Good day. And welcome to the Corcept Therapeutics Conference Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. [Operator Instructions]. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Atabak Mokari, CFO. Please go ahead.

Hello, everyone. Good afternoon and thank you for joining us. 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 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 or 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 Q3 of 2023 was $123.6 million, an increase of 22% compared to the third quarter of last year. We are raising our 2023 revenue guidance again to a range of $470 million to $480 million, up from $455 million to $470 million. Net income was $31.4 million or $0.28 per share in the third quarter. Our cash and investments at September 30th were $414.8 million an increase of $51.5 million in the quarter. I will now turn the call over to Charlie Robb, our Chief Business Officer, to provide a legal update. 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. This September 26 through September 28, the case went to trial in Federal District Court in Camden, New Jersey. At trial, we asserted two patents against Teva, both of which concern the co-administration of Korlym with a commonly prescribed class of medications known as strong CYP3A inhibitors. Teva does not and cannot dispute the validity of our patents. That matter was settled in our favor by the post-grant review proceeding Teva initiated and lost in 2019. Teva's only defense at trial was to argue that their generic product would not infringe either of our patents. This was the sole issue, infringement of either patent before the court. With trial over, here is what will happen next. As is customary, each party has submitted a post-trial brief arguing that it should win given the applicable law and the facts adduced at trial. In about a week, we will each submit a short reply brief responding to the arguments in the primary briefs. These documents are publicly available at the government's Pacer website. That's Pacer, P-a-c-e-r. Once briefing is complete, the judge may or may not ask for oral arguments. The verdict will follow, most likely in the first quarter of next year. Of course, the timing is entirely at her discretion. The losing party is entitled to appeal any adverse decision to the Federal Circuit Court of Appeals. Such an appeal will likely take between 12 months, and 18 months to complete. All in all, this dispute will likely not be completely resolved until the second or third quarter of 2025. Those of you who have joined our prior calls have heard me say in increasingly emphatic tones that we are confident in our case. I will say it again, we are confident in the strength of our case, supremely confident. We walked into court certain that the law and the facts are on our side, we left even more certain that the law and the facts are on our side. We look forward to the judge's verdict. I will now turn the call over to Joe Belanoff, our Chief Executive Officer. Joe?

Thank you, Charlie. Our strong results in the third quarter reflect physicians increasing awareness of hypercortisolism and the harm it causes. A screening for the disease becomes more common, more physicians prescribe and more patients receive Korlym. This changing behavior has led to another record high in our quarterly revenue. We expect this trend in medical practice and with it our commercial growth to continue. Korlym is an excellent treatment for patients with Cushing's syndrome and there are many eligible patients who have yet to receive it. Leading endocrinologists increasingly believe, but there are considerably more patients with Cushing's syndrome than was once assumed. The results of our CATALYST study will likely provide further evidence to bolster this belief, which will in turn lead physicians to identify and provide effective treatment for the large group of patients whose hypercortisolism currently goes undiagnosed. This advance in medical thinking buoy our Cushing's syndrome business. We are raising our 2023 revenue guide range again, this time to $470 million to $480 million. We're also very excited by the potential of our in clinical development programs. Since inception, our research and development efforts have built on the hypothesis that cortisol modulation is powerful therapeutic mechanism in many serious disorders. Our proprietary compounds modulate cortisol's effects by binding to the glucocorticoid receptor or GR. The receptor which is activated when cortisol levels are high. They do not bind to the progesterone receptor and don't cause some of Korlym's, our approved product, most serious off target effects. Interestingly, while all our compounds modulate cortisol activity, they produce distinct clinical effects. Some cross the blood brain barrier, others do not. Some perform best in models of solid tumors, others are more potent models of metabolic disease. Some appear to be tissue specific, others have more global events.…

[Operator Instructions]. Our first question comes from Matt Kaplan with Ladenburg. Your line is open.

Hey guys, thanks for taking the questions and congrats on a strong quarter. To delve into, your pipeline a little bit and specifically the near-term readouts that we have coming up in 2024. I guess specifically, first, can you talk a little bit more about the GLUATE study and the primary endpoint there, and what you're looking to show in that study?

Hey, hey Matt, I apologize. I really am having trouble hearing your question. The why isn't so good. Is it possible to either repeat it or call back in?

Different way, hang one second. [Indiscernible]

Matt question?

Is that any better?

No, we're just not hearing you. I'm sorry, Matt. Want to just redial. We'll pick you up again. Next question.

Our next question comes from David Amsellem with Piper Sandler. Your line is open.

So, hope you can hear me well. So, couple questions. First, can you provide specifics on the year-over-year volume growth for Korlym? That's number one. And then, I guess as part of that question, my understanding is third quarter last year was somewhat weaker. So potentially we're looking at more favorable year-over-year comp. So just talk about the volume growth dynamics. I know there was also pricing action earlier this year, just so just help us understand the -- what was volume, what was price, and then in terms of your comments on screening for hypercortisolism and greater diagnoses and treatment starts, what does that mean going forward? I know, you're not in a position of guide for ‘24, but is what we're seeing this seeming inflection -- is that something that you're looking at as sustainable? Thanks.

Okay. Thank you, David. I think we've got both of those questions. I first want introduce everyone reintroduce everyone to Sean Maduck, who is the President of our endocrinology division. And he can address your first question.

Yes, David, thank you for the question. So, in terms of year-on-year growth, we have 22% growth, 12% of that was driven by volume, and 9% was driven by price. And I think your next question was sort of the sustainability through Q4. I mean, that's built into our range. We expected the growth we experienced in Q3, and we expect that growth to continue for many quarters. We had more new physicians and existing physicians prescribed colon for patients across the country. And that's what drove our increased guidance range and the revenues you're seeing.

Yes. And David, as a general answer to your second question, I think what we're really seeing out in the world is the recognition that hypercortisolism is considerably more common than I think people once assume. While it's not, they're not a million people with hypercortisolism, it's not the ultra rare disease that people once thought it was. So, we actually think that this expansion because of really screening is going to continue for a substantial period of time. Some of those patients will eventually fall to Korlym, others will be treated in different ways. But the idea that this is an important medical therapeutic area that has really been underdressed, I think is gaining acceleration.

That's helpful. If I may sneak in a quick follow up, in terms of the new starts and just the growth, are you getting a good chunk of that growth from physicians who are new to Korlym treatment?

I'm going to pass you back to Sean.

Thank you for the question. We're getting a mix of both. We have new prescribers every single month, every single quarter, and we also have physicians that have previously prescribed Korlym, prescribe again for many subsequent patients potentially. So, the short answer is yes across both groups.

Our next question comes from Matt Kaplan with Ladenburg. Your line is open.

So, first off, congrats on a strong quarter. Just wanted to focus a little bit on your pipeline. Obviously, 2024, it's going to be a significant year for you guys with a lot of data readouts. And just in terms of the near-term readouts. Can you give us a little bit more color on the Grace study and what you're looking to show there, primary endpoint and I guess the results should be potentially available in the first quarter given your desire to file an NDA in the second quarter.

I want to reintroduce the group to Bill Guyer. Bill runs all of our development programs, and he can answer your specific question.

So, let me remind you, the GRACE trial is an ongoing study with two parts. It's basically two studies in one. The first part is the open label part of the study where we're evaluating escalation of dosing from a 100 milligrams up to the maximum dose of 400 milligrams. And for those who meet response criteria for diabetes and or hypertension, both, then get into the randomized withdrawal study, which is our primary endpoint of that study. We're going to share, as you put it top-line results and overall results when there is material information within that first half of the year as we progress towards our NDA. When you think of a success, the success for this program would be treating patients with Cushing's syndrome exchange their Cushing's syndrome improved dramatically. And then we're really treating very sick patients with Cushing's syndrome in the BRACE trial. And relacorilant is a key in that treatment because it modifies the underlying disease of Cushing's syndrome. A success when you look at the primary endpoint would be to evaluate those patients who respond to relacorilant. And when they go into the randomized withdrawal part, they get switched to either staying on relacorilant or switching to placebo. And so, we're evaluating the maintenance of their response to hypertension and or diabetes control or losing that response. And that's what we're going to be evaluating.

And then, if you could, a little bit more color in terms of the data that you're expecting from the first part of the study where you're taking a look at the catalyst in terms of the prevalence. What should we be expecting as you announce the prevalence results in the first quarter?

Sure. Thank you for that second question. The goal for the catalyst trial is pretty simple. It's to replicate and confirm the research from the past 15 years some publications of cohort studies showing the patients with difficult to control diabetes, will have a positive dexamethasone, dexamethasone suppression test or what we call a DST fee with a prevalence in the range of approximately 10% to 20%. And so right now, we're well within that range for the Catalyst study. We look to complete that study by the end of this quarter, and publicize that within the first quarter next year.

And I'll jump back in the queue now. Thanks.

Our next question comes from Roanna Ruiz with Leerink. Your line is open.

So, first question, curious if you could update us about, remind us about your IP expectations for Korlym and relacorilant and endogenous Cushing's. I was just curious if there are any implications that we should think about with the recent developments with your litigation with Teva there?

Yes. I'm going to pass it back to Charlie Robb who is responsible for all of our legal issues.

Yes. Hi. I guess I'll start taken into two parts, obviously. Because our IP protections for Korlym and or rather Korlym, I'm really sure they're completely separate. As far as the developments go, with respect to Korlym, as I mentioned, we had the trial at the end of September. And I really want to stress that there, the patents we are defending, we are asserting against Teva, really concern the co administration of Korlym with a really broadly prescribed class of drugs that are important drugs for everyone but also are commonly prescribed to patients with Cushing's syndrome. So, the trial, I think went very well. I think we've made exactly the case we needed to make. And so, in terms of commentary on our Korlym IP, I feel very good about it. I think we brought it out into court, it performed very well, and, I'm confident that it's now enhanced to judge. That IP runs through 2037. So those two patents, and there will or maybe further patents that come out of our work in the coming months years with respect to Korlym, but right now, we're protected through 2037. Now, relacorilant is as you know a novel proprietary compound unlike Korlym, which is the active ingredient, it's a generic compound. And so, with respect to relacorilant, we have patents on its composition of matter, we have patents for a variety of uses for the compound and for its sister compounds in a range of disorders, including the ones that we're studying now. And that protection runs past 2040. So, we have I think extremely robust sort of multilayered sort of IP surrounding relacorilant and there will be more being developed as our investigations continue to make new inventions that are worthy of patent. So, I hope that answers your question.

That helps. And then second one I had, just tagging on about the GRACE trial reading out soon. I was just curious if you could explain what the statistical powering is for the endpoint there and anything else we should think about in the data?

Sure. I'll answer that question. So, this disc overpowering is to look at the loss of response. We have 90% power to detect a loss of response of about a 50% difference between staying on relacorilant and maintaining that response or switching to placebo and losing their response.

Our next question comes from Joon Lee with Truist. Your line is open.

I have a question on timing of the NDA submission in the second quarter of next year. Would you want to wait for the gradient study by mid-year to submit more fuller picture of the drug? What's the rush there? And would the FDA want to see it? And the other question is one of the drivers of called and franchise that keeps surprising you to the upside.

Okay. Two different questions. Let me, Joon, give you first to Charlie for the NDA question.

So, yes, we're the -- we think that the most important demonstrator of in Grace's safety and efficacy of relacorilant safety and efficacy in Cushing syndrome will be the GRACE trial. We think that's sufficient to support our NDA. And so, we're going to go with that, because it will be ready, and ready first, ready to proceed and just continue to move our business forward as expeditiously as possible. We will be in a position just procedurally to submitting know additional data to the FDA as gradient comes in, if that's important to pressing the NDA forward. So, I think we retain some real optionality there without having to sacrifice the pace of our timelines.

And Joon, second question, would you please repeat that?

Yes. So, what are the drivers of Korlym franchise that keep surprising you to the upside? You upgraded guidance, I think two quarters in a row, not if I'm not mistaken. So just curious what's the driver of that?

Good. No, I understand the question. I'm going to pass you back to Sean.

Yes, Joon. Thank you for the question. I mean, these results have been expected given this is where we have been investing, and in the past, I’ve talked a little bit about some of the initiatives we've been investing and grow our business, and I thought I'd take a minute to update everybody on where those are at. Now, before I do that though, I want to highlight, I think an important fact. And that's we have a very clear understanding now, more so than in the past, that this is a multi-billion-dollar market opportunity, and the investments that we have made to grow our business and we will continue to make are highly leveraged. And we expect that they will both capture the opportunity and then yield a higher rate of return. So, from an initiative standpoint, which is what you're talking about, there's three that we previously discussed on calls, the first being the expansion of our sales force. The second is the increased effectiveness of that team, and then the third being the initiation of the catalyst study, which Bill just spoke about. Now, in terms of the sales force and the size of that team, we're currently in the mid-60s and we are continuing to add clinical specialists throughout the country. Our target right now is about 75, but we're unlikely to stop there, and we're going to continue to add top sales talent as we find it. And so, part of the driver of the result is seeing that our, both our existing clinical specialists and some of our newer clinical specialists are starting to become more effective and produce more. The second initiative really has been around that productivity driver. And what we've done is strengthen and streamline our training program with the goal…

Thank you so much. And looking forward to all the catalysts.

Thank you, Jim. All right. Well, listen, thank you all for tuning in this quarter. Happy day after Halloween. And we look forward to seeing you in three months with really progress once again. Bye-bye.

Thank you for your participation in today's conference. This does conclude the program. You may now disconnect.