad platform of cortisol modulation. And just before I answer your question about ALS, everyone should understand that the initial data for the oncology programs that we have came out of a long-term collaboration with the University of Chicago. The programs that we have in metabolic disease, particularly in NASH, came out of long-term collaboration that we have with the University of Lyden in the Netherlands. And what it really provided for us was a great arms system. Not all research works out, but when it does work out, we're able to move it back in-house and make it go much more quickly. And one of our collaborating researchers is actually in Buenos Aires, in Argentina, a long-term ALS investigator. And fortunately, as I know you know, Matt, there really hasn't been much success in ALS ever. But in any event, in working with sort of standard animal models in ALS, he really was able to show that horizon modulation and specifically he has ideas of really where it's working in the brain. And these animal models not just slowed the deterioration of ALS but at least, in the period from which he studied the animals, actually improved things, actually clinically improved the animals and also, from a pathological point of view, increased their muscle fiber strength and muscle function. So it's a very intriguing finding. Now ALS is like Mount Everest, I mean that is not an easy mountain to climb. It's a dire need. Many companies have tried to work on it. And all I can really tell you at this point is that the best evidence for the success are the successful animal testing, which have now been repeated several times. And as we like to send you the articles where you can find themselves have now all been published in peer-reviewed journals. So we'll see. What I can tell you is that there's a group of investigators who are very interested in this mechanism. We're very interested in taking it forward. We're very excited to give it a try. It's a difficult area to work in. But wouldn't it be cool if we can actually provide some help for these patients?

Sure. That's helpful. And then secondly, in terms of the castrate-resistant prostate cancer program, what are the next steps after you select the optimal dose? Is that movement into Phase III?

I think it's actually moving into Phase II. I think that really at that point -- this is really a Phase Ib study. I just want to remind, again, Matt, you may know this, but the whole audience, that it's a really intriguing idea. It has very good science behind it out of great places. And it basically is, as I said before, it's blocking a critical escape pathway for men who are receiving androgen modulation but is no longer effective. So that's the concept. The other practical point I want to remind everyone is that we are running a study with exicorilant which is one of our cortisol modulators. The University of Chicago is actually running a very similar study with relacorilant. And we expect that both of these to approach kind of their dose finding finish line about the same time towards the end of the year. And then we will make a selection as to which of those compounds will bring forward into Phase II.

Great. That's helpful. And then last question in terms of Korlym. You had great success in third quarter. What are you seeing in the fourth quarter early on here in terms of -- are you seeing continuing of that momentum in terms of new patient adds and starts?

Yes. We don't comment on quarters in progress. But we see -- I think a little case saying to you, we see no diminution of the trend we had previously seen.

Your next question is from Tazeen Ahmad of Bank of America. Your line is open.

Hi, good afternoon guys. Thanks for taking my questions. A couple on Korlym, if I could. Can you give us a little bit more detail about what the contribution of price and volume were to growth this quarter?

Yes. So, I mean -- so we took a 5% price increase in March 1 of last year or beginning of this year.

From a year-on-year growth perspective, around 60% of the growth was due to volume and 40% due to price.

And I guess, as this year has progressed, has that contribution from volume increased despite the COVID headwinds?

Yes.

Yes. Tazeen, as Sean mentioned earlier, we now have more patients taking Korlym that have ever taken it and more physicians prescribing.

Okay. And if -- I guess, we can move on to ovarian cancer. For your trial design for Phase III, are you expecting that you will only have to do one Phase III study? Or would there be a need for 2? And did you have an official end of Phase II meeting with FDA before designing the study as it stands now?

Well, thanks for that question. This is Bill Guyer. So we're actively planning to meet with the FDA. And when we have all the information to have that discussion, we will within the next few months, as I think Joe said. At this time, we're planning on a Phase III trial. That's looking at the intermittent dose because that's where we saw the most successful dose of relacorilant plus nab-paclitaxel. We plan on doing a controlled study, and that's a controlled study, versus an investigator choice of treatment. While that study will be larger than our Phase II study, we basically just want to replicate the great results we saw in Phase II where we saw statistically significant improvements in PFS as well as DOR, duration of response. And so we're going to actively work, as I said earlier, with a leading organization here in the United States that has a global connection. It's called the GOG, the Gynecological Oncology Group, and they're collectively just as excited as we are, if not actually sometimes more excited than we are, to progress this study forward and also help us with the FDA and other regulators.

And so I'm just going to sum up because it was in there, Tazeen. Our expectation is a single study.

Right. Because I was assuming that because of the undermet need, that should be sufficient. So thanks for confirming.

Your next question is from the line of Arthur He of H.C. Wainwright. Your line is open.

This is Arthur for RK. Thanks for taking my question. So I guess I want to touch on the NASH Phase I study for the miricorilant. Could you guys give us more color on the study design and as well as the patient inclusion criteria? And when could we expect initial data from that study?

Yes. Great question. And as I answer that question, let me just back you up a little bit because patients with NASH have lived with that disease and progressed over a decade. They typically start with nonalcoholic fatty liver disease and then progress to NASH where they have fibrosis and sometimes progress to cirrhosis. And the goal is to reverse that liver fat accumulation and reverse fibrosis over time. And it's common in NASH development programs to achieve those goals over the course of the year. And in our Phase II study, and again, I'll get to your answer on Phase Ib, but I've got to remind you of the Phase II study that Joe had talked about, what we saw really was with miricorilant unprecedented results for fat loss. When we looked at miricorilant 600 milligrams and/or 900 milligrams, we saw reductions in liver fat for 40% to as much as 75%. We actually saw one patient have complete resolution of liver fat in just four weeks. And that resulted, though, unfortunately, with a consequential rise in ALT and AST. And so as we look at those end points, we're trying to now design that Phase Ib study, which we have done so, and it has started and we're actively recruiting that study. And that Phase Ib study is going to have four different cohorts looking at lower doses of miricorilant, starting at 150 milligrams, 300 milligrams and 450 milligrams as well as a dose escalation scheme is one of the cohorts, starting at 150 milligrams and up to a maximum dose of 600 milligrams. And each cohort is gated by an evaluation of safety and efficacy every four weeks and will continue up to 16 weeks. This is an open-label trial. So we'll look at the safety and efficacy results as they come in for each cohort, and we'll plan accordingly as we interpret those results.

So I just wonder, so for the end point evaluation, are you guys planning to use the image there? Or is there any biopsy involved for the NASH study?

No biopsy is involved in this study. We're using MRI-PDFF, which is an MRI version to look at liver fat than. And that's what we did in the Phase II study as well.

And we could expect the initial data for next year, probably?

As I said, we're going to be looking at the data for each cohort. And there's four week dates. And so we'll be looking at that data as it comes along. It's basically a six-month trial. But internally, of course, we'll be seeing the data as it comes in on a regular basis.

Okay. And my next question is regarding the capital allocation. So with almost $0.5 billion cash on hand, besides the internal pipeline development, are you guys contemplating any business development target? Just curious.

Arthur, it's Atabak. Thanks for the question. We are cognizant of our large cash position and regularly evaluate our capital allocation alternatives but have nothing new or no updates to report at this time.

Yes, just to underscore that, though, yes, we really are aware of how successful the business has shown to run has been. We're continuing evaluating where we'd like to put the cash we don't need for our clinical programs. Obviously, that's the first priority. So it is an active topic really at all points. And should we have updates, you will be right on the list now. So thank you, Arthur. Thanks for the question.

Your next question is from Alan Leong of BioWatch. Your line is open.

Thank for taking my questions. Joe, Charlie, Atabak and Sean, good to hear from you, and Bill pleased to make your acquaintance. Congratulations on the quarter. I want to refer back to something that was mentioned earlier. More patients have Cushing's than previously thought. I wonder if I can have some color on this. This reflecting more the severe patients, the classic case of patients are -- is it the endocrinologists are beginning to lump in less severe cases?

Yes. Thanks, Alan. This is Sean. I'll answer that. And Joe, please add any color that you'd like to. But I want to talk a little bit about sort of the historical data around this disease. So the population data that is often referenced and has been around for many years suggests that the prevalent patient population is around 20,000 patients a year, half of whom are cured by surgery. I think something that's important though to note about that data, and you just touched on it, is that 70% of those patients have Cushing's disease. And for those that aren't as familiar with the illness, that's patients with disease of pituitary origin. What's happened really over time, and most recently, I would say in the last five-plus years, is there's really mounting evidence showing that there may be more patients with adrenal hypercortisolism than previously thought. And there really is a large amount of independent research and multiple publications, which we'd be happy to share, that support this. So, there's not 1 million hypercortisolism patients, I mean, this is still a rare disease. But could there be 30,000 or 40,000? Yes, I mean, it wouldn't surprise me if there were. And as education increases, physicians are screening more awareness is being raised, I think we'll see that evolve over time and there will be a better understanding of what this market really looks like.

I was going to say I suspect the GRADIENT trial is going to be key.

Yes. It's really, Alan, very nice to be able to do that. That is the first controlled study in patients with this specific form of Cushing's Syndrome. And we're able to do it in a standard kind of double the line fashion because many of these patients are not treated at all for their hypercortisolism at this point. They're just treated with seven different medications for seven different symptoms. So I'm really looking forward to add that to the scientific literature and hopefully be helpful in clinical care very quickly.

I got a couple more questions, but they tend to be more philosophical. I want to follow up on Matt Kaplan's question on CORT 113176. So really on how your portfolio maybe apply to CNS and muscular diseases because I'm watching this and cortisol dysregulation and metabolic poles are prominent in these patients. And I'd like to see the drug to be successful with CNS mechanism, but it's still Mount Everest, but I look at your drug, and if all we do is help mitigate their metabolic problems, that's still huge. So I don't know if you have a color on that.

I can give you the four-hour version of that, but I'll shorten it up for you. Look, as you know, Alan, I'm a psychiatrist by training, I think the brain is the most sensitive organ in the body to hormonal dysregulation, specifically cortisol dysregulation. But historically, psychiatric and neurologic studies have been among the most difficult to do. And as you know, many large companies have founded in that area and programs have been cut and so on and so forth. And so I have a great intellectual interest in going in that area. I think there's tremendous need and possibility. I know as you know, there's a -- we have a study now in post-traumatic stress disorder that's being run by the VA. There's good animal data in another neurologic disease, in Huntington's disease. So I'm really hoping that in sort of the 5- to 10-year zone, we will really be back in a serious way into CNS disorders. It would really be wonderful to give some help to those patients. And cortisol modulation has lots of good reasons to give it a try. So sort of one thing at a time, we have a very full plate as it is. But I do think that over time, we will be feathering in CNS disorders as we have more information. So cross your fingers.

We do have a full benefit, and that's why I call it. And you can see the clinical pace quickening and the portfolio expanding, very interesting for a small company. And yet, you're opening up two new drugs to the clinic. Is this what you envisioned as a game plan, a growing clinical portfolio in say that even fatter than today? Do you still hopeful you can introduce a new drug roughly every year?

That really is the goal. And cortisol modulation is a very broad and important -- it just is a very important platform. And we don't want to overstep. We really think very hard about what we can actually get done. Yes, I really do think that's a fair statement of our goal, which is to add a compound a year and if the evidence is there for it to add a disorder a year. I can't promise that that's going to be the case. We'll follow the evidence where it goes. But I think that we're really on to something. I think the cortisol modulation is a big area, and we're first.

I hope it comes true. You're kind of interesting. It's an interesting situation being such a small company, trying to create and execute a large portfolio. Good luck.

Yes. And we're not as small as we used to be, Alan, you can remember that, right? All right. Well, listen, I'm going to stop here. Great to talk to all of you. Obviously, as we have news, we will put it out. Otherwise, we'll talk to all of you next quarter. And hope you enjoy what's left of the fall and the early winter. Talk to you soon. Bye-bye. Thanks.

Thank you, speakers. Ladies and gentlemen, this concludes today's conference call. Thank you all for joining. You may now disconnect.