Good day, and thank you for standing by. Welcome to the Corcept Therapeutics conference call. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to turn the conference over to your speaker for today, CFO, Atabak Mokari. Please go ahead.

Hello, everyone, and thank you for joining us. Today, we issued a press release announcing our financial results for the first 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 be materially different from those such statements express or imply. These forward-looking statements are described in today's press release, and the risks and uncertainties that may affect them are described in the press release and in our annual report on Form 10-K and our quarterly reports on Form 10-Q. Please refer to those documents for additional information. We disclaim any intention or duty to update forward-looking statements. Our revenue in the first quarter of 2024 was $146.8 million, an increase of 39% compared to the first quarter of the prior year. We expect our revenue growth to continue and have increased our 2024 revenue guidance to $620 million to $650 million. Net income was $27.8 million in the first quarter compared to $15.9 million in the first quarter of the prior year. Our cash and investments at March 31 was $451 million. I will now turn the call over to Charlie Robb, our Chief Business Officer. Charlie?

Thanks, Atabak. In March 2018, we sued Teva Pharmaceuticals to prevent it from marketing a generic version of Korlym in violation of our patents. The case was tried in Federal District Court in September of last year. On December 29 of last year, the court found that Teva's generic product would not infringe the 2 patents we had asserted against it. We believe the court's verdict is wrong and have asked the Federal Circuit Court of Appeals, which has appellate jurisdiction over all patent matters, to reverse it. We filed our opening brief on March 11. Teva filed its response to the brief on April 22. Our reply, which will complete briefing of the matter, is due later this month. These documents are available publicly at the government's PACER website. It's impossible to predict exactly how long the appeal will take. The timing of oral argument and the issuance of an opinion are entirely up to the Federal Circuit. Having said that, it's reasonable to expect oral argument in the third or fourth quarter of this year and the decision early in the first quarter of 2025. If we prevail, Teva would lose FDA approval of its product, at least until the expiration of our patents in 2037. We're here to advance this appeal. As has always been the case, we strongly believe that our position is the correct one. We are confident that the Federal Circuit, with its deep expertise in this area of the law, will agree. I'll now turn the call over to Joe Belanoff, our Chief Executive Officer. Joe?

Thank you, Charlie, and thank you, everyone, for joining us this afternoon. This has been a tremendously active period at Corcept. Our commercial business is thriving, and we are making substantial progress in every one of our development stage programs. In the past few weeks, we completed enrollment in 4 late-stage studies, and we released open-label data from our GRACE study that takes us one step closer to submitting our NDA and bringing relacorilant to patients with Cushing's syndrome. Our commercial growth was driven by a record number of new Korlym prescribers and a record number of patients receiving the medication. Hypercortisolism is commonly misdiagnosed, in large part, because its frequently expressed and burdensome symptoms, hyperglycemia and hypertension, have become so common in the population as a whole. As physicians become increasingly aware that hypercortisolism is much more prevalent than previously assumed, they are screening and treating more patients for hypercortisolism than ever before. When Korlym is prescribed, we use the expertise and infrastructure that we have developed and refined over many years to support physicians and patients. This additional care helps create a life-changing impact for patients who receive Korlym treatment. We have known for some time that there are large groups of patients who are far too infrequently screened for Cushing's syndrome. The initial findings of the CATALYST study make that clear. CATALYST is the largest and most rigorous clinical study ever conducted to examine the prevalence of hypercortisolism in patients with difficult to control type 2 diabetes. Over 1,000 patients were enrolled by the leading diabetologists in the United States, and 25% of these patients were found to have hypercortisolism. This is a far higher prevalence rate than is generally assumed with potentially far-reaching implications for patient care. The final results from the prevalence portion of the…

[Operator Instructions] Our first question comes from Matt Kaplan of Ladenburg.

Congrats on the quarterly results. Nice quarter. Just focusing on the quarter a little bit and Korlym. What are you seeing now that, I guess, the court has ruled that Teva doesn't infringe your patents? Have you seen Teva in the marketplace and any generic competition as of yet?

Yes. Let me reintroduce to the group Sean Maduck, who's the President of our endocrinology division, and Sean will take that question.

Yes. Thanks for the question, Matt. So as you know, Teva announced its launch on January 19. Our business is robust and continues to grow. To this point, we're not aware of losing any patients to generic mifepristone. And based on our analysis at this point, we believe a generic of Korlym has been available to some degree for a couple of months, but it hasn't had any impact on our business. And something I think that's important to just remind people of, and it's something I've said in the past, is that our situation is unique and not like most generic situations. We utilize one single-source pharmacy that is highly staffed to distribute Korlym and the other specialty products they have. And when Korlym is prescribed, both the physician and the patient receive a high level of support, both at intake and ongoing, from both the pharmacy and Corcept. And this is support that is tremendously valued by doctors and by patients. And for this reason, physicians who prescribe Korlym have a very strong brand preference.

Okay. That's really helpful. And just shifting to your pipeline and specifically the GRACE study. Given, I guess, the open-label results that you've announced, can you give us a sense on how those results in terms of the effect on hypertension in these patients and hyperglycemia compare with what you've seen historically with Korlym?

Sure, Matt. And again, I want to reintroduce Bill Guyer. Bill is our Chief Development Officer, runs all of these programs, and Bill will take that question.

Yes. Thanks, Matt. Thanks for that question. I mean overall, we're very excited about these results because we basically hit every endpoint across the broad range of the signs and symptoms of Cushing's syndrome. And these are positive results given how clinicians will have insight into how to use a drug like relacorilant. It's really tough to make comparisons between drugs when a drug like Korlym was launched 12 years ago with the SEISMIC study. But when I look at the results, I see the efficacy results as very similar or even better and the safety profile as better than that of Korlym based upon what we've seen. When we look at the overall efficacy, we're seeing comparable efficacy, but distinctly, we're seeing rapid and sustained improvement in hypertension as well as improvement in all the safety profiles because we really haven't seen any relacorilant-induced AEs like hypokalemia, endometrial hypertrophy, vaginal bleeding, adrenal insufficiency or QT prolongation. So overall, we think we've achieved our goal of coming up with a drug that can be approvable and can improve patient lives with Cushing's syndrome.

Okay. That's helpful. And then in terms of the upcoming results for the randomized withdrawal phase, given, I guess, the 63% response rate in the hypertension and the 50% in hyperglycemia, what should we be looking for in terms of the randomized withdrawal phase?

Bill?

So in the randomized withdrawal phase, as you've seen in our press release and you -- I would really point you to those patients who responded and went into the randomized withdrawal phase and you look at those graphs of the continuous decline in both hypertension and improvement in hyperglycemia endpoints. It's those patients who will then get randomized to either continue on relacorilant or get switched to placebo. And then we're going to look for a reversal of those endpoints. And so specifically for our primary endpoint of hypertension, we're looking for a loss of response of greater than 5 millimeters of mercury for either systolic and/or diastolic blood pressure. And then on glucose, the same things, we're looking for a reversal of the improvements in the oral glucose tolerance test and all its components and reversal of the changes in hemoglobin A1c.

And our next question is coming from David Amsellem of Piper Sandler.

So just a couple. First, just on Korlym and generics. Can you talk about how the market might evolve to the extent that Sun and Hikma enter the market perhaps later this year and how you're thinking about your response to heightened generic competition? For instance, could you even enter with an AG of your own? So just talk to that. And then secondly, clearly, there's some acceleration happening much more so than we've really seen for quite some time. So is it because of CATALYST? Is it because of just greater awareness of Cushing's just beyond what you're doing with CATALYST? Just help us better understand what's happening in the marketplace that's driving this.

Sure, David. And I'm going to give you over to Sean to answer that question.

Yes. So David, thank you for the question. I think I'll start with number 3 and talk a little bit of CATALYST. And I just want to make it clear that we have not yet seen the impact of CATALYST this year and that it is not built into our forecast. We believe that the CATALYST results are going to increase screening for some physicians today. But ultimately, data generation takes time to translate into guidelines, which then takes time to translate to just the medical practice. And ultimately, we expect the full impact of CATALYST will be felt in 2025 and the years after that. So in terms of what drove Q1, I mean, I'll reiterate something Joe said at the beginning of the call. We had more first-time prescribers, more prescriptions and more patients on Korlym than ever before. We've added new patients from existing physicians and new physicians throughout the country, and also, we're very pleased with the result. It's driven by improved field execution, which we've seen over the last few quarters. And the investments that we've made on the marketing side, we're starting to see some results from that. But another component, and you touched on it, is disease awareness is increasing. And we're more confident than ever about the potential size of the Cushing's syndrome market and that this is a multibillion-dollar market.

And David, the only other thing I would point out is we've seen this building now over the last 5 or 6 quarters. It really wasn't just particularly this quarter. And I would just second what Sean said, sort of the weight of evidence is now out there that this has been an underrecognized disorder. People should screen more for it. And when they screen it, they should figure out a way to treat it, and it's really organic in that way.

Right. So your next question was around sort of future market dynamics from a generic standpoint. And I'll just say I cannot speculate on when or if other generic manufacturers may understand that the legal process, as Charlie touched on, is still ongoing, and we don't expect it to be resolved until the early part of next year, which is a risk. And to our knowledge, no other generic manufacturer besides Teva has received FDA approval at this point. So what I'll say just from our standpoint, we've been thinking about this for a long time. We've had a plan for a long time. We've been prepared since at least 2020 for this. So we have a plan in place. We continue to revise that plan with any new intelligence that we get. We're continuing to invest in our Korlym business, and we're confident in our ability to both continue to grow our business today but also defend our market share.

Our next question will be coming from Xinwei An of Canaccord.

My questions are regarding the ALS program. So the first part of the question is on the primary endpoint, we know that it's using the ALS Functional Rating Scale, a numerical scoring system. So I would like to ask for your comments about what level of a change would be considered as a clinically meaningful change on that endpoint because, as we know, with the approved therapy, RADICAVA, its historical Phase III trial showed a drop of the score by approximately 2.5 points. And I believe that was considered as equivalent to 4 to 5 months of survival. And then the second part of my question is do you believe that dazucorilant would have a chance to be approved based on the Phase II data? Let's assume the data is positive.

Yes. And I'd like, again, to bring Bill on the line. Bill, could you please take those questions?

So in relation to your first question around our primary endpoint and efficacy, so yes, you're absolutely correct. The efficacy is the change from baseline at week 24 of the ALS Functional Rating Scale. But we're also -- we're looking at ALS and dazucorilant and overall effects of patients, and a long-term extension study is going to look at survival because it's a 3-year study. But for the specifics, we're powered at 80% to see a 2.4% difference in the ALS Functional Rating Scale, which the researchers, clinicians and ALS experts have advised us, as you stated, as being clinically relevant. As related to could this be a regulatory-enabling study, yes, we believe so at 249 patients. We designed this study from the very beginning to be a potential for regulatory enabling because ALS is a very devastating progressive disease, and the need for new medications is very high and even higher probably today. I believe that regulators would welcome new therapies that could help slow or reverse the progression of this disease. And again, DAZALS, the trial was designed specifically as a Phase IIb trial with the intention to be a regulatory-enabling study.

And the only thing I'd add to that is I think I don't have to really particularly remind everyone on the call what an awful disease ALS is and how there's really nothing available that works particularly well. It was we really saw excellent preclinical data. We'll find out if it translated. But yes, I think the study is of the size that if the effect is real and substantial, that has to be very interesting to regulators, who I know want to bring better treatments to that disease.

Okay. That's very, very helpful. And if I may, I also have a simple or straightforward question about relacorilant in GRACE. So for the randomized withdrawal phase data, that period of the trial is for 12 weeks. And I know we have asked about this before, but we don't have withdrawal data with relacorilant, but with Korlym. I think you stated before that the rebound was usually observed at 4 to 5 weeks after patients stopped using that. So I was wondering, into establishing the confidence that 12 weeks is long enough for us to see a difference, a statistically significant difference, besides the experience with Korlym, would there be something else that we could trace back to?

Yes. I understand the question. And it's a really very reasonable question, I want to make sure everyone on the line understands it, which is that is 12 weeks enough to see patients who were randomized placebo have a loss of their -- the very potent effect that they got in the open-label phase. So you raised a couple of points, and I want to address both of them. You're absolutely right, within Korlym, we see a rapid loss of efficacy. Sometimes you see it within the first 2 weeks, but you often see it by 4 or 5 weeks. So certainly, that's one reason why 12 weeks is a very reasonable guess for loss of efficacy. But we have even more evidence now, and when you look at the curves for GRACE for the rate of improvement, particularly in hypertension, you're seeing that rate of improvement in the first couple of weeks. And I suspect that this medicine doesn't just cure patients. When they come off the medicine, they have a loss of that effect. So you're right, we've never done a randomized withdrawal study before. We can't say with certainty that, that's enough time, but we have a very strong belief that it is, and we'll find out soon.

And the next question is coming from Swayampakula Ramakanth of H.C. Wainwright.

This is RK from HCW. In terms of commercialization, with you getting ready to file the NDA based on the GRACE data, we can kind of assure ourselves that the data probably is looking pretty good on the rest of the study that you're going for it. Having said that, let's say, in a year, we have this drug approved. So how are you thinking on the commercial front in terms of switching patients from Korlym to relacorilant? That's part A of the question. Part B is, again, looking at CATALYST data, which has been generated with Korlym, what's the strategy there? Because again, within a year, if you have relacorilant, do you need to do something with relacorilant as well if you need to grab that patient population? Or is this going to be a bifurcation of the market where you will let Korlym run through the diabetics and the hypertension folks but keep the relacorilant for the Cushing's?

RK, let's start off with Sean, and I may have a few comments to add at the end.

Yes. Thanks, RK. So the question in terms of switching, Korlym is obviously a great medication, but we believe relacorilant will be even better. Our belief is that relacorilant's efficacy and safety profile will be well received by treating physicians and once approved, uptake will be very swift. There's no reason both a physician and the patient wouldn't want to choose it.

So RK, look, the critical thing, and it's something that we say every time, and we say it internally and it's absolutely true, the main thing to understand is that hypercortisolism is an unrecognized disease in many patients who could be treated for hypercortisolism and get a lot of benefit. And that's whether they're treated with Korlym or not. I mean again, I remind everyone that really, the optimal first-line treatment is if there's a tumor that's causing this and you take it out, you take out the tumor, and that's that. Now we know, unfortunately, that is not the case with many of these patients. That surgical cure either doesn't work or they can't find a tumor or something like that, and that leaves them in need of medical treatment. And so the question -- I'll just emphasize what Sean said. Relacorilant is really a good medication. I really believe that it is a superior medication in a variety of ways to the very good effects that you get from Korlym. And I think that people will -- what they'll get from the CATALYST information is that they need to really screen for these patients. And then that's up to them what they ever do for it next. But I think that people will understand that what CATALYST is really proving to them is that hypercortisolism is in every single diabetology practice in the United States, and there are many patients these days who are getting optimal care for diabetes and still have another problem that isn't allowing it to be treated, namely hypercortisolism.

Fantastic. And then on the adrenal cancer study. And you said the data is expected from that in mid-2024, assuming it's one of the cancer conferences. So what's the thought process there? If we assume data is good, would you turn around and start a larger study right away? Or do you need to kind of look at the data from other oncology indications before deciding where you want to put your money [ and start ]?

Yes. RK, thank you for asking that question. I don't get that often. And so I'm just going to back up a little bit to make sure everybody understands the situation and why we're even testing this. Immunotherapy has changed the world, and it's fantastic. But unfortunately, it doesn't work for even a majority of patients. I mean for those whom it works, it's fantastic. But there are many patients unfortunately for whom it does not really work. What immunotherapy does is it relies on your own immune system to actually capture and defeat the cancer. And that's great, as I said, when it works. The issue is that cortisol is your natural immunosuppressant. And so mechanistically, it's fighting against the benefits that one gets with immunotherapy. The idea is that if you can normalize or reduce cortisol activity, immunotherapy can work significantly better. And it's not limited that this idea is right to adrenal cancer. Adrenal cancer is just a piece of a place where we can really gather some evidence. But the idea really is, if this direction proves correct, to really look at the whole body of cancers where immunotherapy is less than as potent as physicians think it could be. And all I can tell you is this is the first study we've done with this. We'll learn a lot from it. We'll figure out what to go next. We have a lot of other things on our plate, but this is really a crucial thing. If we've gotten it right, I think it could be very, very meaningful to many patients.

I'd like to add to that, Joe.

Bill has a comment.

Just to add to that, because while we're doing studies in ovarian cancer and prostate cancer and adrenal cancer, our vision really is to establish relacorilant as the agent that can really synergize with many different chemotherapy agents by adding efficacy, but not adding any toxicity. And we fully plan to explore broader applications of a drug like relacorilant in cancer throughout the life cycle management plan. It's been on our minds internally with the addition of our new President of oncology, Roberto. He and I have been partnered in looking at all the various different types of studies and where we should be investing our research dollars in. So you'll see a more broad plan in the coming months throughout this year.

And our final question today will be coming from Joon Lee of Truist.

This is Jeremy on for Joon. Congrats on the quarter. Just what incrementally changed from your initial guidance intro that led to the guidance range? And is generic impact baked into the guidance? And then just a quick follow-up. Can you share how many patients are enrolled in the double-blind portion of the study, which we'll be seeing data in June?

Okay. I think I caught both of your questions. I'm going to give the first one to Sean.

Thanks, Jeremy. So our revenue guidance will always consider all the information that we have and our best estimates going forward. And our range includes a multitude of factors, including generic impact. And the range from earlier in the year to now is driven by more physicians prescribing Korlym and more patients taking Korlym.

And the second question, I think, was just a numbers question. How many -- yes?

So how many patients were in the -- are going to be in the randomized withdrawal -- okay. So we haven't publicly disclosed that, but I will tell you that we have 62 patients who are in the randomized withdrawal phase of the study, and that's what will be the basis for our trial, with a mixture of those with hypertension or diabetes and/or having both.

Okay. I think that concludes our questions. Thank you very much. Corcept has become very much more complex than it was years ago, and I appreciate you really trying to capture all the information that we've sent to you. See you next quarter.

This concludes today's conference call. Thank you all for joining. You may now disconnect.