Good day, everyone, and welcome to the Corcept Therapeutics Conference Call. Today's conference is being recorded. At this time, I'd like to turn things over to Mr. Charlie Robb, Chief Financial Officer. Please go ahead, sir.

Good afternoon. Today, we issued a press release announcing our financial results for the first quarter and providing a corporate update. A copy is available at corcept.com. Complete 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 through May 18 at 888-203-1112 in the United States and 719-457-0820 internationally. The pass code will be 2827359. Statements during this call, other than statements of historical fact, are forward-looking statements based on our plans and expectations that are necessarily subject to risks and uncertainties, which might cause actual results to differ materially from those such statements expressed or implied. These risks and uncertainties include, but are not limited to, our ability to operate our business and achieve our goals during the COVID-19 pandemic and thereafter; generate sufficient revenue and cash reserves to fund our commercial operations and development programs; the availability of competing treatments, including generic versions of Korlym, the initiation or outcome of litigation, our ability to obtain acceptable prices or adequate insurance coverage and reimbursement for Korlym, and risks related to the development of our product candidates, including their clinical attributes, regulatory approvals, mandates, oversight and other requirements, and the impact of the COVID-19 pandemic on our employees, consultants and vendors, as well as on physicians, patients, insurers, regulators and the practice of medicine generally. These and other risks are set forth in our SEC filings, which are available on our website and the SEC's website. On this call, forward-looking statements include those concerning our 2020 revenue guidance, cash flow, and our expected growth, impact of the COVID-19 pandemic on our commercial operations, financial performance, clinical development programs, physician awareness of hypercortisolism and the selection of Korlym as the optimum medical treatment. The timing, cost and outcome of litigation including our lawsuit against Teva Pharmaceuticals and Sun Pharmaceuticals, and Teva's challenge to our intellectual property before the Patent Trial and Appeals Board, the scope and protected power of our intellectual property, the progress enrollment, timing, design and results of our clinical trials, and the clinical and commercial attributes of relacorilant, exicorilant, miricorilant and our other selective cortisol modulators. We disclaim any intention or duty to update forward-looking statements. Our revenue in the first quarter was $93.2 million, a 44% increase from the first quarter of 2019. We've maintained our 2020 revenue guidance of between $355 million and $375 million. First quarter GAAP net income was $30.1 million, compared to $18.3 million in the same period last year. Excluding non-cash expenses related to stock-based compensation and the utilization of deferred tax assets, together with related income tax effects, non-GAAP net income in the first quarter was $41.2 million, compared to $24.3 million in the first quarter of 2019. Our cash and investments increased $33.7 million in the first quarter to a balance of $349 million at March 31. Now, a brief legal update, in February, we prevailed on a challenge to the validity of one of our patents. The 348 patent brought before the Patent Trial and Appeals Board or PTAB by Neptune Generics, a subsidiary of the litigation finance firm Burford Capital. Neptune had threatened to attack the 348 patent unless we paid Neptune a substantial fee. We refused. As I reported on our last call, we won. The PTAB found every claim of the 348 patent to be valid. I'm pleased to report on this call that Neptune did not appeal the PTAB's decision. The matter is now closed. Our rights were wrongly attacked and we defended them. The 348 patent will continue to play its part in our lawsuits against Teva and Sun, its validity bolstered by the PTAB's ruling in our favor. In March 2018, we sued Teva Pharmaceuticals to stop it from marketing a generic version of Korlym that would violate our patents. Our lawsuit stayed final FDA approval of Teva's proposed product until August 1 of this year, as we have been issued additional applicable patents over the past two years, we have asserted them against Teva. Our separate actions have now been consolidated as we expected into a single lawsuit trial scheduled to begin February 2, 2021. Discovery is now underway. Teva is also challenging the validity of one of our patents, the 214 patent, in a proceeding before the PTAB known as a post-grant review, PGR for short. Oral argument will take place in September. There will be a decision this November. The losing party in a PGR may appeal to the Federal Circuit Court of Appeals, during which time those portions of the PTAB decision that are under appeal will have no effect. Appeals to the Federal Circuit usually take about one year to resolve. As soon as we expect definitive resolution of the PGR is the fourth quarter of 2021. In addition to Teva, Sun Pharmaceuticals is seeking to market generic Korlym. Our patent infringement suit against Sun has stayed FDA approval of Sun's proposed product until the earlier of December 8, 2021, and the decision by the district court that the patents we have asserted against Sun are invalid or unenforceable or not infringed. Despite obvious overlap and subject matter and legal issues, our speak with Sun is separate from our litigation against Teva and is following its own timeline. A Markman hearing in the Sun case is set for November of this year. A trial date has not been set. The impact of the COVID-19 pandemic on the timing of these disputes is impossible to know with certainty. The PTAB has said it does not expect delays, which is not surprising. The patent office conducts much of its work including PTAB hearings remotely. We expect to receive a ruling in our PGR in mid-November as originally scheduled. Predicting the ultimate timing of our district court litigation is more difficult. The court hearing our Teva and Sun lawsuits has not delayed the February trial with Teva or November Markman hearing in the Sun case and we are preparing on the assumption there will be no delays. That being said, when pandemic-related restrictions ease, all courts will face a backlog of matters that take precedence over civil suits such as ours, criminal cases, for example. I would not be surprised if our litigation timelines are extended. But of course that is for the court to decide. And we will be ready whether there are delays or not. We are confident in our intellectual property and look forward to putting our case before a judge. I will now turn the call over to Dr. Joseph Belanoff, our chief executive officer, Joe.

Thank you, Charlie. Corcept had an excellent commercial quarter, despite obstacles posed by stay-at-home orders and other measures to protect public health. Our clinical specialists, medical science liaisons, patient advocates, operations team, and specialty pharmacy made sure patients taking Korlym got their medication. COVID-19 poses an especially serious risk to patients with Cushing's syndrome. Excess cortisol activity suppresses the immune system. Patients with Cushing's syndrome are four to five times more likely to suffer severe infections, putting them at exceptionally high risk for COVID-19. They are also more likely to experience blood clots, another leading cause of morbidity and mortality in patients with COVID-19. While it's always important that patients with Cushing's syndrome be diagnosed and optimally treated, it is especially important now. It's hard to predict how the pandemic will affect our commercial business for the rest of the year. The risks COVID-19 poses to patients with Cushing's syndrome are likely to increase demand for Korlym. At the same time, restrictions imposed by state and local governments, hospitals, and individual medical practices make it very difficult to work with physicians in person. Some of the imaging centers and laboratories physicians use when diagnosing patients with Cushing's syndrome and titrating to an optimum dose of Korlym are closed. Many patients are hesitant to leave their homes, even to visit the doctor. These factors are likely to reduce the rate at which new patients are introduced to Korlym and make it more difficult for physicians to monitor patients following dose titration. However, as physicians and patients adapt to a world in which COVID-19 is endemic, as they are beginning to do, the impact of these factors may diminish. We reaffirm our 2020 revenue guidance of $355 million to $375 million, based on our strong first-quarter results and our best estimate of how the factors that determine our revenue, pandemic-related and otherwise, will evolve over the coming months. As many of you know, we are conducting a Phase III trial of relacorilant, our planned successor to Korlym as a treatment for patients with Cushing's syndrome. The trial is known as GRACE. Our goal for GRACE is to confirm the positive efficacy and safety findings of relacorilant's Phase II trial in which patients exhibit meaningful improvements in glucose control and hypertension to Cushing syndrome's most pernicious manifestations, as well as an important secondary endpoints without instances of Korlym significant off-target effects. Our poster presentation of relacorilant's Phase II results can be found at the investors slash past events tab of our website. We believe relacorilant will constitute a major medical and commercial advance. While its Phase II efficacy data are comparable to Korlym's at the same time points in Korlym's pivotal trial, relacorilant promises to offer significant safety benefits. Korlym's affinity for the glucocorticoid receptor, GR for short, makes it a highly effective treatment for patients with Cushing's syndrome. Unfortunately, Korlym is not selective for the GR. It also binds to the progesterone receptor, which causes endometrial thickening and vaginal bleeding in many women, regardless of age, and requires Korlym's label to carry a black-box warning, the most serious medication warning required by the FDA for termination of pregnancy. By different mechanism, Korlym causes hypokalemia, low potassium, a manageable but potentially serious side effect that was experienced by 44% of patients in Korlym's pivotal trial and as a leading cause of discontinuation for patients taking the medication. Unlike Korlym, relacorilant is a selective GR modulator with no affinity for the progesterone receptor. It does not cause endometrial thickening or vaginal bleeding. It is not the abortion pill. In addition, we saw no instance of the drug-induced hypokalemia in relacorilant's Phase I or Phase II studies. These are side effects physicians and patients would strongly prefer to avoid. The COVID-19 pandemic has slowed the pace of enrollment in GRACE and delayed the opening of the last few of our planned 65 clinical trial sites. As public health restrictions ease, we expect our remaining sites to open and full enrollment to resume this fall. We now plan to submit our NDA in the second quarter of 2022. This quarter, we will start the Phase III study of relacorilant in patients whose Cushing syndrome is caused by an adrenal adenoma or adrenal hyperplasia. The study is called GRADIENT, G-R-A-D-I-E-N-T. It will be the first randomized double-blind placebo-controlled trial in patients with this etiology of Cushing's syndrome. GRADIENT has a planned enrollment of 130 patients at 60 sites in the United States and Europe. Participants will receive either relacorilant or placebo for six months, with the primary endpoints being improvements in glucose metabolism and hypertension. Many of the investigators for GRACE will also participate in GRADIENT. GRADIENT is part of our investment in the development of relacorilant to treat patients with hypercortisolism. It is not a required part of relacorilant's NDA. Our goal is simply to help inform and improve the treatment of patients with this type of Cushing syndrome. Our poster presentation of GRADIENT's design is available at the research and pipeline slash publications tab of our website. An abstract is also available in the April, May supplemental issue of the Journal of the Endocrine Society. I will now turn to our oncology program, which is examining three potential mechanisms by which cortisol modulation may benefit patients. Cortisol activity suppresses apoptosis, the programmed cell death chemotherapy is meant to cause, and tumors that express the GR. We are testing whether adding our selected cortisol modulator will correlate to chemotherapy will blend cortisol's anti-apoptotic effect, thereby allowing chemotherapy to achieve its full cancer-killing potential. Our goal is to confirm the striking data we presented in ASCO last year, where we reported results from our open-label trial of relacorilant plus nab-paclitaxel, Celgene's chemotherapy drug Abraxane. In our study, seven of 25 patients with metastatic pancreas cancer and five of 11 patients with advanced ovarian cancer had durable disease control, meaning their tumors either shrank or ceased growing for 16 weeks or longer. The duration of benefit in some patients was eye-catching. Two patients with metastatic pancreatic cancer exhibited tumor shrinkage for more than 50 weeks. One patient with ovarian cancer exhibited tumor shrinkage for 65 weeks. The tumors in all of these patients had progressed during multiple lines of prior therapy, including therapy with taxanes. Our poster presentation of these results is available at the investors slash past events tab of our website. Last year, we began a controlled Phase II trial of relacorilant plus nab-paclitaxel in patients with metastatic ovarian cancer, with a planned enrollment of 180 patients at 25 sites in the United States and Europe. The primary endpoint is progression-free survival, with secondary endpoints including overall survival and duration of benefit. Despite challenges arising from the COVID-19 pandemic, we continue to expect results of this study during the first half of next year. This quarter, we will start a Phase III trial of relacorilant in combination with nab-paclitaxel in patients with metastatic pancreatic cancer, a disease with a dire prognosis. This trial will be called RELIANT, R-E-L-I-A-N-T. RELIANT will be an open-label trial in which 80 patients receive relacorilant plus nab-paclitaxel, with the primary endpoint being the objective response rate assessed by resist criteria. We plan to perform an interim analysis on data from the first 40 patients. We believe sufficiently positive results could support accelerated approval. RELIANT will be conducted at 30 sites in the United States. Cortisol modulation may also benefit patients by bolstering their immune response. Cortisol is the body's natural immunosuppressant. This effect is often beneficial. It helps to prevent, for example, autoimmune disorders such as rheumatoid arthritis. In patients with cancer, however, cortisol activity suppresses the ability of the immune system to recognize and destroy tumor cells. It also blunts the cancer-killing attributes of immunotherapeutic agents such as checkpoint inhibitors. Next quarter, we are starting an open-label Phase Ib trial of relacorilant plus the PD-1 checkpoint inhibitor pembrolizumab in Merck's drug KEYTRUDA in 20 patients with metastatic or unresectable adrenal cortical cancer. Because their tumors produce cortisol, these patients also have Cushing's syndrome, which cortisol modulation can treat. Our trial examines what relacorilant can, in addition to treating Cushing's syndrome in these patients, specifically help immunotherapy achieve its maximum effect by reducing the immunosuppressive effects of excess cortisol activity. Finally, cortisol modulation may benefit patients with castration-resistant prostate cancer. Androgen stimulates the growth of prostate tumors, which is why androgen receptor antagonism with medications such as enzalutamide, Pfizer's drug Xtandi, is standard therapy. More recently, researchers at the University of Chicago and Sloan Kettering have shown that when colonies of prostate cancer cells are exposed to enzalutamide, growth is stimulated by cortisol activity at the GR. Our hypothesis is that a regimen combining a cortisol modulator with an androgen receptor antagonist will block this tumor escape route. Our selective cortisol modulator exicorilant is potent in animal models of castration-resistant prostate cancer. By the end of this year, we expect to select the optimum dose of exicorilant in combination with enzalutamide to bring forward in a controlled Phase II trial. In addition, a dose-finding trial of relacorilant plus enzalutamide is being conducted by investigators at the University of Chicago. I will conclude with an update of our program in metabolic disorders. As many of you know, we are developing our selective cortisol modulator miricorilant for the treatment of antipsychotic-induced weight gain and non-alcoholic steatohepatitis or NASH. Millions of patients rely on medications such as olanzapine to treat diseases such as schizophrenia and bipolar disorder. Unfortunately, these drugs cause serious metabolic abnormalities, including rapid weight gain and lipid disorders in nearly everyone who takes them. Patients are forced to make a terrible bargain, treating one dangerous disease but at the cost of acquiring another. Heart disease and stroke, not suicide, are the leading causes of death in patients taking antipsychotic medications. We conducted up to two double-blind placebo-controlled trials in healthy subjects in which miricorilant reduced weight gain caused by taking olanzapine or risperidone. Our results were published in the journals Advances in Therapy and Obesity. Unfortunately, we could not advance miricorilant further for this indication because miricorilant's quality has disqualified it as a treatment for common disorders. Miricorilant can be advanced because it is a selective cortisol modulator, with no affinity for the PR. It is not the abortion pill, and if approved, could be widely distributed. Miricorilant is more effective than miricorilant in animal models of antipsychotic-induced weight gain. And now our completed double-blind placebo-controlled Phase Ib study in healthy human subjects has demonstrated that miricorilant is active in reducing antipsychotic-induced weight gain in humans. In the first part of our Phase Ib trial, 66 healthy subjects received olanzapine and either 600 mg miricorilant or placebo for 14 days. Participants who received miricorilant gained less weight than those who received placebo. In addition, liver enzymes, markers of liver damage, increased less in patients who received miricorilant, suggesting that miricorilant has protective effects in the liver. In the second part of our trial, 30 healthy subjects received olanzapine and either miricorilant at 900 mg or placebo for 14 days. The results confirm our findings from the first part of the study: patients receiving miricorilant gained less weight and lower triglycerides and had less sharply elevated liver enzymes than subjects who received placebo. No side effects other than those commonly seen with olanzapine were seen with either dose of miricorilant. In fact, we plan to investigate considerably higher levels of miricorilant exposures in future studies. The full results of our Phase Ib study will be published later this year. Our double-blind placebo-controlled Phase II trial of miricorilant called GRATITUDE to reverse recent antipsychotic-induced weight gain is in progress. In this study, 100 patients with schizophrenia will continue to receive their established dose of antipsychotic medication in either 600 mg of miricorilant or placebo for 12 weeks. GRATITUDE will be conducted at approximately 20 centers across the United States. While the COVID-19 pandemic has effectively suspended new enrollment in this trial, we are confident enrollment will resume as public health restrictions ease. There's been no delay in our plans to start, by year-end, a placebo-controlled double-blind Phase II trial in patients with long-standing antipsychotic-induced weight gain. In this trial, we plan to test the formulation of miricorilant that we believe will achieve significantly higher exposures in miricorilant than will be reached in the GRATITUDE trial. Finally, in the first quarter of next year, we plan to start a double-blind placebo-controlled Phase II trial of miricorilant in patients with NASH, a serious liver disorder that affects millions of patients. In animal models, miricorilant prevents and reverses both fatty liver and liver fibrosis, which are precursors of NASH. We also intend to test our new, more potent formulation of miricorilant in this study. In conclusion, Corcept had an outstanding first quarter of revenue and profits. We increased our balance of cash and investments to $349 million. We have no debt. The COVID-19 pandemic has slowed enrollment and site activation in GRACE, our pivotal Phase III trial of relacorilant to treat patients with Cushing's syndrome. We now plan to file our NDA in the second quarter of 2022, two quarters later than we had originally planned. We now expect to start GRADIENT, our Phase III trial of relacorilant in patients with adrenal Cushing's syndrome this quarter. We continue to expect results of our controlled Phase II trial of relacorilant plus nab-paclitaxel to treat patients with metastatic ovarian cancer in the first half of next year. This quarter, we plan to start a Phase III trial called RELIANT of relacorilant plus nab-paclitaxel in patients with metastatic pancreatic cancer. We believe sufficiently positive results could support accelerated approval. Next quarter, we plan to start an open-label Phase Ib study of relacorilant combined with PD-1 checkpoint inhibitor pembrolizumab to treat patients with metastatic or unresectable adrenal cancer. Finally, by the end of this year, we expect to select a dose suitable for advancement of exicorilant in combination with enzalutamide to treat patients with castration-resistant prostate cancer. The second part of our Phase Ib trial of miricorilant to reduce weight gain caused by olanzapine has confirmed our earlier positive results. Our double-blind placebo-controlled Phase II trial of miricorilant to reduce recent antipsychotic-induced weight gain is open. We expect enrollment to resume as public health restrictions loosen. We plan to start a Phase II trial of miricorilant in patients with long-standing antipsychotic-induced weight gain by year-end as originally planned, using an improved formulation of miricorilant. We now plan to start our Phase II trial of miricorilant in patients with NASH in the first quarter of next year. I'll stop here for questions.

Thank you. We'll hear first today from Charles Duncan with Cantor Fitzgerald.

Hi, guys. Let's see. Hopefully you can hear me. Congratulations on a very good quarter and the recent IP update, Charlie and Joe.

Thank you, Charles.

Okay, good. You can hear me. Let's see. I had a couple of questions from on the Korlym side and then the pipeline. You've got a ton of things going on in the pipeline, and I'm interested to explore that. But first, before I do, let me ask you a question on the commercial side with regard to the revenue growth that you saw. Could you help us to understand better the contribution of demand versus, say, pricing and/or dose in the quarter?

Sure. Hey, Chad, this is Charlie, I'll answer that question. So just a little background for folks: Traditionally – historically – every first quarter, we face a headwind; our revenue faces a headwind due to a couple of factors, primarily the annual reauthorization process that insurers put their patients through, which results in patients receiving – sort of being, essentially their insurance being suspended. We work through those issues and provide them with free drug in the meantime and then get them back on paid drug, but our revenue takes a hit in the first quarter every year as we deal with that administrative hurdle. Also, in the first quarter, virtually all of our Medicare patients go through the Medicare doughnut hole, which we are obligated to cover about three-quarters of that cost. So that is another deduction to our revenue. As a result from absent price increase, our first quarter is typically flat or even down a little bit in terms of revenue. So with that as sort of background, I can tell you we took a 5% revenue increase at the start of the year that I think had the effect for the most part of counterbalancing that headwind. So that was the effect of a change in price. Now, the rest of the growth, I think, roughly speaking, think of it, it's about two factors at play. One is that insurance companies allowed patients – some insurance companies allowed patients to refill their prescription just a few days earlier than normal since the thinking was that in case there are logistical difficulties posed by the pandemic and say, Federal Express can't deliver on time, they didn't want patients to run out of medicine. So a very small minority of our patients received refills a few days earlier than they normally would. Roughly that's about half of the growth that you saw in the quarter. Roughly the other half was due to improved patient adherence. Patients just took their medicine more regularly than they normally do, and I'd describe that in sort of pandemic conditions. But I think that's sort of a medical fact that – perhaps, Joe would you like to elaborate on at all?

Yeah, I think that, as I think everybody knows, including myself, patients don't always take their medicine every day even when they're supposed to. And there are some medications that they take sometimes only half the time, which obviously is not what their doctor's intent. That's not really true with Korlym. Patients do take their medicine pretty much on schedule, but still days are missed. We saw very little of that in this quarter because I think that patients with Cushing's syndrome understood, and their doctors helped them understand that they are particularly high risk for infections, and frankly, the fear of contracting COVID-19, I think, added to that adherence percentage. Now, for us as a company, obviously we think that that's a very important benefit for patients. And we hope to really maintain that idea that this is medication that is best taken every single day that it's prescribed as we go forward.

Okay. Thanks, that's helpful Charlie and Joe. And given those dynamics, could you provide any granularity on, say, new patient – new diagnoses, new scripts in the quarter because Charlie mentioned adherence, so what about any additional patients?

Well, as you know, starting in March, virtually every medical practice in the country shut down visits for medical science – personal visits by medical science liaisons or clinical specialists. And I thought our commercial team really did a terrific job in instantly adopting the idea that there were some doctors who were still interested in being reached, but needed to be reached remotely. We were still even able to conduct various events where doctors could gain more information remotely. And a really interesting thing, I think, is that there are some – mainly a small minority of doctors who I think because of their own practices, and perhaps their own personalities actually seem to favor this remote contact as opposed to the standard in-patient contact. Now on balance, of course, that's not the case. I think that it's difficult for patients to get to the doctor right now. Diagnosing Cushing's syndrome involves a lot of testing. Everyone knows all those sort of things within the world. That being said, we did see new enrollments in the quarter, not as many as we expect to see in a restriction absent time, but we did see new enrollments and we continue to see new enrollments. And as I said, what we're really trying to do at this point in time is learn all the things that this worst experiment forces – really did force us to learn and incorporate them as we go forward as things loosen up.

Okay, it's helpful, Joe. And then if I could move on to the pipeline questions that I had, particularly with regard to relacorilant and GRACE timing. I think you provided a pretty good explanation on the kind of impact of COVID-19 on that. But can you provide us more information with regard to the number of patients that are enrolled or actual number of sites up and running and any other work needed for the NDA in terms of say long-term tasks or manufacturing process – the optimization?

Yeah. No, I think I understand the question, and let me just provide a few more details. One, although the addition of patients to the study basically slowed to a trickle or close to zero at some points, I think it's important for everyone to understand that the patients who are on trial continue to be seen by their physicians and so have marched their way through the study. It's very interesting decision primarily at academic centers, which I think was their best compromise was that patients who are already receiving medicine in the study should continue to receive the medications in the study, but they didn't really – with everything else that was going on, want to add new patients to their caseload at that point in time. Now, we had never actually given specific numbers that we have, but I think that you can add them up to understand sort of where we were, take your best estimate and where it's going to end up. And we really do feel confident at this point, that it's only – the data we've now given is essentially a two-quarter delay really encompasses everything we need to get done. But to your specific questions, yes, the long-term toxicology continued at pace; that's not an issue that will actually be done. What was the standard timeline before our manufacturing issues are – intended solutions moving along at their same pace. So really, the limiting variable for this study was already going to be the final efficacy and safety results and it's still going to be the case.

Excellent, one last question, and then I'll hop back in the queue is relative to your broader platform. You've got a lot of candidates in the clinic or soon to be, and I guess I'm kind of wondering, you've been at this medicinal chemistry for glucocorticoid receptor modulator game for a while. And when you consider the breadth of those efforts relative to other approaches, you've seen perhaps even recently or in the past, such as those by a recent IPO, could you compare and contrast your efforts versus others that have come along?

Yeah, broadly, I can. I mean, we've thought for a very long period of time, and it was basically my research career and my career coarser for the last 20 years that the cortisol modulation platform is an extremely important medical platform. Many diseases are affected by cortisol activity. And we really have found the research to the places where we think they can be best served by treatments and will continue to do that. We still have interesting programs that are even earlier in the pipeline because cortisol goes everywhere in the body and cortisol modulation really affects many, many different diseases. Now, Chad, as somebody who really has followed our research for a very long time, he knew that one of the really limiting variables was the only drug which was available for cortisol modulation was mifepristone, which by its activity has a different receptor, the progesterone receptor, had all of its really notoriety as the abortion pill for a very long time. Korlym is an excellent drug for Cushing syndrome, but it is not a selective drug. It gets to other receptors besides the glucocorticoid receptor affects other hormones' activity besides cortisol and also affects progesterone and to a lesser degree androgen – a modest androgen receptor antagonist. Our medicinal chemistry goal, and many had tried it before we did, was to come up with a selective cortisol modulating drug, a drug which did not touch the progesterone receptor. It was really a real medicinal chemistry feat. She's not often on these calls because she's in England, our lead chemist and Head of Research is a skilled medicinal chemist by background named Hazel Hunt. And she really put together the original ideas as to how you could create a compound, which was a cortisol modulator but did not get to the progesterone receptor. Ultimately, she was very, very successful in doing that. Our compounds are really profoundly selective for cortisol activity. They don't touch the progesterone receptor at all. I think that's really a critical difference between that and all the other compounds which are out in the world at this point being developed. Usually, there are no other modulators, or the modulators aren't quite as selective as ours; they really get to more than one receptor. I think that one of the really important, and I'll just – I don't want to get too esoteric with this. But basically, a selective cortisol modulator, which is a four-ring structure, a steroid, I think is very difficult to come by. It really took a novel structure one would – which would fit the glucocorticoid receptor and not the progesterone receptor that really got us to selectivity. So I'll leave it at that. But I think that is a major difference between our compounds and others.

It's very helpful. Thanks, Joe, for taking all the questions. Congrats on a great quarter.

Good to talk to you, Charles.

We'll hear next from Tazeen Ahmad with Bank of America.

Well, thanks for taking my question. Can you guys hear me?

Yeah, we can Tazeen. Hi.

Okay. Hi, Charlie. I just wanted to follow up on the quarter and then congratulations for having a very strong number. Specifically, can you talk about any trend that you've seen in April, and I'm asking only this, Charlie, based on the number that you use for 1Q, it seems like the rest of the year it shouldn't be too difficult for you to have a lean on your guidance.

Right, so just – because it was a little hard to hear you Tazeen, I'm going to just repeat the question and make sure I got it right, which was, what are we seeing in April and was that sort of portent for the rest of the year, given the results we had in the first quarter? I guess I would say that we've given our – reaffirmed our guidance for the year. And we don't give quarterly guidance or any kind of interim guidance, so we think that needs to change. All I can say is that we looked at all of the drivers of our revenue, all the variables that we always look at, we adjusted them, as we thought appropriate for the conditions we saw and expect to see for the rest of the year, and landed right back in the same place in our revenue guidance that we gave originally. And so we reaffirmed it, and that's really all the detail I can give you. And Joe, do you want to add any detail?

No. Look, I'll say something which is obvious to worth stating, it's very tough to predict where things are going to be the rest of the year for anybody. We really took our best crack at it. We were very pleased to see how things went in the first quarter. We don't know what things are currently in place. What the end results will be or frankly, new things that may come up as the year goes along. So we really did our best to come down where we thought it was. And you've heard it. Really don't have anything more to add at this point. Yeah.

So I guess based on what you saw from 1Q, which one of those things could still continue the rest of the year? So you did a good job of explaining I think, Charlie, with this about talking about the 5% price increase to offset some of the impact that you see every first quarter. And if I remember correctly from the earlier question, and about half of the remaining growth might have come from a small minority of patients getting their script renewed a little bit early in anticipation of maybe not being able to be affordable, meaning they can't get around as easily. Would you see that, for example, as something that would continue for the rest of the year?

Yeah. What we've seen this is – again, I'll just repeat it. So you can – for example, the insurance companies allowing patients to refill their prescriptions a few days earlier: do we see that continuing? I think that's something that we have seen continue so far. But again, insurance companies don't tell us their plans. And so we kind of took our best stab at how we thought it would behave over the rest of the year, but our crystal ball in that regard is really no better than anyone else's. And that's – I just can't speak with any more certainty than that.

And Tazeen, I'd just add on the second point that it's really – it's a good thing for patients to take their medicine every day, and we're really working hard to get that message out there, particularly in this time where they are at greater risk. Exactly what it's going to mean as time goes along, I don't know. But it's a very important medical thing, and we hope that it continues.

Okay, fair enough. And then the last one for me, if I could squeeze in is, how are you thinking about the sales force increase that you've been planning that previously you had – did have an impact starting in the second half of the year?

Yeah. Well, yes. Thanks, because it seems like a distant time before we're thinking about that. But yes, we've actually filled out our sales force to some degree. Unfortunately, some of them came on freshly as this began, and we're using this time to prepare to go to even graduate school because we always teach our clinical specialists a lot, and this has really been an opportunity for them to have even more in-depth training. We give our training staff a lot of credit for. But how it’s going – they will now come online as things will loosen up over time. We're hoping they're going to make a substantial contribution. But time will tell.

Okay, thank you. I’m sorry about the bad quality.

No problem.

Alright.

And from Ladenburg Thalmann, we'll hear next from Matt Kaplan.

Hey, guys, congrats on a nice quarter. I guess, a question for Charlie. Just want to dig in a little bit through – from a legal standpoint. Thanks for the update. What events or what moving parts could we see this year with respect to the Teva dispute? Also, the situation – will we just wait for the trial to occur next February, or what should go on this year?

Yeah. So I think with respect to our sort of dispute with Teva, so both the district court lawsuit and the patent office post-grant review proceeding that we have underway, I think that there's really – the things to look for frankly, are the ruling from the PTAB in November on the post-grant review. I mean, we will be exchanging some legal briefs with Teva, which I think will be a matter of public record at the patent office, and you can just go to the public records and look them up as they're filed. And then after that, we'll have our hearing and then they will issue a decision. So I think really the November decision from the patent office, and really nothing of sort of public note until the trial with Teva in February.

Okay, that's helpful. Thanks for the detail. And I guess a question for Joe in terms of pipeline, and helping us think about the studies that you have or plan to start – have ongoing plan to start in the oncology space, specifically in the pancreatic cancer. When should we expect potential results from that study, as you get underway this quarter, but basically?

With the caveat that we never really know what the pace of studies are going to be in – are going to be until we begin them. I think that you actually – and this is really the true forward-looking statement. So take it in that context, but no more than that, because we haven't even begun the study. I think that we will be at a point where we will have results on the first half of the study about a year after it begins.

Okay, very good. And then in terms of additional use of relacorilant in the oncology setting, I guess, the metastatic ovarian cancer study and also the combination with the PD-1 in the pembrolizumab. When do you think we should start moving on some timelines in there, and when do you think we should see results from those two studies?

I heard the second one about the adrenal cancer study with pembrolizumab, and what was the other study you were asking about Matt?

Metastatic ovarian cancer study, I guess.

Okay. Yeah, metastatic ovarian – so let me just give a little bit of editorial comment. It's actually been interesting. I think we said it in the press release, but while all studies were affected by – are being affected by this pandemic, they're not 100% being affected the same. I think the oncology studies – all diseases are bad, but oncology is in some sense the tip of the iceberg of bad, and a lot of these patients have to end up going to the hospital regardless for their care. So although the case of enrollment, for instance, in the ovarian study has diminished, it has not gone to zero. We still expect that we will have results in the same timetable that we thought we would previously, which is, for example, next year. As for the adrenal cancer study, very excited to get that started, adrenal cancer, which we haven't talked much about, is really a rare cancer. Its incidence rate is very low. It's a very severe cancer and somewhat well understood. We're really excited to get going in that because those patients already get treated with Korlym for their Cushing syndrome. We're really – and second, unfortunately, Korlym on amino therapy currently. So there's really a good reason why a cortisol modulator might have the potential for success with these patients. I can tell you in animal models, it looks pretty good. So again, as soon as that study gets started, with the same caveat, very forward-looking statements, studies not started yet. I think there's 20 patients who will produce results in about a year.

Great, well, thanks a lot for taking the questions.

Yeah, no, good to talk to you Matt.

We'll hear next from Chris Howerton with Jefferies.

Hey, great, thanks so much for taking the questions, and I will offer my congratulations on the successful quarter as well.

Thank you, Chris.

Sure. Okay, so I guess, maybe, for – to start off, Charlie, if you could help us think about the operating expenses moving forward for the rest of the year. There's obviously some INDs that may be starting, but unclear to me specifically, what the trends or trajectory we should expect for SG&A with maybe a different operating style with respect to the detail in Korlym?

Sure, I think the – way to think about – also starting with SG&A, I mean the – we have not had to lay anyone off because of the pandemic. We've been able to administer the business pretty smoothly, even at a distance, which is not too surprising. Since within the Bay Area, there's a – working from home and so forth is a pretty well-established practice and we've been able to run the business smoothly. Just historically, if you look back at our SG&A, it tends to be pretty flat over the course of the year. Well, yes, there will be some less spending on travel and entertainment as the – and so pandemic restrictions ease. I wouldn't think that's going to be particularly material difference, and I wouldn't spend too much time trying to guesstimate what that reduction would be. So I don't think it's going to really matter. On the R&D side, while it is true that a sort of slower pace of site activation and slower patient enrollment will reduce our R&D expenses, again – or spread study costs out over a longer period of time. Again, I think the cost of enrolling in caring for a patient in a study is just a part of the overall expense. and so while it will reduce our spending a little bit, I mean R&D includes very significant expenditures on manufacturing work, CMC work, preclinical research is just continuing. So again, while I think, obviously the pressure will be downward. I don't expect a material diminution in our R&D class due to the pandemic, either.

Okay, well said. Alright and then maybe I think obviously, there's increased interest with respect to the oncology platforms and GR antagonism. So within your specific pipeline, maybe Joe, you could describe for us the important differences between relacorilant and exicorilant, and what kind of the ideal settings might be for one or both of those?

That's an interesting question. Thanks for letting me address it and to do that I really want to give you some context, which I don't think I've really had a chance to provide in the past, which is just to be blunt about it, a decade ago when we were thinking about creating selective cortisol modulators. Really it was just – in fact, sort of the program was entitled mifepristone without progesterone antagonism, because that's really all we were going for. We wanted to have something which wasn't the abortion pill, because the medical side effects of progesterone antagonism, both in terminating pregnancy and all the other medical side effects. Many people have actually tried at that point to do it. And it was not an easy thing to do, but as I said – mentioned before, Dr. Hunt actually was able to figure that out. We were really on our way. But what was interesting about it was that she ultimately created four different series of compounds, all of which were cortisol modulators, none of which touch the progesterone, a really very deep library, but initially I was one compound we were looking for. The really interesting thing that happened was that when we started testing these compounds preclinically, all of the modulated cortisol, none of them touch the progesterone receptor, but they weren't identical. Some were better at preventing weight gain, some were better at creating insulin sensitivity, some got into the brain, some didn't get into the brain. Some were more potent in oncologic models than others. Some of them were more specific – potent in specific oncologic models than others. What really ended up happening because of that – and I think we understand it's another whole lecture I will talk about offline if you're interested. But the bottom line was I think we really understand the science of the tissue selectivity that we didn't understand before. But the bottom line was that instead of creating just a single follow-on content, it created four or five different compounds, which might be specific for different disorders. While all of them might have effects, some of them had much more potent effects and as you know exicorilant in particular happens to be very potent in the prostate cancer model preclinically, we thought even more potent than relacorilant, but we're also testing relacorilant through the investigator study that we've described.

Got it, okay, that's very helpful. Thank you, Joe. And one – I hope this is a problem that you have to deal with that when we think about relacorilant in its mature stage theoretically could be applied to both Cushing's syndrome as well as oncology. So strategically, how do you think about pricing and commercialization between those two settings?

Well, I think that that's actually an easier one to bridge because I think that the cancers that we are talking about are really still working on small number cancers, not so different than the population that we see in Cushing syndrome. So again, without any kind of – again sort of specific study of them. I don't think there's really a lot of pricing difference between those two. And that would be very different if we were introducing relacorilant for some mass-market disease where primary care pricing would sort of rule the day. What's interesting is that miricorilant, the drug that we are developing for antipsychotic-induced weight gain and NASH happens to be a very liver-specific drug, it is a very organ-specific drug, and not a particularly good drug for Cushing's syndrome. There are other things like you probably heard the term CERNS, estrogen modulators which are very specific. Relacorilant is one as well. It is not particularly effective in Cushing's syndrome. It really is aimed at primary care disorders at a – at the standard primary care pricing, so not an issue for relacorilant and miricorilant is different.

Okay. Okay. Well, let's say okay. Well, thank you. Thanks so much for taking questions and I'll hop back in the queue.

Yeah, good talking to you Chris. Hello, RK.

Thanks. Hi, how are you? Thanks for taking my questions. Most of my questions on the commercial front of your story have been asked. So I just want to explore a few of these studies with you. On the GRADIENT, which is a study in patients suffering from adrenal adenoma, which ends up causing Cushing's disease. So, how big is this population and if the study that you're planning progresses as you expected to what would be the timeline for the data and also profiling because this probably is going to come post-grant.

Yeah. So again, let me just give a little background for this. It's well – it's been well understood for I guess as long as Cushing's syndrome has been understood that adrenal tumors can produce enough cortisol to really be symptomatic. What's been very interesting over the last 25 years is that with the advances in imaging, they discovered more patients who had adrenal tumors that were producing cortisol but not at the high enough level to produce really florid symptoms, but still to produce real symptoms that were caused morbidity symptoms related to glucose intolerance and hypertension and so forth. That's really become much better understood in the last 10 years. Now, what's interesting about that is many of these patients never really got treated for their hypercortisolism. They're treated with seven different medications for seven different parts of their disease, but never with really a unified diagnosis. It's really been only in the last decade that that's true. And interest really of getting that right is important. Now, a couple of interesting things, these patients as a group tend to not have severe cases of Cushing syndrome, but they have real cases of Cushing's syndrome. The interesting thing from a study perspective is that this is a group of patients who can be studied in a double-blind fashion, since many of them at the current time are not being treated for their hypercortisolism. So with an anti-cortisol agent at all, but could. So from an ethical point of view, they can be randomized to cortisol modulating treatment like ours, like relacorilant or placebo and do the sort of standard true double-blind study. It's very difficult to do with people who have more profound Cushing syndrome because they're giving somebody a placebo, frankly, is unethical and people who are resistant to placebo simply just doesn't work in that disease state. Okay. Now to your specific question. Yeah, it's still an orphan group. I mean, we don't know exactly how many people actually have Cushing's syndrome caused by adrenal tumors so the number really is unknown. We will find that out basically over time, but it's not an insignificant group of people, and it certainly could be as many people as currently are diagnosed with pituitary Cushing syndrome.

Okay, fair enough. Thanks. And regarding the GRATITUDE study, which is the one in treating the antipsychotic-induced weight gain: how similar is that study to the Phase Ib in terms of the study design, and if there are any differences – what sort of differences are you?

I understand the question, and thanks for the opportunity to clarify this. So the Phase I study, remember, is in normal healthy subjects. So these are people who are just volunteers. They are given olanzapine for two weeks with either placebo or with miricorilant. So there are not patients really at all; it's a Phase I study. What we're really trying to find out is whether the medication miricorilant was active in reducing the effects that you quickly see with miricorilant even in healthy people. So in that sense, the Phase I study was an important pharmacodynamic effect and we told you in that kind of study miricorilant looked good, similar to what we have seen with mifepristone many years ago. Now, the Phase II studies are really quite different. They're in patients and the one that we described in the GRATITUDE study is in patients who have gained weight recently within the last six months as an outlier thing from taking one of these antipsychotic medications, and the study is about reducing that weight. Those patients stay on their antipsychotic medication, having deemed weight, then they are randomized to either miricorilant or placebo. The study result is a reduction in weight, as well as looking at all the other metabolic variables which have already gone awry because of the use of the antipsychotic medication. So really, what we learned in the Phase I study was – and that's a big deal. This is a medication that is active and an important mechanism. Now comes the real test of whether it works in patients who are actually being affected by the disease.

And just to follow up on this, in this study, you have an endpoint which is at the end of 12 weeks, what is the weight gain that is not – I mean, really don't get the weight gain, which is under 10 pounds in 12 weeks. Is that good enough because these patients generally have weight gains depending on how long they've been on the dose and sometimes some of these patients are still titrating their dose as the disease waxes and wanes. So I'm just trying to understand how do you balance?

So the patient group in this study are on stable antipsychotic, so their dose has now been titrated. But their weight gain is recent. So they started on the medication in a relatively recent period of time, so that the weight gain that they've seen can be assessed not by just staying home during the pandemic virus and during the coronavirus, but specifically due to the medication. That's what we're really trying to suss out whether that weight gain, which we think is a direct effect of the antipsychotic medication can be reduced with our drug.

Okay, thank you very much, Joe. Thanks.

Nice to talk to you RK.

And from Stifel, we'll hear next from Adam Walsh.

Hi, thanks for taking my question. This is Edmond for Adam. One quick one.

Hi.

Hi, in your tumor studies have you seen any flux throughout the interaction between relacorilant and Abraxane from your clinical studies to date?

Yes, yes, there is a drug interaction when you use relacorilant, you need to use less of Abraxane to get to the same plasma level of Abraxane, and it's due to the 384 interaction.

Could PBI be a potential problem for the combo therapy of these two drugs?

I'm not sure in what sense you mean a problem. I mean, people you have to use less Abraxane. So I guess whoever's making Abraxane is going to make a little less money from it. But in terms of its actual medical effect, no, I think that that commonly you have to look at drug interactions. I think that that's really a portion of it. But as I said, no, we've really had no issue, I think with the investigators in the study having to account for that effect.

Alright, thank you.

We'll move to Alan Leong with BioWatch News.

Hi, Joe. Hi, Charlie.

Hello, Alan.

Yeah, I want to ask – you gave a little more color on the recent miricorilant Phase Ib trial at the higher dose. At the higher dose, did the patients consistently increase blood levels? And if so, did you confirm blood level-dependent patterns? Or is it kind of hard to tell because there is only a small incremental increase in the blood level?

Yeah, well, what I think and I really wanted to hold this because I think this is going to be a nice publication when it comes out. I think the main thing to really glean from is yes, we did see some increase in plasma level, and we were pleased to see that the same effect that we'd seen at 600 milligrams also was true at 900 milligrams. The other important effect I don't want this to get last year Alan is that just as a prescribing doctor – I mean, I guess it's just sort of like a doctor, I've never given a medication that has no side effects. If you get a dose high enough where you're really getting maximum efficacy, you begin to create some side effects. We haven't seen really no side effects at this plasma level of miricorilant. My sense of it is that we are not yet at that level where we are actually getting maximum effects. What was really nice to see in this particular space of the study with miricorilant was the same activity which you can never take for granted really appeared just as well the second time around.

Just want to follow up on the abnormal question answer, your Korlym in Cushing syndrome. Are you seeing some prescriptions go to primary care? Now, especially as less of your patients are being treated and if true, do you envision the adenomas and sub-indication allude to the primary care scripts? Could you provide any thoughts about that?

Yeah, we mostly do not see – in fact, almost all of our prescribers are endocrinologists. The only real exception to that is if there are some areas of the country where primary care physicians in more remote areas are sort of the only game in town, and they act as psychiatrists, endocrinologists, and so forth. It's really everywhere it goes along. The broader answer to your question is no, we think this is a disease which really is best treated by endocrinologists; they understand kind of all the ins and outs, cortisol goes everywhere. We expect that that's going to continue to be the case as we go forward.

Well, thanks. Let me just add that that was a knockout quarter. Well executed to help you set up your years that work.

Well, thanks, Alan. For everyone who doesn't know Alan, he's calling from the epicenter of viral contagion and I'm glad that you're well. Listen, I think that that clears our question queue. So thank you to everybody. Please stay healthy, and we look forward to talking to you next quarter.

And that does it for today's conference. Again, thank you all for joining us.