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 Charlie Robb. Please go ahead, sir.

Good afternoon. I’m Charlie Robb, Corcept’s Chief Financial Officer. Thank you all for joining us. Earlier today, we issued a press release giving our second quarter financial results, announcing a stock repurchase program and providing a clinical development. A copy is available at corcept.com. Complete financial results are available in our Form 10-Q. Today’s call is being recorded. A replay will be available through August 23, 2018 at 888-203-1112 from the United States and 719-457-0820 internationally. The passcode will be 6703650. Statements during this call other than statements of historical fact are forward-looking statements based on our plans and expectations and are subject to risks and uncertainties that might cause actual results to differ materially from those such statements express or imply. These risks and uncertainties include, but are not limited to, our ability to generate sufficient revenue to fund our commercial operations and development programs, the protections afforded by Korlym’s Orphan Drug designation and our intellectual property; the availability of competing treatments, including generic versions of Korlym; our ability to obtain acceptable prices or adequate insurance coverage and reimbursement for Korlym; and the scientific regulatory management and financial risks related to the development of our product candidates. 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 will include those concerning our 2018 revenue guidance and expected growth in 2019 and beyond; our stock repurchase program and its intended funding sources; physician awareness of hypercortisolism and selection of Korlym as the best medical treatment for many patients and continued shifts in medical practice; the clinical attributes of relacorilant; data from the dose-finding portion of our Phase1/2 study of relacorilant plus Abraxane as justification for expanding our oncology program; and the progress and…

Thank you, Charlie. Thank you, everyone, for joining us today. Corcept had another strong quarter. Revenue grew to $62.3 million, 75% more than our revenue in the second quarter last year. Excluding significant non-cash items, our non-GAAP net income was $25.4 million, 59% increase over the second quarter last year. Our cash and investments grew by $19.6 million to $159.9 million. The second quarter growth in our Cushing’s syndrome franchise was driven by the factors I described on previous calls. Korlym, our first-generation cortisol modulator works very well and practically all patients with hypercortisolism. At the same time, physicians are increasingly aware that every instance of hypercortisolism is serious and merits treatment. As they screen more thoroughly for the disorder, physicians are again to find more patients, and in many cases, choosing cortisol modulation with Korlym as the best medical treatment. This shift in medical practice is not slowing down. We’re reducing our revenue guidance for the year, because we do not think we will see revenue growth accelerate past the 60% to 65% growth rate we are currently seeing. An important reason for confidence in the future of our hypercortisolism franchise is our proprietary selective cortisol modulator, relacorilant. We released positive interim data from relacorilant’s Phase 2 trial. To understand the promise, relacorilant holds for our business, I need to explain how relacorilant’s clinical data suggest it would benefit patients. As many of you know, Korlym competes with cortisol at the glucocorticoid receptor, GR, for short. The receptor, which is activated when cortisol levels are high. Patients with hypercortisolism have too much cortisol activity at GR, which is what causes their symptoms. By reducing excess cortisol activity, Korlym makes patients better. Unfortunately, Korlym also binds the progesterone receptor, or PR. Korlym’s affinity for PR makes it an [aboard of]…

Thank you. [Operator Instructions] We’ll go first to Adam Walsh with Stifel.

Hey, guys, this is Neil Carnahan on for Adam. Would you guys mind providing some detail on the number of patients that ended up making it to the 350 milligram and 400 milligram cohorts? And then just any more detail you can provide around the discontinuation, what dose that occurred at? Thanks.

I’m not sure I exactly follow your question. I apologize, Neil. Please again tell?

Like what percentage of patients made it to in the dose-escalation made it to the 350 milligram, 450 milligram dose? And then on the SAE, do you have any detail around what dose that occurred at?

Yes. Okay. I think, I can get there. We have data now through 300 milligrams, that – that’s what we presented to date and will present the rest of the data as we actually have it in completion. And I want to just turn over for a second to Bob Fishman, who I think can answer the question about the adverse event.

Yes.

By the way, for those of you who don’t know, I’ve been on oncology for Bob is our Chief Medical Officer.

Right. The – well, to clarify the one serious adverse event was a pilonidal abscess and this is a complication of a congenital defect. It starts out as a pilonidal system, it simply became infected. So I don’t recall the exact dose at which occurred, but it was clearly by the investigator judgments and and ours unrelated.

And the second question was about the person who discontinued, which dose was that?

All right. It was on a – go ahead, sorry.

Yes, I believe it was at the 300 milligram.

At 300 milligram dose, Adam. Okay.

Okay. Thank you. I’ll get back in queue.

We’ll go next to Tazeen Ahmad with Bank of America.

Hi, guys, thanks for taking my questions.

Sure.

Would you mind us giving us an update on, I guess, where the Teva situation is with the patent litigation in terms of when we should expect the next update either from you or for Teva – from Teva or just from the CORT in Teva?

Yes, very glad to do so. I’m just turning the call back over to Charlie Robb, our Chief Financial Officer.

Yes. Hi, Tazeen. I’m sure, I’m happy to answer. Let me just stop by giving just a – I’ve got to give a little bit of background for – others on the call who might not be as up to speed on that as you are. So you understand, I can’t – for others, I really can’t comment on the substance of our legal positions or Teva’s legal position, our strategy and so forth. What all that we have, as you referred to our publicly available documents and those to date are just very, very few. But with that understood for everyone, I – Tazeen, I can answer your question. In broad terms, what we’re seeing now is, what we believe you should get used to seeing for quite sometimes complex legal process and argument, paperwork exchanges pushing us and Teva that we think is going to go on for – in one form or another for quite a while. Now with that sort of bit of context, I can answer your question directly. As most of you know, in February, we received notice that Teva had filed an Abbreviated New Drug Application, or ANDA, with the FDA, seeking approval to sell a generic version of Korlym. Under the statute that governs these things Hatch-Waxman Act, we then had 45 days to sue to have an infringement of what are called our Orange Book patents. These are the patents that the owner of a branded product, such as Korlym believes that generic would infringe. So on March 15, we sued Teva for infringement of what is the time where our two Orange Book patents. Under Hatch-Waxman, our lawsuit automatically stayed or on nonlegal terms prevented the FDA’s approval of Teva’s proposed generic product for 30 months for the resolution of our lawsuit with respect to those patents, whichever comes first. So in June, Teva moved to dismiss our complaint. In July, we amended our complaint. And among other things, our new complaint added allegations of infringement of a third newly issued Orange Book patent. So now we’re suing three patents against Teva. As we expected, later in July, Teva moved to dismiss our new complaint, and that’s where we are right now. Our response to Teva’s new motion is due later this month, I think, August 21st or thereabouts. Teva will have a chance to reply to that response. And sometime in the fall, we expect to be arguing the issue in front of the judge. So that’s where we are with the back and forth. And I think, yes there’s no more – cannot be more descriptive than that.

Okay. Thanks for that color.

Sure.

We’ll go next to Corey Davis with Seaport.

Corey?

Good afternoon. Thanks. I’m sorry, jumped on the call late if you answered this. But in general, how enthusiastic would you say you are in the relacorilant data in terms of these lower doses continuing to show a higher response in the last two doses that you have yet to report on?

Well, I’m going to again turn this over to Bob [Technical Difficulty]. A general answer to your question is very enthusiastic. I mean, these are significant clinical effects in the absence of, as expected, progesterone receptor antagonism. But again, we commented on it when we presented on the low-dose group in a minor way, because we weren’t sure whether that would continue as we increase the dose. But the striking lack of hyperglycemia is a very, very meaningful events and one that makes the medication in some respects much easier to use for many practitioners than Korlym. But I’ll turn over to Bob if you have any additional comment.

I would just add that the investigators impression of the benefit that they’re seeing in their individual patients was reflected in the acceleration of the pace of enrollment this year. So we – that was a strong indicator that the investigators were seeing the benefit that adds up to the data displays that we showed you.

And then, again, I apologize if you answered this already. But how quickly can you start enrollment of the Phase 3? And do you need to wrap certain things up before you can finalize the protocol, get the sights onboard, et cetera, et cetera?

Bob?

We had – yes, thanks for your question. Just to provide some context, we had the very unusual and enormously helpful position of being able to ask FDA for guidance for Phase 2 was ongoing, because we have an open-label trial. And so we submitted interim data and a proposal for our Phase 2 plan to FDA they took our request seriously and gave meaningful guidance. So that we’re confident we settled on endpoints that are going to meet their expectations. And so we have the design, we’ve shown you in our press release, our plan response criteria by which we will measure clinical benefit in these patients.

And what it all really funnels down to, I think, to answer your question, Corey is, we we are fully expecting to be able to start the study this year.

So is there anything left to do that is contingent upon completion of the ongoing study?

Again, we are in active planning for the Phase 3 study and expect to begin it in sometime in the near future. I don’t really have any more detail for you than that. In some sense, you’ve seen all the important data that we’ve seen.

All right. And then lastly, just safe to assume then that in its guidance to you that the FDA agrees that the endpoints as presented in this press release are going to be sufficient for endpoints in your Phase 3 program?

Bob?

Well, first just to clarify, we don’t have a special protocol assessment. So they haven’t officially approved them. But the guidance, as I mentioned, was very meaningful. So, yes, we have a high confidence in some of these endpoints. We’ll need FDA’s expectations and we’re confident that we’re the – collecting the data necessary to show the clinical improvement in the patients with Cushing’s syndrome.

Okay. That’s all I had for now. Thank you.

We’ll go next to Matt Kaplan with Ladenburg Thalmann.

Good afternoon. Just want to focus a little bit more on the Phase 3 plan for relacorilant. Can you give us a little bit more detail in terms of what the Phase 3 will look like the timeline? And I guess, will you have to go head to head versus Korlym in the study?

Yes, happy to do so. So we plan a Phase 3 that will be about 120 patients, it will be an international study. And it will be a placebo-controlled, randomized withdrawal study, and I’ll be back to that in just a moment. We will enroll patients who have endogenous Cushing’s syndrome, who as you heard, also have hyperglycemia and/or uncontrolled hypertension. And the patients will enter a six-month open label phase that starts with dose escalation, and this remind many on the call of the structure of the seismic trial. And then patients who meet the response criteria, which you’ve seen laid out and are the basis for data displays in the press release, those patients who meet response criteria will then enter a randomized withdrawal phase. And in the randomized withdrawal phase, patients either stay on medicine or they switch to placebo, and that’s done in a blinded fashion. And once they randomize, we expect patients on medicine to maintain their response in the patients on placebo to start to lose some of the benefit that they had gained previously. And then we compare the differences in glucose control and in blood pressure between the medicine group and the placebo group. One of the benefits of this is that it helps minimize the amount of time that these really sick patients spend on placebo. And in all of these trials as well as in ours, there will be enrolled than anyone with a significant relapse of their disease can go right back on drug.

Great. And potential timeline for study like that?

Well, as Joe mentioned, planning to start this year assume the two years end-to-end, which brings us to mid-2020.

So I just want to repeat that that’s two years first patient in to last patient out. But I think there was a little confusion in the past call about the glucose, I think, was a mistake two years in enrollment, that’s not what we mean. Two years from first patient into last patient out.

Got it. Thank you for that detail. And then just going back to the interim Phase 2 results that you reported. Initially, you showed a dose response in terms of glucose control at the lower dose. Are you continuing to see that at the higher-dose cohort?

We’re certainly seeing it and the best display of that is the point in particular to the graph on the number of responders for improvements in glucose control which was three in the low-dose group and seven in the high-dose group. So, yes, we’re seeing continued benefit in terms of that increased number of respondents.

Okay. And I guess, this is – you’re – the study you’re just going to need a single study for the approval actually?

Bob?

Yes, that’s our expectation. We have no indication of anything otherwise.

And how many patients do you need to get into the withdrawal phase randomized withdrawal?

Into the what?

How many patients you need to make it through the dose-escalation six-month open-label dose escalation to get to?

Rough numbers, out of the 120 open-label phase, we’ll need about 60 completer responders, meaning people who both complete in our responders and therefore, both qualify and are available to enter the randomized withdrawal phase.

Thanks a lot for the added detail.

You’re welcome.

Thanks, Matt.

And we’ll take a follow-up from Adam Walsh with Stifel.

Hi, guys. Can you just walk us through on the rationale behind, you guys obviously had kind of track record of being raised. Can you just talk to us about what’s changed since you originally issued guidance back in February? And then just the rationale behind the buyback program? Thank you.

Yes, very good. So two questions in there and I’m going to sort them in a different way. First, again, I want to reintroduce you to Sean Maduck, he is our senior Commercial Officer, who runs the Cushing’s syndrome franchise for the commercial question. And then I think, Charlie will answer the second question.

Hi, Neil, thanks for the question. Our business is rapidly growing. And in the orphan drug space, I think, as many people know, the law of small numbers exist, which can make it very difficult to predict future revenues. I definitely don’t say this as an excuse, as we as an organization always trying to be as accurate as we possibly can. But that being said, predicting whether we’re going to grow at 60% or 80% is not perfect science. As a reminder to everybody on the call, we raised our guidance multiple times last year, because we underestimated the accelerated uptake that occurred and we were lowering our projections. If you look back historically, our revenues have grown by approximately 60% to 90% annually over the last two years, and we have definitely seeing fluctuations in that growth over that window of a time. For this year – remainder of this year further acceleration off of our current 60% to 68% growth rate doesn’t seem likely, as Joe has previously mentioned, which is why we adjusted our revenue range down. Again, as an organization, we strive to be as accurate as possible on our estimates and this guidance shift does not change our belief in the longer-term size and value of this market. In terms of our actual business this year, we continue to experience revenue growth from both new and existing prescribers and we expect that to continue through this year and into next and beyond. Our prescriber base is growing. And in the first six months of 2018, we actually added more new prescribers and saw more active prescribers, which as any physician that has written one or more prescription than in any equivalent window of time since launch. In fact, over half of our prescriptions this year in 2018 have come from physicians that prescribe Korlym for the first time over the last 12 months, and we believe this bodes very well for the future. And we said this many times before, but there are many naive – Korlym naive physicians have yet to write their first prescription. And we believe there are many more hypercortisolism patients who could benefit from a GIR receptor antagonism.

Thanks, Sean.

Okay. Thank you. And then just on the buyback?

Yes. Hey, Neil, this is Charlie. The reason – the rationale for the buyback is really very straightforward, as I said in my introductory remarks. Looking at our cash reserves, our prospects and our planned development activities, we felt that we would be able to do all of those things and return money in this sort of tax efficient way to shareholders and we got that sort of as our company that’s our obligation to do that. So that’s why we’ve announced the program.

Thank you, guys.

Thank you.

Adam.

We’ll go next to Alan Leong with BioWatch News.

Thanks for taking my questions, Joe, Charlie, Sean, and Bob.

Sure.

First set of question really goes back to the recent results, but really I want to take a different tact on it. I wanted to talk – see if I get a discussion on the impact on labeling, because Korlym didn’t earn a blood pressure label. But what can you say now about the FDA’s approach for earning such a way within Cushing’s? And then as you – and then the follow-up on that is, as you sit back and look at your results, what were major lessons learned or carryovers into your general metabolic program?

Okay. Let me see if I can really sort those questions out. I mean, I think, really the first thing to begin with Alan is that, GR modulator like relacorilant, that’s the one you asked about. What’s really the point of approval is for the treatment of Cushing’s syndrome. We’ve highlighted two symptoms, glycaemic control and hypertension as a kind of lead symptoms for Cushing’s syndrome, but there are many others. I believe that we actually test for 24, because cortisol goes everywhere in the body. When you have aberrant cortisol activity, you have many other things which are wrong as well people get, and I think, you know this. But they gain weight. They gain weight particularly around their middle, they have cognitive issues, they have thin skin, they are immunosuppressive, they get infections, so there are many, many things that we measure. But ultimately, what we want is the broadest label and most appropriate label, which is for the treatment of Cushing’s syndrome. And there isn’t at this point in time just in the field a validated index for the treatment of Cushing’s syndrome. So in sense that you’re obligated to prove improvements sort of a symptom at a time and obviously, hyperglycemia and hypertension are two particularly pernicious symptoms, so that they’re easy to measure, you do see when improvement occurs and certainly, people were 100% agreement that if you improve those, you can prove something significantly. So I think that’s really the – I hope that’s addressed your question. I think that’s really how we’re looking at it. And the second question, I think was – you are asking about how this reads over to metabolic diseases? Well, at the core of it, Cushing’s syndrome is a metabolic disease. Many of the symptoms you see are…

What can you tell us about the Phase 1 results with 118335 and your special interest is really the prednisone challenge, what can you say at this point about the anti-inflammatory versus metabolic outcomes?

We’ll give you all the results when they’re filed. That study is still in progress, Alan, and I don’t want to really get ahead of ourselves. But I can – I guess, the one thing I’ll comment to you, because I’ve already made that comment is in terms of tolerability, which really is what Phase 1 is about so far so good.

Thank you.

At this time, I would like to hand the call back over to Charlie Robb for any additional or closing remarks.

That’s all. Thank you very much, everyone, for joining us, and we’ll be speaking to you again next quarter. Thanks.

That does conclude today’s conference. We thank you for your participation.