Corcept Therapeutics Inc Q1 FY2021 Earnings Call

Good afternoon. I'm Atabak Mokari, Corcept's Chief Financial Officer. Today, we issued three press releases, one announcing the positive outcome of our 178 patients Phase 2 trial of relacorilant in combination with nab-paclitaxel to treat patients with platinum-resistant ovarian cancer. Second, announcing markedly decreased liver fat in patients in our Phase 2 trial of miricorilant as a potential treatment for nonalcoholic steatohepatitis or NASH, and the third, providing a clinical update and announcing our financial results for the first quarter. Copies of all of these are available at corcept.com. Our complete financial results will be available when we file our Form 10-Q with the SEC. Today's call is being recorded. A replay will be available on the Investors past events tab of our website.

Thanks, Atabak. In March 2018, we sued Teva Pharmaceuticals in Federal District Court to prevent it from marketing a generic version of Korlym in violation of our patents. Originally, the trial was set to start February 2, 2021. Last quarter, the court vacated that date and ordered the parties to be ready for trial by March 17th. The court then vacated that date as well. We expect to complete discovery by the end of this month. No trial date or trial readiness date has been set. Last month we asked the court to issue an order known as summary judgment deciding the case in our favor. Summary judgment is a procedure whereby judges can decide the case without holding a trial. In the court where we have sued Teva, a party needs the court's approval even to request summary judgment. We received that approval in March. We filed our motion on April 8th based on only one of our patents, the 214 patent. Having agreed to hear our summary judgment motions, the court will consider the briefs submitted by us and Teva, with briefing expected to be complete by June 9th, after which the court will review the material facts of our dispute.

Thank you, Charlie. Before I turn to our recent clinical developments, I want to underscore a point Atabak made about our financial results. Pandemic-related public health measures and the steps both physicians and patients have taken to reduce their risk of infection have made it very hard for our business to grow. Diagnosing and treating patients with complex disease such as Cushing's syndrome requires frequent close in-person contact. Since March of last year, this level of contact was impossible. Only now, and not everywhere, are our contacts starting to move toward their pre-pandemic state. We are confident conditions will continue to improve.

Thank you. And we'll go first to Chris Howerton of Jefferies.

Great, wonderful. Thanks so much for taking the questions and congratulations on the ovarian cancer data; great results there. So, maybe just a couple of questions from me. First, on that program itself, maybe if you could give us just some of your initial thoughts in terms of what the Phase 3 trial might look like there. And I guess is there any opportunity whatsoever to have a discussion with the agency to say, look, these are clinically meaningful data; is there any opportunity for an accelerated approval? So I guess that's one general question. A quick one for Charlie on the legal update: Just wanted to clarify with respect to the PGR that Teva can no longer challenge the validity. Is it all arguments of validity or just those that were used during the PGR proceeding? And then the final question just relates to the commercial business. Obviously, the discussion around dose titration and getting the right new patients to the right dose certainly makes a lot of sense. And I just wanted to check in on some of the status of existing patients, if there are any kind of changes with respect to discontinuation rates. Thanks.

Hey, Chris. Thank you very much for all those questions. I'll take a breath just for a second, and I'll assign these questions to various members of the executive team right here, and then I'll come back at the end. So first let's take your patent question to Charlie.

Yes. Hi, Chris. Teva is barred from using in District Court any arguments it raised or could have raised before the patent office, and that's actually quite a high standard. It can't just be, well, we didn't argue this because we didn't think of it at the time, but now we've thought of it. They have to have essentially a very good reason. The classic example would be, they just learned something from discovery in the litigation that they did not know at the time of PGR. But in our case, discovery was over before the PGR was over, so nothing. So I think they have this very limited path, and they will not be able to challenge the validity in District Court.

The question you asked, Chris, I'll let Andreas Grauer, our Chief Medical Officer, answer that. Andreas will be able to discuss the potential design for the Phase 3 study.

Yes, thank you for the question. And obviously that is what we are working on very hard right now. We will compare the combination of relacorilant and nab-paclitaxel, and I think we will look at the intermittent dose as based on the data we have seen, which seems to be the more effective use of relacorilant in this particular tumor type. We'll have to figure out what the best competitor to that is. Most likely I think we will pick paclitaxel. That makes a lot of sense as a competitor in a large Phase 3 trial. Alternative considerations are we might look into a dealer's choice competitor where we would give investigators the opportunity between a number of established standard and approved treatments for this condition. Size will have to be determined based on the expected overall survival benefit that we'll be looking for, and that is obviously also a key factor for the ongoing trial.

And Chris, let me handle your other question, which of course is obviously intriguing. As Andreas just said, we're already in really the serious stage of planning for a Phase 3 study, and your question was, is it possible that the data would be sufficient to submit an NDA at the end of this study? The top-line answer is that it's a slim possibility. Our really our expectation is that we will have to do a Phase 3 study. But let me give you a little bit more color on that; it's highly likely that the primary endpoint for the Phase 3 study—and in fact for approval—is overall survival. We're very pleased, obviously, with the statistically significant improvement in progression-free survival, but overall survival is still being determined at this point. The data will come out toward the end of the year, and we want to release other data as we have it. We like what we're seeing. We promise nothing at this point, but I can imagine an unusual circumstance where that data on overall survival is so strong that it could lead to a discussion with the FDA at that point. I don't want anybody to count on that, but we are thinking about that in the same way you are. The last question you asked was commercial questions, Chris, and I'm going to pass this over to Sean Maduck, our Chief Commercial Officer.

Hi, Chris, and thanks for the questions. Your question was a two-part one. One was around the discontinuation of the existing patient base—have we seen a change there? The answer to that is no. Your next question was around titrations. I thought I'd spend a minute talking about what success looks like and what we need to call it growth. There are really three key factors that were affected by the pandemic: one is core sensibility to educate doctors on hypercortisolism and Korlym; two would be a doctor's ability to actually see their patients multiple times for an extensive work-up prior to a diagnosis; and the last being, once a patient actually starts Korlym, the frequent follow-up required with their physician to monitor progress and guide appropriate titration. With new patients that have come on during the pandemic, that's something that's really been a challenge. New patients have either not titrated or have been titrating at a much slower rate to get to the optimal dose, which is again directly related to durability to see their physician with the appropriate frequency or even their access to labs or the willingness to go and get labs they may need. We believe that titration will catch up, but for the time being, in aggregate, this has decreased our average overall dose.

Okay, well that—first of all, thanks for shining a light on my questions, and I'll hop back in the queue. Thanks again.

Thank you, Chris.

Hey, good afternoon, gentlemen. Congratulations on the ovarian data. I just want to know, at which venue could we expect the overall survival data for the informative study?

I'm sorry, I didn't quite hear the question. Which submission?

Where are we going to...

At this point in time, the answer is first, overall survival is likely to take some amount of months from here. We will get other data before we actually get the final overall survival data. We will present this data at conferences as quickly as we can, just depending on conference deadlines. We're examining that as we go forward; whatever we receive in any kind of batch, we will send out to a conference and present it there. I can't say with certainty which ones yet.

Okay, that's great. Thanks for that. And my second question is regarding the NASH study. So I'm just wondering, beside the trends in ALT and AST elevation, are there any other safety signals observed in these four patients?

I'm going to pass you back to Andreas Grauer.

Yes, no, that was the safety signal that we did observe, which obviously—we had seen that first, right? That's why we stopped dosing and halted the trial. The benefit we observed came after because we did a thorough investigation of all aspects of what happened to these patients. Quite frankly, we were surprised to see such an improvement in liver fat so quickly, and we shared that with some of our advisors, and they were surprised; they had never seen anything like that before. This again encouraged us to say we really want to try to figure out how we can find a sweet spot to provide a dose or schedule of giving this drug in a way that is both effective and safe.

But, Arthur, the short answer to your question is we did not see anything besides elevated liver function tests at the time we halted dosing.

That's great. And just a follow-up on the efficacy similarly, the fat reduction is impressive. I'm just curious, have you guys managed to take a look at the fibrosis for these patients?

Yes, no. First of all, this was a non-invasive study. So this was not a biopsy trial. We did not look at fibrosis in this particular trial. We also did not repeat, like for example, a fibroscan measurement. The MRI data is really the only thing we have. Seeing a change in fibrosis within four weeks, which was the treatment duration for most of these patients would be absolutely unexpected but we wouldn't know; we did not know.

But just, Arthur, for comparison, in almost all studies, this threshold number is 30% in terms of fat reduction, which is presumed to—and there are studies that show that it really correlates with a reduction in NASH and fibrosis. That's how we incentivize our 30% target, and others have done the same thing. I'm going to reiterate what Andreas said; it was really extraordinary to see, after such a short period of time, that these patients have shown much greater in some cases, reduction of more than 30%; it’s really a potent medication. Now we really have to figure out how to harness it.

Okay, that's great. Thank you very much for taking my question.

And we'll move to our next question from Tazeen Ahmad of Bank of America.

Hi, good afternoon, guys. Thanks for taking my question, and congrats on the ovarian data. To go back to Korlym for one second, you've talked in-depth about all of the ways in which COVID has impacted sales, and that is consistent with what we are hearing from other companies across multiple indications. I am curious to know if you're getting any feedback from your sales force on whether they're seeing any kinds of competitive risk from the retro drug that recently launched, and just feedback from a non-quantitative aspect. We will be curious to hear your thoughts on that. Then I have a couple of follow-ups.

Sure, Tazeen. I'm going to pass you back to Sean, who really runs all of the Korlym business.

Yes, thanks, Tazeen, for the question. The short answer is no, we're not seeing an impact on our business from Isturisa based on what you're referencing. We're not seeing virtually any impact on our existing base, and we continue to add patients to our Korlym at our expected rate. I just want to remind everybody on the call that Isturisa is approved for Cushing's disease, which is a subset of Cushing's syndrome; Korlym, of course, is approved for broader symptoms, which encompasses all etiology bases.

Okay. And then while we're on the topic, you had mentioned some factors to highlight, including getting doctors educated about Korlym. Now for a drug that has been on the market, it's a relatively mature drug; what percent of the doctor population, targeted doctor population do you think is still yet to be fully educated on the benefits of the drug?

Yes, so I mean we reach out as best we can to sort of all endocrinologists within the country. Ultimately, we believe that every one of them could potentially have a patient with Cushing syndrome. We target a list of 1,500 to 2,000 with greater frequency, but there are many that have yet to prescribe, so there is a real opportunity within the existing endocrinology base to write their first prescription approval.

Yes. And what I'd add to that, Tazeen, is as Sean said, we focused on about 1,500 to 2,000 of about 7,000 or 8,000. Most endocrinologists these days are diabetologists; they are not really looking into other things like Cushing's syndrome. We now, in fact, think that as a result of peer-reviewed publications, more are looking at this. Some of those diabetologists who previously did not take Cushing's syndrome seriously are starting to do that. That makes us hopeful that we can reach all of the patients who have Cushing's syndrome as opposed to the fraction we've reached so far.

Okay, cool. Thank you. And then maybe one question on the RELIANT study, if I could. You are going to have this interim read of 40 patients. What is the bar of efficacy that we should be looking for? And could you potentially file after that interim read?

I'm going to pass you to Andreas in a second, but I guess 'could' is a pretty broad term. It is definitely not our expectation that that would be possible to file after just these 40 patients. The bar, I think as we've mentioned in previous calls, what you compare it to is a 0% response rate; above 20% is something that everyone would say, well, that must be your medicine. If it's 10% to 20%, you have to consider that there is something going on. If it's below 10%, it's hard to know whether that's different from what you would ordinarily expect. We're very interested in seeing now—if we were sort of to pick the Great White Well of cancers, I mean pancreatic cancer is terrible, and metastatic pancreatic cancer is really terrible. We'll just have to wait and see where that is.

Yes, I asked that already because of the unfulfilled need. Okay, thank you.

No, right. Of course, the other side of the bar is lower because of that.

We'll go next to Matt Kaplan of Ladenburg Thalmann.

Hi, good afternoon. Thanks for taking the questions, and yes, my congrats to the ovarian cancer top line results here. I just wanted to dig a little bit into the differences that you're seeing in the dosing regimen and what to make of those. I guess maybe how many patients in the 100-milligram daily dose were up-titrated to 150 milligrams in the study?

Matt, I'm giving your question over to Andreas.

Yes. So overall, 30% of the patients in the 100-milligram dose were up-titrated; not all of them to 150; about two-thirds of those who were up-titrated were up-titrated to 150. So those are the exact data.

Yes. The other thing—and Matt, maybe if this is a longer answer, we can take it offline. There is a theory as to why intermittent dosing actually might be effective in terms of the glucocorticoid receptor genes that are needed at that zone, and of course, treatment is always the combination of efficacy and potential for adverse events. There is a real theory behind intermittent dosing; it wasn't just a random event. It was interesting to see that, in fact, it was both superior at this point to every day therapy at a lower dose and then it was superior to the background therapy, with statistics.

And then in this study, what's your sense in terms of the overall response rate that you're seeing? And was there a differentiated overall response rate in the choosing arms?

Right. So I don't want to give too much information; we don't want to spoil our chance to present this at important conferences. I can give you a general answer to that question. The overall response rate—and I say this without specific numbers—was relatively the same among the crews, but the really different aspect was the duration of response for those who responded, and that's what separates them.

Okay, thanks. And just shifting gears to the GRACE study for Cushing syndrome. What's your sense in terms of enrollment there? Is it starting to accelerate now, as we're turning the corner in the pandemic here, hopefully at least in some parts of the world? Are you seeing an acceleration in enrollment?

I think enrollment is starting to pick up again. The winter was pretty disappointing for us, but now in the spring, we're seeing signs of progress, both in the U.S. and in Europe—Europe being somewhat slower than in the U.S. So we're positive and hopeful that we can deliver what we told you we are planning to deliver.

Yes. Just to underscore that, Matt, this is to some degree a Euro-centric study. We expect in the end, our overall enrollments should probably be—I'll say, 70% European—much like it was in this Phase 2 study. So it's a bit of a wildcard. The general answer, as you know, is things are getting better, and we're at this point completely hopeful that we will keep our current timeline.

Okay, great. And then last question, in terms of relacorilant, the increase in liver enzymes, liver function tests that you're seeing in the NASH study. Can you talk about what you're seeing kind of across the board in general with relacorilant and other indications in other patient populations? Are you seeing any indications of liver enzyme increases?

Hey, Matt, I just want to clarify one thing: the drug in the NASH study is miricorilant.

Oh, that's miricorilant, yes.

Miricorilant has never produced any of these types of issues, but I'll leave it to Andreas here to answer the question related to miricorilant.

Yes, for miricorilant again, we've seen this elevation of liver enzymes in the NASH study. Interestingly, we've seen it in the patients that have shown the massive reduction in liver fat. Our best assumption at the moment is that those two events are related, and maybe we're simply resolving the liver fat too quickly, and we'll have to slow down the effect to make this palatable for the liver as a long-term benefit. In our antipsychotic-induced weight gain studies, where we are using the same doses that we had initially used in NASH, we are not seeing these changes. Therefore, there seems to be a true influence from the underlying disease on the side effect profile that we're observing.

Thanks, Matt.

Thanks, thanks.

And we'll hear next from Alan Leong of BioWatch News.

Hi, there. Congratulations.

Thank you, Alan.

Going to the NASH trial, when you had this amount of fat reduction, did you see a global change in the body? I know it was only one month, but are you seeing overall weight reductions? If you were able to give any inferences on fat reductions and the other organs?

So Alan, is this a personal question? Yes. Yes, in a month. Andres can tell you if he even looked at that, but we were not expecting general weight loss. Do you have an answer to that?

Especially in our inflow for patients, right, where we wouldn't have any.

But it's an interesting question, and we will look at that.

Yes, I'm trying to go on the side door antipsychotic weight gain. Let's take antipsychotic weight gain and if you can serve any signal, is the current thinking that the consumption of antipsychotic puts a brake on how much fatty acid gets to your waist?

Yes—I hope everyone heard that because it's sort of an intriguing idea. I'm just going to settle out. I'll give you my opinion: that somehow antipsychotic medications are protective against this is probably not the case. I think it is coincidental, but I want to underscore what Andreas said even a bit more than I might have thought. I have learned about this that NASH is really a different disease. The patients with NASH hepatitis is its own real problem; you already have people who have inflammation, and perhaps that's what makes the diseases really different. We're still studying that because Andreas is giving you a more global response to it. As I said, I don't think it's the antipsychotic medication; I think it's just the underlying group of patients are not as identical as one might have thought.

That's helpful. Last question, on ovarian cancer, did anything stick out for the responders? For example, did the number of prior treatments show any separation of the curves? Or whether they had been on Avastin before or not?

As you always do, you push me to the end of the map to be released. Okay. That's very nice of you. Thank you, Alan. So with that, we have used an hour of your time. Thank you; we are very excited about what we've seen today. As I mentioned before, I really do think that this is the most important results we've had since the pivotal trial in Korlym that was eight years ago. This is a big day for us, and we're very glad to answer any more questions offline. We look forward to updating you as the year goes along. Thank you.

And so, ladies and gentlemen, that does conclude this call. We would like to thank you for your participation. You may now disconnect.