Corcept Therapeutics - Q4 2023

Transcript

Operator (participant)

Good day, and thank you for standing by. Welcome to the Corcept Therapeutics conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there'll be a question-and-answer session. To ask a question during the session, you will need to press star 11 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 11 again. Please be advised today's conference is being recorded. I would like to turn the call over to Atabak Mokari. Please go ahead.

Atabak Mokari (CFO)

Hello everyone. Good afternoon, and thank you for joining us. Today we issued a press release announcing our financial results for the Q4 and providing a corporate update. Copy is available at corcept.com. Our complete financial results will be available when we file our Form 10-K 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 might cause actual results to differ materially 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 Q4 of 2023 was $135.4 million, an increase of 31% compared to the Q4 of the prior year. We expect our revenue growth to continue, and we're reiterating 2024 revenue guidance of $600-$630 million compared to 2023 revenue of $482.4 million. Net income was $31.4 million in the Q4 and $106.1 million for the full year 2023. Our cash and investments at December 31st was $425.4 million. 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 to prevent it from marketing a generic version of Korlym in violation of our patents. The case went to trial in Federal District Court in September of last year. On December 29th, the court found that Teva's generic product would not infringe the two patents we had asserted against it. We believe the court's verdict is wrong and is based on a misunderstanding of the law. Accordingly, we are seeking its reversal by the Federal Circuit Court of Appeals. It is impossible to predict exactly how long the appeal will take. Briefing will be complete no later than May. Our opening brief is due March 9th. Teva will have up to 40 days after we file to respond. Our reply brief, closing the briefing cycle, will be due no later than 21 days after that.

These documents will all be publicly available on the internet at the PACER website. With briefing complete, the timing of oral argument and issuance of an opinion are entirely up to the court. Based on past practice, it's reasonable to expect oral argument in the Q4 of this year and a decision early in the Q1 of 2025. If we prevail, Teva would lose FDA approval of its product, at least until the expiration of our patents in 2037. We are eager 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 will now turn the call over to Joe Belanoff, our Chief Executive Officer. Joe?

Joe Belanoff (President and CEO)

Thank you, Charlie, and thank you everyone for joining us this afternoon. Atabak highlighted our strong commercial performance and the revenue guidance we have set for 2024. A few weeks ago, I had the opportunity to meet with our endocrinology team at our National Field Meeting. The enthusiasm about our prospects in hypercortisolism was palpable. We have the opportunity to help many more patients with Cushing's syndrome. We are reaching a tipping point of sorts, with the medical field increasingly understanding that hypercortisolism is far more prevalent than was previously assumed. Our ongoing Phase IV Catalyst study will reinforce this emerging understanding, and I believe the study will be a landmark in guiding the future screening and accurate diagnosis of patients with Cushing's syndrome. Catalyst is the largest clinical trial ever conducted to examine the prevalence of hypercortisolism in patients with difficult-to-treat type 2 diabetes.

Its investigators are, unquestionably, the country's top diabetologists. Today we announced preliminary results from the first 700 patients enrolled. Those results showed a hypercortisolism prevalence rate of 24%, far higher than many in the medical community have believed to be the case in this population. This is a two-part study. The prevalence portion of Catalyst continues to enroll patients. Those diagnosed with hypercortisolism can enroll in the treatment phase. The final results from the prevalence phase will be presented in a keynote session at the American Diabetes Association's annual meeting in June. The results of the Catalyst study will undoubtedly stimulate physicians to screen patients for hypercortisolism, and many more than are currently identified will be found. Corcept is well-positioned to help them.

For more than a decade, we have invested in patient advocacy and education and patient support services that are all based on understanding the journey and needs of an individual diagnosed with hypercortisolism. Our team is proud of these programs, and we are prepared to help what we know will be a growing number of patients in the years to come. As the awareness and diagnosis of Cushing's syndrome increases, we are working with a great sense of urgency to advance relacorilant. This sense of urgency comes from knowing that the compound has compelling efficacy without many of the significant side effects of Korlym. All of our proprietary compounds, including relacorilant, modulate cortisol's effects by binding to the glucocorticoid receptor, a receptor which is activated when cortisol levels are high. They do not bind to the progesterone receptor and therefore don't cause some of Korlym's most serious off-target effects.

We are evaluating relacorilant for the treatment of hypercortisolism in two phase III trials, GRACE and Gradient. We expect GRACE to serve as the basis for our NDA submission in Cushing's syndrome and to build on relacorilant's positive phase II efficacy and safety data. Patients experienced meaningful improvements in hypertension and glucose control, as well as the other signs of symptoms of Cushing's syndrome in the phase II study. Relacorilant did not cause progesterone-related side effects, including endometrial thickening or vaginal bleeding. Relacorilant also did not cause drug-induced hypokalemia. Progesterone-related side effects and hypokalemia are leading causes of Korlym discontinuation. Relacorilant's phase II trial results were published in Frontiers in Endocrinology in July 2021. 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 significantly higher risk of premature death. While we do not expect our NDA in Cushing's syndrome to depend on efficacy data from Gradient, we do expect the study to provide valuable information about the treatment of an etiology of Cushing's syndrome that affects many patients. It bears repeating that the first phase of our ongoing phase IV Catalyst study reinforces the findings from many smaller studies indicating that hypercortisolism is far more prevalent than was previously assumed. The findings from Catalyst will be entirely relevant to relacorilant as it emerges. As I said, we are working with great urgency, and we are on track to submit our relacorilant Cushing's syndrome NDA in the Q2. We are also studying relacorilant as a treatment for different types of cancer.

Our most advanced oncology program is in platinum-resistant ovarian cancer, a lethal cancer with few useful treatment options. There is great enthusiasm among the investigators participating in our phase III ROSELLA trial. Enrollment in the study will close shortly, and data will be available by the end of this year. The goal of ROSELLA is simply to replicate our positive phase II ovarian cancer trial results. ROSELLA's study design closely tracks our phase II study with a planned enrollment of 360 women. Women enrolled in the study are 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 the study in collaboration with leading clinicians from the Gynecologic Oncology Group, GOG, in the United States, and the European Network of Gynaecological Oncology Trial Groups, ENGOT, in Europe.

In our successful controlled phase II trial, relacorilant produced meaningful benefit to many women. While these women's disease had progressed on two or more previous lines of treatment, including previous taxanes, relacorilant appeared to resensitize their tumors to chemotherapy's beneficial effects. 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. 29% of the patients who took intermittent relacorilant were alive two years after study start versus only 14% who took nab-paclitaxel alone. The addition of relacorilant enhanced the effect of chemotherapy, likely by blunting cortisol's antiapoptotic effect.

Just as important, the women who received relacorilant plus nab-paclitaxel experienced no additional side effect burden compared to those who took nab-paclitaxel alone. The results from this study were published in the Journal of Clinical Oncology in June 2023 with an accompanying editorial. Results have been featured in podium presentations in the 2021 and 2022 European Society for Medical Oncology (ESMO) meetings and at the 2022 American Society of Clinical Oncology (ASCO) annual meeting. Leading gynecologic oncologists have told us that 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. A second mechanism by which cortisol modulation may prove useful is by blocking in an important tumor growth pathway.

Cortisol stimulation is a major reason why patients with prostate cancer treated with the 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 are enrolling a randomized, placebo-controlled phase II trial of relacorilant plus enzalutamide in patients with prostate cancer before these patients have had an initial prostatectomy. A third cortisol modulation 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 IB 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. While each of our compounds being evaluated in clinical studies selectively modulates cortisol activity, they are not identical, and 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 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 using the best-matched compound. One of these compounds, dazucorilant, has shown great promise in animal models of ALS, improving motor performance and reducing neuroinflammation and muscular atrophy.

As you know, ALS is a devastating disease with a very poor prognosis and limited options to halt or slow its progression. Our DASLS trial is a randomized, double-blind, placebo-controlled phase II trial of dazucorilant in patients with ALS. The primary endpoint is based on the ALS Functional Rating Scale. The speed of enrollment in DASLS exceeded our expectations. Enrollment will close shortly, with data available by the end of this year. Finally, I'll turn to our program in NASH, a serious liver disorder that afflicts millions of people in the United States. Miracorilant has demonstrated compelling early evidence as a treatment for NASH.

Our phase IB dose-finding study found that patients who received 100 milligrams of miracorilant orally twice a week for 12 weeks experienced a 30% reduction in liver fat, with improvement in liver enzymes, markers of fibrosis, and key metabolic and lipid measures, including HOMA-IR, serum triglycerides, and LDL. Importantly, miracorilant was also very well tolerated, with no apparent GI side effects. We look forward to building on these promising results in our MONARCH study, a randomized, double-blind, placebo-controlled phase IIB trial now actively enrolling patients with biopsy-confirmed NASH. The primary endpoint of the study is reduction in liver fat, with NASH resolution and fibrosis improvement as key secondary endpoints. In conclusion, we are extremely optimistic about the future of Corcept.

Our Cushing's syndrome franchise is built on a solid foundation, a foundation that is supported by scientific, medical, and commercial expertise that we have been strengthening and honing for over 20 years. Our strong commercial results reflect that physicians are more regularly screening for hypercortisolism and underscore our ability to support them as they manage this complex disease. We expect the findings from our Catalyst study to help physicians better identify and treat patients whose difficult-to-treat diabetes is caused by hypercortisolism, a population whose Cushing's syndrome too frequently goes missed or undiagnosed. Relacorilant has demonstrated tremendous promise as a treatment for patients with Cushing's syndrome, and we are on track to submit our NDA in the Q2. Beyond Cushing's syndrome, our development programs are generating increasing evidence that cortisol modulation has the potential to treat a wide range of diseases. Ovarian cancer, prostate cancer, ALS, and NASH are current examples.

We have a broad and active research portfolio of many proprietary selective cortisol modulators with potentially very different clinical attributes. We will continue to invest in understanding these attributes and their potential therapeutic applications, and we will advance the most promising compounds to the clinic. Over the course of this year, we expect data from our GRACE, Gradient, and Catalyst studies in Cushing's syndrome, our pivotal ROSELLA trial in ovarian cancer, and our DASLS trial in ALS. This is an exciting time for Corcept. I appreciate the efforts and dedication of our more than 350 employees who are working hard to achieve the ambitious goals we have set for ourselves. Before we take questions, I want to take a moment to introduce Roberto Vieira, who joined Corcept a few years ago.

Roberto, as President of our oncology division, is responsible for the commercialization of relacorilant in platinum-resistant ovarian cancer and the expansion of our oncology footprint. You'll have an opportunity to hear more from him over the course of 2024. Operator, let's proceed now to questions.

Operator (participant)

Thank you. If you would like to ask a question, please press star 11 on your telephone. As a reminder, please wait for your name and company to be called before you proceed with your question. One moment while we compile the Q&A roster. Our first question for the day will be coming from Matt Kaplan of Ladenburg. Your line is open.

Matt Kaplan (Managing Director and Senior Equity Research Analyst)

Hey, guys. Thanks for taking the questions. Just wanted to start off first with your reiterating your guidance of $600 million-$630 million for 2024. Can you give us a little bit more color in terms of, I guess, given the court's recent decision on the Teva case, why you're still confident and why you're reiterating the guidance that you had given before the court's decision?

Joe Belanoff (President and CEO)

Just one small point, but good to hear from you, Matt. Our guidance came after the court's decision, but we are reiterating it here. Sean Maduck, who's President of our endocrinology division, will take this question.

Sean Maduck (President, Endocrinology)

Yeah, Matt, thank you for the question. Our revenue guidance will always consider all the information that we have and our best estimates going forward. Our range includes a multitude of factors, including a potential Teva launch and its impact. We have reiterated the range of $600 million-$630 million because we're confident in our ability to both grow our Korlym business and to defend our market share.

Matt Kaplan (Managing Director and Senior Equity Research Analyst)

And then in terms of, I guess, maybe for Charlie, the legal update, you said that you remain confident in terms of being able to win the argument as you appeal the court's decision. Can you give us some more color in terms of where you think the court erred in this decision and why you think you'll be able to reverse it?

Charlie Robb (Chief Business Officer)

Yeah. I mean, unfortunately, Matt, I really can't share sort of our legal sort of deliberations as we work through. Obviously, I've given the matter a great deal of thought. But what I can say is what will really matter and what will be available to you and everyone is the briefs as we file it. And I'm really going to have to let them speak for themselves. And we'll shortly be submitting our brief, and you and everyone can take a look at it then. And that's really the most I can tell you at this point.

Matt Kaplan (Managing Director and Senior Equity Research Analyst)

Okay. Fair enough. And then, I guess, congrats on the initial results in the Catalyst study, 24% prevalence of hypercortisolism. That's higher than, I guess, we had expected. And how does this translate, help us translate this into potential market size and numbers of patients given that result?

Joe Belanoff (President and CEO)

Yeah. Matt, I'll take that question. I think it's just really critical for people to understand that many people thought that the answer to that prevalence rate was going to be 0 or 0 to a couple of %. Now, that wasn't borne out by earlier evidence. There were many studies over the last decade that indicated in this group of patients, patients who have otherwise refractory diabetes, difficult-to-treat diabetes, that the results were substantial. There were substantial groups of patients with that. But no one had ever attempted as large a study in the way we did it prospectively or, frankly, with the level of investigators who actually participated in this study. So I don't know exactly how that is going to reflect in what the final prevalence turns out to be. But what I can tell you is that it's substantially higher than what has previously been assumed.

What's been previously assumed, I'll remind you, because we said it many times on this call, there were about 20,000 patients who had Cushing's syndrome, and about half of them were cured with surgery. It's very clear to us right now that the actual overall prevalence for Cushing's syndrome is considerably higher than that.

Matt Kaplan (Managing Director and Senior Equity Research Analyst)

All right. Well, I'll jump back in the queue. Thanks for taking my questions.

Joe Belanoff (President and CEO)

Thank you, Matt.

Sean Maduck (President, Endocrinology)

Thanks, Matt.

Operator (participant)

Thank you. One moment for our next question. Our next question is from Xinwei An of Canaccord. Your line is open.

Xinwei An (Equity Research Associate)

Hi, team. Congrats on the results, and thank you for taking the question from us. So we understand that when a patient stops taking Korlym, the cortisol levels begin to rebound within 4-5 weeks. And the randomized risk growth in the GRACE study is 12 weeks. So how confident are we that a statistically significant difference in the changes of blood pressure would be observed during that 12-week window?

Joe Belanoff (President and CEO)

I'm not sure I really understood the question. So please tell me if in the end I haven't answered what you've said. But I think the question had to do with, for patients who are successfully treated with Korlym, how long does it take for stopping, when you stop Korlym, for their effects of the Korlym effects to rebound? And now, remember, we're talking at this moment about Korlym, not relacorilant. Our experience was much quicker than, I think, what I heard you said. Usually, within a couple of weeks, we actually see rebound from patients who stop taking Korlym, which, frankly, is a compelling reason for the high adherence rate we see with Korlym, is that when they stop taking their medicine, they get pretty much worse pretty quickly. We actually expect the same sort of timeline with relacorilant as that.

Obviously, the study will give us the results for that. But we think that we have a more than substantial length of time in order to see the rebound effect that comes from not taking relacorilant in the upcoming study.

Xinwei An (Equity Research Associate)

Okay. Thank you.

Operator (participant)

Thank you. One moment for the next question. Our next question will be coming from David Amsellem of Piper Sandler. Your line is open.

David Amsellem (Managing Director and Senior Research Analyst)

Hey, thanks. So I just had a few. So I wanted to come back to the generic of Korlym. And I get your comments. I guess I just wanted to get more color on the barriers to generic adoption that you think are in place. In other words, the specialty hub that serves all of these sort of high touchpoints that are related to Korlym, is that something that ultimately proves to be a barrier to generics? And can you just talk about those dynamics? So that's number one. And then secondly, you're talking about filing, I'm sorry, filing in the Q2 on relacorilant, but you're also going to have top-line data in the Q2. So that's kind of a tight turnaround. So can you just talk about that and why you're confident you can file it so quickly?

Then lastly, are you going to be running any additional trials on relacorilant to tease out long-term health benefits? Can you just talk about additional clinical work you might do to support that product? Thank you.

Joe Belanoff (President and CEO)

Okay. So three different questions in three different areas, David. Thank you. The first one, I'm going to point to Sean to talk about how we run our endocrinology business. Go ahead, Sean.

Sean Maduck (President, Endocrinology)

Yeah. No, thank you for the question. And your question was specifically around sort of what we believe to be barriers to entry. And I'll just say that this is not your typical pharmaceutical market. And supporting Korlym patients is far more than just filling a prescription. And automatic substitution does not happen at a Walgreens pharmacy unlike you see in a lot of these cases. We have a very high-touch, tightly controlled model. Every prescription that is written kicks off multiple high-touch support initiatives to ensure that both the patient and the prescribing physician have the optimal experience. And the only other thing I'd add here is that we spent over 12 years growing this business. And we've done that through the development of a deep understanding of the market and by building very strong relationships with providers.

Korlym is a very promotionally sensitive drug, and we have all the pieces go through the initial part of the process of education of a physician through the filling of that prescription.

Joe Belanoff (President and CEO)

Charlie, would you take the question about the NDA, please?

Charlie Robb (Chief Business Officer)

Sure. Just a little background for those who don't know this process, as I'm sure David does, that a new drug application, which is what we're going to submit for relacorilant and Cushing's syndrome in the Q2, really is a, it's a substantial document. It's a lot of work. And so that's why David's asking a very good question. But I think what people also may not understand is that much of the information and analysis that you submit in the new drug application stems from work that is done years before the last patient leaves the pivotal study. So think of all of the preclinical research that's done, all of the phase 1 trials, the drug-drug interaction studies, the manufacturing development work. All this makes up a really substantial part of the NDA submission to the FDA. And we've been working on that for almost a year now.

So the reason we'll be able to submit this so quickly is that a great deal of the work will be complete before the last patient leaves the GRACE study. We will be ready therefore to file really promptly after that. That's why we're confident.

Joe Belanoff (President and CEO)

Thank you, Charlie. Bill Guyer, who's our Chief Development Officer, will answer the question about relacorilant and longer-term use.

Bill Guyer (Chief Development Officer)

Yeah. Long-term data. So thank you for that question. So there's a study that's actually ongoing that we don't talk about much. And it's a long-term extension trial. And so that is a study that is taking patients from our phase 2 trial. They can roll into the long-term extension trial. GRACE and Gradient, when they've completed those trials, they can roll into that long-term extension trial. At this point in time, we have patients out six years in that long-term extension trial. We're going to continue that study throughout to continue to provide long-term data on the safety and efficacy of relacorilant in patients with Cushing's syndrome.

Joe Belanoff (President and CEO)

Thank you, Bill. Next question, please.

Operator (participant)

Thank you. One moment for the next question. Our next question will be coming from Swayampakula Ramakanth of H.C. Wainwright. Your line is open.

Swayampakula Ramakanth (Managing Director and Senior Equity Research Analyst)

Thank you. This is Atabak from H.C. Wainwright. I have a few questions. So I'm going to kind of ask, if you don't mind, one at a time. The first one is on the guidance itself. So you're kind of guiding—if I take the midpoint—you're guiding for like a 27% increase from where we are now. And in 2023, you grew about 20%. So I'm just trying to understand the tremendous growth that you're expecting from where you are now. So what is included in that? How much of that is price increase? And in terms of market growth itself, where do you see that market growth coming from? Because in the Q4, we didn't see that jump, that quite of a rate compared to Q3.

Joe Belanoff (President and CEO)

Atabak, I think I got the questions a little bit difficult to hear. It sounded as if what you were asking was you'd like to know what are the components of the growth that we see currently in the market and where we think it's going in the future. I think that's about right. Now, it's not. Let us know, but I'll turn that over to Sean.

Atabak Mokari (CFO)

Yeah. No, thank you for the question. In terms of, I guess, the range, I mentioned earlier, it takes in a multitude of factors. And the biggest, obviously, right now is that we have more physicians prescribing Korlym and more patients being prescribed from each physician. Over the last year and growth that we see continuing, we've had new patients from both existing and new prescribers throughout the country. And we're really pleased with the result we've seen. It's been driven by improved field execution. And we're starting to see sort of early returns from some of the investments that we've made, both on the sales force side and on the disease education side. And one of the areas of growth on our business has been on the sales force expansion. And I wanted to update you on that.

In terms of where that team's at now, we're currently at about 70 clinical specialists. We're continuing to add clinical specialists throughout the country. Our target right now is 100. We're unlikely to stop there. We'll continue to add top talent as we find it throughout the country. But we believe that that expansion is going to also help drive growth.

Joe Belanoff (President and CEO)

Let me just sum that up for you, R.K. More doctors prescribing and more patients from each doctor. It's a trend which really got very strong towards the end of last year. We're seeing it continue as we speak.

Swayampakula Ramakanth (Managing Director and Senior Equity Research Analyst)

Is there a price increase included in this?

Joe Belanoff (President and CEO)

I couldn't hear the question.

Sean Maduck (President, Endocrinology)

But is there a price increase included in this? There's not an additional price increase included in the range for this year. We took a price increase on January 1st of this year, 9.49%. We realized about 6.5% of that. But there was no other price increase included in that number.

Swayampakula Ramakanth (Managing Director and Senior Equity Research Analyst)

Okay. And then on the diabetes population itself, talking about trying to understand a little bit more about how the Catalyst data is going to help you out. So to start off, in terms of the percent of population, the diabetes population who are considered difficult to treat, can you give us a number? What percentage of the diabetes population is considered that? And then do you need to how do you plan to include that into your label? Is this going to be? Do you need to file something, or how does it work?

Joe Belanoff (President and CEO)

Yeah. So I think the answer I think the first question you were asking, R.K., was, what percentage are difficult-to-treat diabetics? And that's specifically defined in the protocol, patients who have hemoglobin A1c despite having multiple treatments and optimal care, and those patients who've been on all of the modern medicine. We've been told by our experts, the diabetologists.

Swayampakula Ramakanth (Managing Director and Senior Equity Research Analyst)

No, that doesn't give percentage. That just defines who is considered that. But what percentage of population is that?

Joe Belanoff (President and CEO)

I'm getting there. The percentage of the diabetic population that's considered to be in that group, difficult to treat diabetics, is about a quarter.

Swayampakula Ramakanth (Managing Director and Senior Equity Research Analyst)

Okay. Thanks.

Joe Belanoff (President and CEO)

The second question, Sean?

Sean Maduck (President, Endocrinology)

Yeah. I'm happy to take the second question. So the question was, are we going to have to file to have this included within our label, this Catalyst patient population? These patients are already included in our label. I'm going to read you the label right now and sort of highlight exactly that fact. What's our label, our indication statement? Korlym mifepristone is a cortisol receptor blocker indicated to control hyperglycemia secondary to hypercortisolism in adult patients with endogenous Cushing's syndrome who have type 2 diabetes mellitus or glucose intolerance and have failed surgery or are not candidates for surgery. That is a clear and exact description of the patients that are in the Catalyst category.

Joe Belanoff (President and CEO)

Next question, please.

Operator (participant)

Thank you. One moment for the next question. We have a follow-up question from David Amsellem of Piper Sandler. Your line is open.

Joe Belanoff (President and CEO)

Go ahead, David. Yes, David. Please.

David Amsellem (Managing Director and Senior Research Analyst)

Yeah. Just a follow-up. So to the extent that the two other generics, Sun and Hikma, enter the market later this year, does that change how you think about your sales expectations, or does your $600-$630 contemplate three generic entrants by the second half of this year? Thank you.

Joe Belanoff (President and CEO)

We heard the question. Sean, please.

Sean Maduck (President, Endocrinology)

Yeah. Thank you. Yeah. Our guidance includes all those scenarios. I just want to state that we've been thinking about this for a long time. We've been prepared for this possibility since 2020. We have a plan in place. We will continue to revise that plan as we receive new market intelligence. As I said before, we're continuing to invest in our Korlym business. We're confident in our ability to both grow and protect the share that we have. But yes, all of those scenarios are included in our forecast.

David Amsellem (Managing Director and Senior Research Analyst)

Thank you.

Operator (participant)

One moment for the next question. Our next question will be coming from Joon Lee of Truist. Your line is open.

Joon Lee (Managing Director and Senior Biotech Analyst)

Hey. Thanks for the updates and for taking our questions. Yeah. So 24% of the quarter of 30 million diabetics in the U.S. is an attractive opportunity. But with the phase 3 GRACE not having hyperglycemia as an endpoint spelled out, represents a headwind to utilization of relacorilant in diabetics. Or do you think the data from the Gradient could be supportive there? And also, would the orphan pricing of Korlym or relacorilant be prohibitive in the utilization? And I have a follow-up.

Joe Belanoff (President and CEO)

Yeah. Joon, I'm very glad that you asked the first question because it really gives us an opportunity to really clarify what the situation is. Bill, could you please take that one?

Bill Guyer (Chief Development Officer)

So yeah. For the GRACE trial, we have a primary endpoint of blood pressure control and a secondary endpoint of glycemic control. And so what we do is we have a hierarchy. When we meet our blood pressure control, we plan to then have that as our primary endpoint. And therefore, we then move in that hierarchy to glucose control. And we expect to meet both of those endpoints. And we expect to have a robust response to both hypertension and diabetes control, as well as other comorbidities. And based upon meeting all those endpoints, we expect a broad indication for relacorilant.

Joe Belanoff (President and CEO)

Yeah. I think that's really an important thing. And I'm just going to emphasize that I don't have anything different to say than Bill said. I want to just underscore that. Our anticipated label for relacorilant is to treat Cushing's syndrome. There are many variables that we're measuring in that study. And in the hierarchy, hypertension is at the top of the list. But glucose intolerance is on that list, as are many other endpoints that describe Cushing's syndrome. I think it's probably 20 different endpoints because Cushing's syndrome is a syndrome caused by excess cortisol activity. Cortisol goes everywhere in the body. And many things go wrong when people have Cushing's syndrome. Now, you asked a really interesting question about price as we go forward. And that really is something that we really have to think about as the market enlarges and enlarges and enlarges.

And we don't know as someone answered to an earlier question exactly what the market size is. But we will certainly take all those things into account as we go forward. One thing I want to just emphasize at this point is that we have not seen a single bit of influence yet from the Catalyst information, not a patient. So it'll be very to see where that goes time.

Joon Lee (Managing Director and Senior Biotech Analyst)

All right. Looking forward to the full data. On generic, are you seeing any impact to Korlym since Teva's generic launch six weeks ago? Have you or do you plan to institute any new sales strategy in response to generic launch? Thank you.

Joe Belanoff (President and CEO)

Joon, I'm going to give you back to Sean for that question.

Sean Maduck (President, Endocrinology)

Yeah. No, Joon, thanks for the question. There has been no impact to our business since Teva announced its launch. We have seen no evidence of generic mifepristone in the marketplace. And we're monitoring daily. And to your second question, I'm not going to go into any specifics. But again, we've been prepared. We have a plan in place. And we're to follow.

Joon Lee (Managing Director and Senior Biotech Analyst)

Thank you.

Operator (participant)

Thank you. There are no further questions in the queue.

Joe Belanoff (President and CEO)

All right. Well, thank you, everybody. I look forward to a three-month commute and speaking with you again. Hope you have a good rest of the winter and early spring.

Operator (participant)

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