Corcept Therapeutics - Q2 2023

Transcript

Operator (participant)

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. To ask a question during the session, you will need to press star one one on your telephone, and you will then hear an automated message advising your hand is raised. To withdraw your question, please press star one one again. 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.

Atabak Mokari (CFO)

Hello, everyone. 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 second quarter and providing a corporate update. The 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 facts, are forward-looking statements based on our plans and expectations that are subjects to risks and uncertainties, which might cause actual results to defer 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 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 second quarter of 2023 was $117.7 million, an increase of 14% compared to the second quarter of last year. To reflect that growth, we are raising our 2023 revenue guidance again to a range of $455 million-$470 million, up from $435 million-$455 million.

Net income was $27.5 million, or $0.25 per share in the second quarter, compared to $27.4 million, or $0.24 per share in the same period last year. Our cash and investments of $363.3 million at June 30th, reflects the purchase of 6.6 million Corcept shares for $145.4 million during the quarter. I will now turn the call over to Charlie Robb, our Chief Business Officer, to provide a legal update. Charlie?

Charlie Robb (Chief Business Officer)

Thanks, Atabak. In March 2018, we sued Teva Pharmaceuticals in Federal District Court to prevent it from marketing a generic version of Korlym in violation of our patents. Trial is set to begin next month on the 27th of September. As a reminder, Teva cannot dispute the validity of two patents we are asserting against it. 214 patent and the 800 patent, which concern the safe co-administration of Korlym, the commonly prescribed class of drugs known as strong CYP3A inhibitors. Issues determinative of these patents validity were decided in our favor when Teva lost the post-grant review challenge it initiated at the Patent Office. Teva's only defense with respect to these two patents is that its proposed products would not infringe them. Position we believe has no legal or factual support.

The 214 and 800 patents are two of the four patents we are asserting against Teva. As I said last quarter, and in all of the calls we've held since this litigation began, we are supremely confident in the strength of our case. We are happy that our trial date is approaching. We look forward to our day in court. Why? The law and the facts are on our side. I'll now turn the call over to Dr. Joseph Belanoff, our Chief Executive Officer. Joe?

Joseph Belanoff (CEO)

Thank you, Charlie. The strong results of our commercial business in the second quarter reflect the early return on our substantial investment to stimulate physicians to both better recognize and treat hypercortisolism. In the second quarter, we saw a continued increase in the number of patients receiving Korlym and in the number of physicians prescribing the medication. The business translation of more panic patients benefiting from Korlym treatment is a new record high in our quarterly revenue. We expect our 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 that there are considerably more patients with Cushing's syndrome than was once assumed.

Results of our ongoing CATALYST study will likely provide further evidence to bolster this belief, equally likely, will lead physicians to begin to identify and provide effective treatment for a large group of patients with hypercortisolism, whose disease currently goes undiagnosed. We are confident in the growth potential of our Cushing's syndrome business and are raising our 2023 revenue guidance range again, this time to $455 million-$470 million. We are also very excited by the potential of our clinical development programs. Since inception, our research and development efforts have built on the hypothesis that cortisol modulation can be a 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 products, most serious off-target effects. Interestingly, while our compounds modulate cortisol's activity without modulating progesterone's activity, they are not identical. Some cross the blood-brain barrier, others do not. Some perform best in models of solid tumors, others are more potent in models of metabolic disease. Some appear to be tissue-specific, others have more global effects. These diverse qualities allow us to study a wide variety of disorders. Currently, we are conducting programs with three of our proprietary selective cortisol modulators, relacorilant, dazucorilant, and miricorilant. In ovarian, adrenal, and prostate cancer, ALS, NASH, and of course, Cushing's syndrome. We have additional compounds in clinical and preclinical development.

In the next 12 months, we expect data from our GRACE, GRADIENT, and CATALYST studies, submission of an NDA for relacorilant in Cushing's syndrome, completion of enrollment of our ROSELLA and DAZALS studies, and initiation of a phase II-B trial of miricorilant in patients with NASH. This is a very exciting time for Corcept. We are evaluating relacorilant for the treatment of hypercortisolism in two phase III trials, GRACE and GRADIENT. Relacorilant is a selective cortisol modulator. Like Korlym, it achieves its effect by competing with cortisol at the glucocorticoid receptor. Unlike Korlym, it does not bind to the progesterone receptor, PR for short, and so does not cause PR-related side effects, including termination of pregnancy, endometrial thickening, and vaginal bleeding. By a different mechanism, relacorilant also does not cause hypokalemia, low potassium, a serious side effect experienced by 44% of patients in Korlym's pivotal trial.

Korlym-induced hypokalemia is a leading cause of Korlym discontinuation. Relacorilant's phase II efficacy and safety data were compelling. Patients experienced meaningful improvements in hypertension and glucose control, as well as in a variety of other signs and symptoms of Cushing's syndrome. There were no relacorilant-induced instances of endometrial thickening or vaginal bleeding, and no drug-induced hypokalemia. The trial results were published in Frontiers in Endocrinology in July 2021. With enrollment in GRACE complete, we are focused on finishing the trial and preparing our NDA, which we plan to submit in the second quarter of 2024. Relacorilant has tremendous promise as a treatment for patients with all etiologies of endogenous Cushing's syndrome, and we are eager to make it available. Our second phase III trial in hypercortisolism, GRADIENT, is studying relacorilant's effects in patients whose Cushing's syndrome is caused by an adrenal adenoma or adrenal hyperplasia.

Patients with this etiology of Cushing's syndrome often experience a less rapid decline, but their health outcomes are poor, including a higher risk of premature death. While we do not expect our NDA in Cushing's syndrome to depend on data from GRADIENT, we do expect the study to produce valuable data about an etiology of Cushing's syndrome that affects many patients whose hypercortisolism frequently goes undiagnosed and untreated. I'm pleased to announce that our CATALYST study is progressing ahead of schedule. CATALYST is a 1,000-patient, phase IV trial examining the prevalence of hypercortisolism in patients with difficult-to-control type 2 diabetes. Patients diagnosed with hypercortisolism in our CATALYST study may choose to enter a randomized, double-blind, placebo-controlled study of Korlym. Many independent studies conducted over the last 15 years have found that the prevalence of hypercortisolism in patients with type 2 diabetes is substantially higher than in the general population.

The most prominent diabetologists in the United States help us design and are participating in CATALYST, which will be the largest study of its kind. We have received very positive feedback from leading endocrinologists regarding this study and expect to complete enrollment in the fourth quarter, a bit ahead of our previous estimate. Our oncology program is testing three anti-cancer mechanisms, first postulated by investigators at the University of Chicago and later confirmed by other prominent researchers. One mechanism is increasing apoptosis, the program's cell death that chemotherapy is meant to induce in solid tumors. Cortisol works against the beneficial effect of chemotherapy by suppressing apoptosis. In our successful control phase II trial in women with platinum-resistant ovarian cancer, the addition of our selective cortisol modulator, relacorilant, enhanced the effect of chemotherapy, likely by blunting cortisol's anti-apoptotic effect. Relacorilant provided meaningful benefit to many of the women in our study.

While these women's disease had progressed on two or more previous lines of treatment, including previous taxanes, relacorilant appeared to resensitize the disease to chemotherapy's beneficial effects in some women. Those who received relacorilant intermittently, the day before, the day of, and the day after they received nab-paclitaxel, exhibited statistically significant improvement in progression-free survival and duration of response compared to the group who received nab-paclitaxel monotherapy. Women in the intermittent relacorilant group also lived longer than those in the comparator arm, with a p-value that approached statistical significance. Our analysis to date indicates that 29% of the patients who took intermittent relacorilant were alive 2 years after study start, versus only 14% who took nab-paclitaxel alone. Just as important, the women who received relacorilant plus nab-paclitaxel experienced no additional side effect burden compared to those who received nab-paclitaxel alone....

The results from this study were recently published in the prestigious Journal of Clinical Oncology. Results have also been featured in podium presentations at the 2021 and 2022 European Society for Medical Oncology, ESMO meeting, and at the 2022 American Society of Clinical Oncology, ASCO annual meeting. ROSELLA, our confirmatory pivotal phase III trial in platinum-resistant ovarian cancer, is enrolling patients. ROSELLA's design closely tracks our phase II study, and its goal is simply to replicate our positive phase II results in a larger group. Planned enrollment is 360 women, randomized one to one to receive either relacorilant plus nab-paclitaxel or nab-paclitaxel alone. The primary endpoint is progression-free survival, with overall survival a key secondary endpoint.

We are conducting this study in collaboration with leading clinicians from the Gynecologic Oncology Group in the United States and the European Network of Gynaecological Oncological Trial groups in Europe. We are on track to complete enrollment by the end of the year. Leading gynecological oncologists have told us that in their view, relacorilant's potential benefit, improved progression-free and overall survival without increased side effect burden, would constitute an important medical advance, and that relacorilant plus nab-paclitaxel has the potential to become a new standard of care in women with platinum-resistant ovarian cancer. The second mechanism by which cortisol modulation may prove useful is by blocking an important tumor growth pathway. Cortisol stimulation is a major reason why patients with prostate cancer treated with a widely prescribed androgen receptor antagonist, enzalutamide, eventually experience resurgent disease. Deprived of androgen stimulation, their tumors switch to cortisol activity to stimulate growth.

Our hypothesis is that adding a cortisol modulator to androgen deprivation therapy will close this tumor escape route. Our collaborators at the University of Chicago plan to begin a randomized, placebo-controlled phase II trial of relacorilant plus enzalutamide in patients with prostate cancer before these patients have had an initial prostatectomy this quarter. Third therapeutic mechanism seeks to treat tumors by enhancing the body's immune response. Cortisol suppresses the immune system, which may blunt the effectiveness of cancer therapies intended to stimulate the immune system. Our hypothesis is that adding a cortisol modulator to immunotherapies, such as checkpoint inhibitors, may enhance the effectiveness of these therapies. We are conducting a phase I-B trial of relacorilant, plus the PD-1 checkpoint inhibitor pembrolizumab, in patients with advanced adrenal cancer, whose tumors produce excess cortisol. Pembrolizumab is rarely effective as monotherapy in treating this form of adrenal cancer.

ALS, commonly known as Lou Gehrig's disease, is a devastating illness with an urgent need for better treatment. DAZALS are a 198-patient, randomized, double-blind, placebo-controlled phase II trial of dazucorilant in patients with ALS, is briskly enrolling patients. Dazucorilant is a selective cortisol modulator that has shown great promise in animal models of ALS, improving motor performance and reducing neural inflammation and muscular atrophy. We are conducting this important study in collaboration with TRICALS, a leading ALS academic consortium in Europe. We recently added clinical trial sites in the United States and are on track to complete enrollment in DAZALS by early next year. Finally, I'll turn to our program in NASH, a serious liver disorder that afflicts millions of patients in the United States. Miricorilant, an oral medication, continues to demonstrate great promise as a treatment for NASH.

In our prior NASH studies, patients who received 600 mg or 900 mg of miricorilant daily exhibited large, rapid reductions in liver fat, but also substantial, albeit transient, elevations of the liver enzymes ALP and AST. The improvements in liver fat in these patients was greater and occurred much more rapidly than we had expected and is rarely seen over any period of treatment. Our ongoing phase I-B dose-finding study, which evaluated a range of doses and dosing schedules of miricorilant, found that patients who received just 100 mg of miricorilant orally twice a week for 12 weeks, experienced an approximately 30% reduction in liver fat and showed improvements in liver enzymes and markers of liver disease. These patients also experienced improvements in key metabolic and liver measures, such as HOMA-IR, serum triglycerides, and LDL. Importantly, miricorilant was very well tolerated.

We plan to submit these results for presentation at a scientific conference, and we'll initiate a phase II-B trial in the fourth quarter. In conclusion, we are extremely optimistic about the future of Corcept. Our Cushing's syndrome business has tremendous growth potential and generates substantial profits, even as we invest in our advancing development programs. We are again raising our revenue guidance for this year and anticipate growth for years to come. Our CATALYST study holds great promise, as the data generated will help physicians to improve the screening and treatment of patients whose difficult-to-control diabetes is caused by hypercortisolism, a population whose Cushing's syndrome frequently goes undiagnosed. For these patients, hypercortisolism is their disease, and diabetes is a symptom of their hypercortisolism. Our development programs are generating increasing evidence that validates our long-held belief that cortisol modulation has the potential to treat a wide range of diseases.

Reducing cortisol activity is a straightforward and effective way to treat Cushing's syndrome and can offer substantial benefits to patients with other serious disorders. Ovarian cancer, ALS, and NASH are current examples, but there will be others. In addition to relacorilant, dazucorilant, and miricorilant, we have many other proprietary selective cortisol modulators in our portfolio with potentially very different clinical attributes. In the next 12 months, we will see data from our GRACE, GRADIENT, and CATALYST studies in Cushing's syndrome. We'll submit relacorilant's NDA in Cushing's syndrome, and we'll complete enrollment in large controlled studies of platinum-resistant ovarian cancer and ALS. We will also begin a phase II-B study in patients with NASH. As I said, this is an exciting time for Corcept. I thank our dedicated, creative employees and loyal investors for making that possible. I'll stop here for questions.

Operator (participant)

Thank you. At this time, we will conduct the question-and-answer session. As a reminder, to ask a question, you will need to press star one, one on your telephone and wait for your name to be announced. To withdraw your question, please press star one, one again. One moment while we compile the Q&A roster. Our first question comes from the line of Matt Kaplan with Ladenburg. Your line is open.

Matt Kaplan (Managing Director and Head of Healthcare Research)

Hi, good afternoon, and thank you for taking the question, and congrats on the strong quarter.

Joseph Belanoff (CEO)

Thanks, Matt.

Matt Kaplan (Managing Director and Head of Healthcare Research)

You're welcome. Can you give us some sense in terms of what drove the revenues in the second quarter and your confidence in increasing your guidance for this year as well?

Joseph Belanoff (CEO)

Sure, Matt. I'm just gonna reintroduce to the group Sean Maduck, who is the President of our Endocrinology Division and runs our Cushing's syndrome business.

Sean Maduck (Endocrinology Division President)

Hi, Matt, thanks for the question. I'll just start by saying we're, you know, we're very pleased with the results. Your question was what drove it? It, it was driven by improved access and improved field execution. We're starting to see some early returns from our investments. Many of our investments have been on expanding the field and, and, and working to get our field, more, more productive and, and efficient. So through that process this quarter, we've added both new patients and new prescribers. We have more patients taking Korlym than ever before. Disease awareness continues to increase, and, and really, we're more confident than ever about the potential size of the Cushing's syndrome market.

For the remainder of the year, I mean, at this point, our belief is just a fraction of hypercortisolism patients have been identified and treated, and over the coming months and quarters, there's gonna be many more.

Matt Kaplan (Managing Director and Head of Healthcare Research)

Okay, that's, that's, that's helpful. Just looking at your pipeline, with GRACE and GRADIENT, GRACE completing enrollment and GRADIENT to complete in the near term, can you help us set expectations in terms of what to expect for from GRACE and GRADIENT as they read out perhaps next year?

Joseph Belanoff (CEO)

Yes. Let me introduce you again to Bill Guyer, who runs all of our development, our Chief Development Officer. Bill, comment?

Bill Guyer (Chief Development Officer)

Great. Thank you, Matt, for that question. As we have now completed enrollment for the GRACE trial, the investigators and we are very excited because of that. Now we're in the plans of submitting that NDA, and we've actually been working on that NDA since last year. As we collaboratively work with the FDA, we're gonna be working on developing and submitting all of our studies so that the NDA will include many different studies. It'll include the full phase II data from a safety and efficacy perspective, the GRACE study from a safety and efficacy perspective, the GRADIENT trial from a integrated safety perspective, as well as our long-term extension study, which has been ongoing for over 5 years, and we have patients on relacorilant for doing well over 5 years.

We're also gonna include many other new, recently presented and published data that I think we're gonna be excited to include in the NDA. One of those being, we just completed a Thorough QT study, where we evaluated the heart's QT interval and looked at relacorilant, and it saw no effects on the QT interval, and that would make this the only drug in Cushing's syndrome that does not affect the QT interval. That's exciting news as we have completed that study. We've also seen published preclinical research citing how relacorilant can uniquely shrink pituitary tumors in tissue cultures. With those tumors, we've also seen two published case reports highlighting similar clinical benefit of relacorilant in patients. This is a differentiating factor because mifepristone was also used in those preclinical studies and saw no change in pituitary tumors.

Finally, we just presented some new data from our phase II trial looking at coagulopathy parameters, which was important because Cushing's syndrome patients are high risk for developing hypercoagulopathy events. Relacorilant showed no effects on those coagulopathy patterns. That would be, again, the only drug in the Cushing's syndrome space to have no effect on hypercoagulopathy patterns. This data makes me confident in the benefit relacorilant can bring to patients and confident as we proceed towards our NDA in the next coming year.

Matt Kaplan (Managing Director and Head of Healthcare Research)

Great. Just a quick follow-up on that, where are you with the manufacturing, and is manufacturing at all a rate-limiting step?

Joseph Belanoff (CEO)

Manufacturing is not a rate-limiting step, Matt. You know, we'll, we'll certainly be ready to have commercial supply, when and if our NDA is approved.

Matt Kaplan (Managing Director and Head of Healthcare Research)

Great. One last question from me, and then I'll jump back in the queue. The CATALYST study, you know, moving ahead... ahead of plans.

Do you have a sense in terms of, based on the design of this study, what percentage of, of patients that you're screening, have hypercortisolism in, in this, in this difficult to treat type 2 diabetes patients?

Joseph Belanoff (CEO)

Yes, Matt, I understand the question. I'm gonna hand you back to Bill.

Bill Guyer (Chief Development Officer)

CATALYST is building on a tremendous amount of research already generated with multiple different studies, and I can cite all the studies and send you all the references. Many of those studies are in hundreds of patients. In those independent studies over the past 15-20 years, we found that hypercortisolism is higher than the normal general population. I would guesstimate it to be around, when you look at the average for those studies, it's about 10%-20% for those patients who have difficult-to-control diabetes. With CATALYST, this would be then that landmark study because it is the largest study of its kind, evaluating 1,000 patients to evaluate those with type 2 diabetes who are difficult-to-control. We're doing a simple test of just one DST.

You know, all of our investigators who are part of this are highly motivated by this. That's why screening is ahead of schedule. Thus far in the CATALYST study, even though it's early, I would say that the results so far are mirroring what we've seen in past published studies.

Matt Kaplan (Managing Director and Head of Healthcare Research)

Great. Great. Thanks for the added color, guys.

Joseph Belanoff (CEO)

Thank you, Matt.

Operator (participant)

One moment for our next question. Our next question comes from the line of Edward Nash with Canaccord. Your line is open.

Edward Nash (Managing Director and Senior Biotechnology Analyst)

Hi, thanks for taking the call. Yes, congrats, guys, on such a strong quarter. Really, really great.

I want to ask you, and I guess this goes in the same vein of it, of it being a really strong quarter and, just the, the additional input and the sales effort really kind of does what you've attributed that to. I see that the European Society of Endocrinology has updated their practice guidelines on the treatment of adrenal incidentalomas, and I just wanted to find out what the implications are there. I think it's been a while since these have been updated, so just wanna kind of better understand what the implications could be there for, for usage of Korlym.

Joseph Belanoff (CEO)

Good. Good, Edward. thank, thank you for the question, and I'm gonna direct it to Sean again.

Sean Maduck (Endocrinology Division President)

Yeah, Ed, thanks for the, the question, and just adding on what Bill just, just spoke to. There's study after study after study, there's been mounting evidence over time that this, this illness is, is more prevalent. These European guidelines that were just updated are just another example of, of the evolution of the mindset around hypercortisolism. Endocrinologists recognize that hypercortisolism is more prevalent than once thought. What these guidelines do is that they encourage physicians to look harder for the disease, which is, which is great. The guidelines also highlight the use of the relatively simple dexamethasone suppression test, or the DST, as a testing standard, which is gonna support increased screening. These guidelines will influence and increase both screening and diagnosis of hypercortisolism patients.

Edward Nash (Managing Director and Senior Biotechnology Analyst)

Great. Thank you.

Joseph Belanoff (CEO)

Thank you, Edward.

Operator (participant)

One moment for our next question. Our next question comes from the line of David Amsellem with Piper Sandler. Your line is open.

David Amsellem (Managing Director and Biotechnology Senior Research Analyst)

Thanks. just have a few... first, wanted to ask a couple on miricorilant in NASH. I know, I know you're gonna have data at an upcoming medical meeting, but just thinking about the phase II-B, can you just talk about the contours of the design of that trial? Is it... I'm assuming we're gonna have liver biopsies in this trial. is this, is this something where you're thinking about as more of a phase II/III, and, or is this something where we should think about it as as you're still going to have to do a full phase III program beyond this phase II-B? That's number one. Number two is, as you think about miricorilant, strategically, is, is this something that you're gonna look to partner down the road?

Is this something that you're going to look to keep and commercialize? Where does it fit in the broader business, particularly given the comments about other cortisol modulators that you're looking at that you haven't disclosed? Thanks.

Joseph Belanoff (CEO)

Yeah. Thanks, David. Then, two, two questions I think I understand. Bill, would you first describe the phase II-B miricorilant study, and then I'll discuss the business possibilities.

Bill Guyer (Chief Development Officer)

Absolutely. Hey, thank you for that question. As we progress towards our phase II-B program, let me back up a little bit. One, we just completed a great advisory board at the EASL conference, which is the European Conference for the Study of Liver Disease, and we met with the top hepatologists in the world who have done research for every molecule in the NASH space for the past decades, and I've known them for many decades as well. As we reviewed all the phase II-A data from our original study and all the phase II-B or phase I-B data, they were really impressed with that, and they helped guide us in designing our phase II-B trial. That was really encouraging as we moved forward.

That phase II-B trial right now, as our study, is a biopsy-confirmed NASH study in patients with NASH. This study will be a double-blind, placebo-controlled trial evaluating 150 patients randomized to miricorilant 100 mg twice weekly or placebo for 48 weeks. This is intended to be a phase II-B study, and based upon those results, we will then progress and design a phase III trial.

Joseph Belanoff (CEO)

David, you know, the, the second question is, is an interesting one, and I just for a variety of reasons, particularly-... for those who've followed Corcept for a long time. I mean, as you know, most of the things, starting with Cushing's syndrome, that we've worked on have been orphan diseases, niche markets, you know, very obvious clinical need, but to a relatively small group of patients. NASH is, of course, a different story. The number of people in the United States with fatty li- liver disease is very large, as, and, and a sizable percentage of them have NASH, which progresses to worse things than that. It's a big market.

I don't know if, you know, sort of the older term, primary care market, is the right way to describe it, but there's certainly a, a market with many, many patients in it. It's a good question, and one that we've thought about a lot. Is this something that we can do on our own, as we have with the other diseases we've looked at? Or is this, is this a disease space where we'll need to partner? I don't really know the answer to that at this point in time, but what I will tell you is that we are not in need of anyone else's money to support the development plan. If we decide that commercialization is better with a partner, we'll go in that direction.

I think we're really in a lucky space because of our profitable business and our, you know, long-term profitable business, that we can take this as far as we want, and should we partner, we'll be at a place where it's clearly advantageous for us to do so. You know, I'll end it with a simple answer. That decision has not yet been made.

David Amsellem (Managing Director and Biotechnology Senior Research Analyst)

Okay, that's, that's helpful. If I might sneak in an additional question just on CATALYST. As you get learnings from from the study, and, and, you know, particularly the, the answers that that you're looking for, which is the Cushing's syndrome and hypercortisolism is more prevalent in, in raising awareness among diabetologists. Do you think about calling on a sizable group of diabetologists in your rollout and, and broader commercialization of relacorilant? In other words, is, is this going to be a, you know, a, a bigger, splashier, more expensive, wider launch into a wider group of, of physicians? Thanks.

Joseph Belanoff (CEO)

Sean?

Sean Maduck (Endocrinology Division President)

Yeah, no, thank you for the question. Look, we're in the process of, of really working through that now to understand what the most effective way will be for us to launch relacorilant. We do recognize that these patients aren't in more than just endocrinology practices. Diabetologists, in general, are endocrinologists, but there's cardiologists showing up in some primary care offices sort of throughout, throughout the country. We are right now working on trying to figure out scalable ways that we can get this message to physicians so that they can be educated appropriately.

Joseph Belanoff (CEO)

Yeah. I appreciate the question, David, particularly because we have been thinking about that. You know, I think at some point, you know, maybe a decade ago, we thought that the patients with Cushing's syndrome were likely to be treated by really a very, very small number of endocrinologists. We do not think that is true anymore. We think they're distributed a much larger group. Making sure that these patients get the optimum treatment is really. That's our ethos, that's what we really want to get to. How it translates to practical matter is absolutely on our mind.

David Amsellem (Managing Director and Biotechnology Senior Research Analyst)

Good. Thanks a lot.

Joseph Belanoff (CEO)

Thank you, David.

Operator (participant)

One moment for our next question. Our next question comes from the line of Roanna Ruiz with Leerink. Your line is open.

Roanna Ruiz (Senior Managing Director and Biotechnology Analyst)

Hi. Afternoon, everyone. A couple from me, maybe on tagging on a question about your revenue guidance for a second. I was curious, what are some of the pushes and pulls that could get Korlym revenues closer to the higher end or the lower end of this range, in your view?

Joseph Belanoff (CEO)

Sean, please take that.

Sean Maduck (Endocrinology Division President)

Yeah, thank you for the question. Look, our guidance, it's pretty simple, is driven by the number of patients on medicine. We have more patients taking Korlym than ever before, and we expect there to be more in the future. We have a number of initiatives underway, and we're expecting them to impact the second half of the year. The more patients that are prescribed Korlym, the higher the end of the range it will be. If it's a little bit fewer, it'll be on the lower end.

Joseph Belanoff (CEO)

It's really, it's really as simple as that. There aren't other factors besides the number of patients that are really very appreciable.

Roanna Ruiz (Senior Managing Director and Biotechnology Analyst)

Got it. Okay. Wanted to ask a bit about your field force. I know you have... You've reached the target of 60. Are you thinking of possibly expanding that later this year or maybe into next year? What type of launch metrics are you looking for to help you make that kind of decision?

Joseph Belanoff (CEO)

Sean, please.

Sean Maduck (Endocrinology Division President)

Yeah, it's a great question. I'll start by saying we're, we're always evaluating the effectiveness of, of the team and, and looking to see what is the appropriate size. I think stepping back in time a little bit, through the pandemic, we felt that it was very important for us to maintain the stability of that team. Over the last year, we've taken a very hard look, and that's where we've made changes. We've strengthened and streamlined our training program with the goal of making our current clinical specialists more productive and our newer clinical specialists more productive more quickly. We've also, as you just alluded to, added top talent to the team.

In terms of the current size of the team, we're actually currently in the mid-50s, and we are continuing to add clinical specialists throughout the country. Right now, our target is 60, but we're unlikely to stop there. If we can continue to find top talent, we will be adding it to the team, and as we continue to evaluate what the future looks like, we'll determine if we need to go beyond that.

Roanna Ruiz (Senior Managing Director and Biotechnology Analyst)

Got it. Thanks.

Joseph Belanoff (CEO)

Thank you, Roanna.

Operator (participant)

One moment for our next question. Our next question comes from the line of Joon Lee with Truist. Your line is open.

Joon Lee (Managing Director and Senior Biotech Analyst)

Hi, congrats on the strong quarter, and thanks for taking our questions. I'm particularly intrigued by your phase IV CATALYST study of Korlym in difficult to treat diabetics. How are you making the determination of hypercortisolism and advancing them to the randomized portion of the trial? How deployable is that screening for hypercortisolism by generalists and endocrinologists who treat diabetics? Lastly, what is the endpoint in the randomized portion, and is a positive result there sufficient to get a labeled, labeled indication for diabetics? I have a follow-up.

Joseph Belanoff (CEO)

Yeah. Well, well, Joon first, welcome or welcome back. Nice to hear from you. I think that Bill has best, best got his arms around, I think, all of that information, so I'm gonna turn it over to him.

Bill Guyer (Chief Development Officer)

Thanks for the question. When we look at CATALYST, we designed it specifically, again, and collaboratively with top diabetologists and endocrinologists to make this as simple and easy as possible, and it's now aligned with the guidelines as we spoke about earlier. We've just deployed a simple test of one DST, a dexamethasone suppression test, and looking for those patients with a DST greater than 1.8. Those are the patients who are then positive, who then can qualify and be screened for or enrolled into the randomized, double-blind, placebo-controlled trial of Korlym. In that trial, the primary endpoint is just to look at a difference between glucose control between Korlym and that of placebo, and that will be our primary endpoint. Related to, will it change the label of Korlym?

It's already consistent with the label of Korlym, because when you look at the Korlym indication, Korlym is indicated to control hyperglycemia secondary to hypercortisolism in adult patients with endogenous Cushing's syndrome who have type 2 diabetes.

Joon Lee (Managing Director and Senior Biotech Analyst)

Wow, excellent. Thank you.

Joseph Belanoff (CEO)

Joon, I think you asked just another small question, which was, is that, is the dexamethasone suppression test something that doctors in usual practice can undertake? The answer is yes.

Bill Guyer (Chief Development Officer)

Yes.

Joseph Belanoff (CEO)

It's not a hard test to run.

Joon Lee (Managing Director and Senior Biotech Analyst)

Great. Thank you. If, if, if CATALYST is positive, then would you need to run a trial using relacorilant in difficult to treat diabetics to get the similar use commercially? If not, either way, actually, you know, would, would dosing be different, with or some aspect of the drug be different between, you know, the Cushing's patients and diabetics to maybe get different pricing, given the different, you know, opportunities?

Joseph Belanoff (CEO)

I just wanna make sure to clarify this. All of these patients' disease is hypercortisolism, and diabetes or glucose intolerance is secondary to their hypercortisolism. It is what is causing their hypercortisolism. In some sense, there's no difference except for degree of illness between these patients, and some of them actually can be quite ill. I, I just wanna make that distinction. This is not diabetes in general. These medicines, whether it's Korlym or relacorilant, are not for diabetes in general. They're for the treatment of hypercortisolism, where diabetes appears as a prominent manifestation of hypercortisolism.

Then to answer your question about would we use relacorilant, I see no reason to repeat this study. I see this CATALYST as a landmark study that would easily apply to relacorilant. I'll remind you, relacorilant, we're looking for an indication, a full indication for hypertension and diabetes, not just diabetes.

Joon Lee (Managing Director and Senior Biotech Analyst)

Great. looking forward to the progress and data. Thank you.

Joseph Belanoff (CEO)

Thank you, Joon.

Operator (participant)

One moment for our next question. Our next question comes from the line of Swayampakula, Ramakanth with H.C. Wainwright. Your line is open.

Ramakanth Swayampakula (Managing Director and Senior Equity Analyst)

Thank you. This is RK from H.C. Wainwright. Good afternoon, Joe, Atabak.

Joseph Belanoff (CEO)

Hi, RK.

Bill Guyer (Chief Development Officer)

Hi, RK. [crosstalk]

Ramakanth Swayampakula (Managing Director and Senior Equity Analyst)

Most of my questions have been answered, but I have a quick question on clinical data expectations for the rest of the rest of this year.

Joseph Belanoff (CEO)

I'm sorry, I didn't quite understand your question, RK. I apologize.

Ramakanth Swayampakula (Managing Director and Senior Equity Analyst)

I'm just trying to understand what sort of clinical data could we expect in this year, you know, from here to the end of the year?

Joseph Belanoff (CEO)

Yeah, I'm gonna turn you over. Now I understand your question. Bill, Bill, would you please answer that?

Bill Guyer (Chief Development Officer)

As I look at all the studies that are ongoing, the one study that I could see that we are planning to submit to a conference in the fourth quarter of this year would be the NASH phase I-B data. That is our plan to present that data hopefully at that conference. CATALYST will be close. You know, we're ahead of schedule. I would say it's probably first quarter of next year, but we could see results from the screening and prevalence study later this year in December.

Joseph Belanoff (CEO)

Yeah, I'm just, I'm just gonna underscore that. I think what you can count on is the phase I-B results. NASH, we will have that. Everything else falls into the next year, often the early part of next year, but in 2024.

Ramakanth Swayampakula (Managing Director and Senior Equity Analyst)

Thank you.

Joseph Belanoff (CEO)

You're welcome.

Operator (participant)

One moment for our next question. Our next question comes from the line of Alan Leong with BioWatch. Your line is open.

Alan Leong (Co-Founder and Senior Research Analyst)

Hey, everyone. Glad to be here, and congratulations on the ongoing work.

Joseph Belanoff (CEO)

Well, Alan, it's wonderful to hear from you. What may we help you with today?

Alan Leong (Co-Founder and Senior Research Analyst)

Well, I have a few questions. Thank you for your generosity in having me. What can you tell us about the dynamics of safety and efficacy in liver fat with miricorilant? What have you learned? What, you speculate that liver impairment level is a significant covariate.

Joseph Belanoff (CEO)

Hey, I apologize. It's a poor connection. Could somebody, could you repeat Alan's question?

Atabak Mokari (CFO)

I couldn't hear it. I'm sorry.

Joseph Belanoff (CEO)

I really apologize, Alan. We really just couldn't hear you.

Alan Leong (Co-Founder and Senior Research Analyst)

Oh, sorry about that. Yeah, I'm using these earbuds. Yeah, is this better?

Joseph Belanoff (CEO)

Yes.

Alan Leong (Co-Founder and Senior Research Analyst)

Okay. What can you tell us, What can you tell us about what you've learned about the dynamics of miricorilant with safety and efficacy in liver fat?

Joseph Belanoff (CEO)

Okay.

Alan Leong (Co-Founder and Senior Research Analyst)

For example-

Joseph Belanoff (CEO)

I'm just gonna repeat the question. Okay.

Alan Leong (Co-Founder and Senior Research Analyst)

Yeah.

Joseph Belanoff (CEO)

Yeah. What, what have we... The question was, what have we learned about the dynamics of miricorilant in terms of efficacy and safety?

Bill, could you please talk to that?

Bill Guyer (Chief Development Officer)

Key pieces there, you know, we, we've, we've reviewed the, you know, phase II-A data, again, using 600 and 900 mg, and we saw those dramatic fat redu-- liver fat reductions in a month corresponding with rises in liver enzymes, that's what allowed us to then explore various lower doses and different dosing regimens in phase I-B. As we have studied various different dosing regimens, we really have determined it's the rapidity of the liver fat reductions, and we, we confirmed that when we reviewed all the data with our top advisors just about a month ago. We've determined that that liver fat re-- rapid reduction in liver fat is tied to that rise in increasing free fatty acids, which then causes mitochondrial dysfunction, which then in turn causes that liver enzyme irritation and elevation.

That's key because what we also saw is the liver is trying to metabolize all those free fatty acids, it actually can metabolize those because we're not seeing any dumping of fat into the into the bloodstream. Because in our study, we're seeing lowering effects on triglycerides, LDL, and VLDL. But importantly, we also saw that if we can slow that down, and we saw that with the 100 mg twice a week dose, that when we slow that down, we see a steady decline up to 12 weeks, and we saw that 30% reduction in liver fat with no rises in ALT or AST. We actually saw decreases in those liver enzymes, and so that's really what we've learned. We've done many analysis looking at the slope of decline, percentage of decline.

It all matches up that it really is tied to the rapidity of liver fat reduction. We believe we've solved that problem, which is why we're going to phase II-B.

Alan Leong (Co-Founder and Senior Research Analyst)

Of the next set of questions, of the following three programs, which do you think has the greatest gap in understanding from your audiences? That you kinda go there and you go, "Wow, we have a little chasm in education to do." Feel free to split the investor community versus the life science specialist. Ovarian cancer versus... Go ahead.

Joseph Belanoff (CEO)

Yeah, no, I, I just wanna repeat your question as I understand it, which is, you know, of our programs, which do we think-

Alan Leong (Co-Founder and Senior Research Analyst)

Yeah.

Joseph Belanoff (CEO)

... is sort of least recognized by the investor community?

Alan Leong (Co-Founder and Senior Research Analyst)

Yeah.

Joseph Belanoff (CEO)

If, if, if that's essentially a distillation of your question, yeah, I, I, I, I get it, because I think one of the things that's, that's surprising, I think, to people until they really dig into the science, and as, and as you know, you know, sort of a recovering academic, so I'm really all about the science. Is how broad a platform cortisol modulation is. Cortisol goes into every tissue in the body, so it really has the potential to affect many disease states. It's, in some sense, obvious why a drug like Korlym or relacorilant would be effective in Cushing's syndrome. I think it's initially a little less obvious why it might be effective in a neurologic disease like ALS or a disease like cancer or you know, a variety of cancers.

I think that the interesting thing for us is that there are individual investors who seem to appreciate, kind of individually, parts of the story. I think that there are few, and I think this is going to change over time, who really understand the global application of cortisol modulation to the whole platform. I don't think it's a question of any individual program, particularly being unrecognized. I think that it's just that some people recognize one program, some people recognize another program, and I'm really hoping to see over time, is that people can actually connect all of those things because they really are connected. I'll give you just one sort of personal example from that, is that, you know, every 4 years, we conduct a conference with all of our collaborators.

As you know, we have many academic collaborations at any given time, 35 or 40 of them. They're all over the world, they're preclinical, and they're clinical, and we bring those people together, as you said, one time, you know. Many times, they're unaware of the other work that people are doing, even though they're all working in cortisol modulation. It's our mission to make sure that people really understand this entire platform. I hope that, as I said, even investors who I know are, are busy people, really take the time to appreciate the global potential of these programs.

Alan Leong (Co-Founder and Senior Research Analyst)

Well, thank you very much. The future is bright for both of us. Thanks.

Joseph Belanoff (CEO)

Okay. Thank you very much, Alan. I think with that, we're, we're out of questions. Look forward to talking to everybody, 3 months from now, and hope you enjoy the rest of your summer.

Operator (participant)

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