CORT - NASDAQ

Thank you for standing by, and welcome to Corcept Therapeutics Third Quarter 2025 Earnings Conference Call. [Operator Instructions] I would now like to hand the call over to Atabak Mokari, CFO. Please go ahead.

Hello, everyone. Good afternoon, and thank you for joining us. Today, we issued a press release announcing our financial results for the third quarter and providing a corporate update. A copy is available at corcept.com. Our complete financial results will be available when we file our Form 10-Q with the SEC. Today's call is being recorded. A replay will be available at the Investors Past Events tab of our website. We will also post a presentation regarding our oncology development programs in the same section. 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 be materially different from those such statements expressed or implied. The risks and uncertainties that may affect our forward-looking statements are described in our annual report on Form 10-K and our quarterly reports on Form 10-Q, all of which are available at the SEC's website. Please refer to those documents for additional information. We disclaim any intention or duty to update forward-looking statements. Our revenue in the third quarter of 2025 was $207.6 million compared to $182.5 million in the prior year period. We have modified our 2025 revenue guidance to $800 million to $850 million Net income was $19.7 million compared to $47.2 million in the third quarter of last year. Our cash and investments at September 30 were $524 million, which reflects our acquisition of $50 million of our common stock in the third quarter pursuant to our stock repurchase program as well as shares acquired upon the exercise of Corcept stock options and the vesting of restricted stock grants. I will now turn the call over to Charlie Robb, our Chief Business Officer. Charlie?

Thanks, Atabak. There is nothing new to report regarding our patent litigation with Teva Pharmaceuticals. Recall that in March 2018, we sued Teva to stop it from marketing a generic version of Korlym in violation of our patents. The case went to trial in September 2023, and in December 2023, the trial court ruled against us. We appealed that decision to the Federal Circuit Court of Appeals. 3 judge panel of that court heard oral argument on July 7 of this year. Although it is impossible to say exactly when the court will issue its decision, enough time has passed that it is reasonable to say that the decision could come at any time. If we prevail, Teva will lose FDA approval of its product until the expiration of our patent in 2037. We strongly believe our position is correct and are eager to advance this appeal. I'll now turn the call over to Sean Maduck, the President of our Endocrinology division. Sean?

Thanks, Charlie. Our hypercortisolism business had another quarter of robust growth. In the third quarter, we shipped more tablets to patients than ever before, 42.5% higher than the third quarter of last year, driven by yet another record of prescriptions written for Korlym. Importantly, our base of prescribers has expanded substantially over the last 2 years. In summary, the underlying strength of our business continues to build. Our financial results don't fully reflect the surge in demand. I discussed on the last few calls, the insufficient capacity of our previous pharmacy vendor. While we expected their capacity to improve in the third quarter, it did not, which is why we have begun transitioning our business to a new pharmacy in the fourth quarter. While capacity constraints may continue for the next few months as we complete the transition, we are very encouraged by the new pharmacy's abilities and its capacity to meet demand. As welcome as such improvements are, eventually the growth we anticipate will outstrip the capacity of any single pharmacy, which is why we plan to add a second specialty pharmacy to our network in January and to onboard a third pharmacy shortly thereafter. Our confidence in continued and accelerating growth is based on several factors. The first is growing physician awareness of hypercortisolism. For many years, the prevalence of hypercortisolism and the serious risk it poses for patients were not well understood. As a result, physicians only screened for and treated the most physically obvious cases of the disorder. In the last 15 years, many studies have shown that hypercortisolism is much more common and is a serious threat to health and far more than the most extreme cases. Most recently, our CATALYST study confirmed these findings, proving that there are many more patients with hypercortisolism than previously assumed and that treatment with a cortisol modulator is highly effective improving their condition, even when other medications, including the newest diabetes medications such as Ozempic and Mounjaro have not. The CATALYST results have been published in Diabetes Care, the field's leading journal and are now being absorbed by the broader physician community. To translate these insights into patient impact, we continue to expand our physician education efforts, and we have enlarged the size of our sales force to 150 clinical specialists, up from 60 at the beginning of 2024. With the awareness of hypercortisolism growing and the effectiveness of cortisol modulation demonstrated in a large placebo-controlled trial published in a leading peer-reviewed journal, I eagerly anticipate relacorilant's approval. Korlym is a great medication but relacorilant is even better. It will be a terrific option for both prescribers and patients. I expect that almost all patients who are receiving Korlym will choose to transition to relacorilant and our growth will accelerate. I've never been more confident in both our current and future commercial growth and most important, our potential to help many more patients. In the next 3 to 5 years, I believe relacorilant will generate $3 billion to $5 billion in annual revenue in hypercortisolism alone. I will now turn the call over to Joe Belanoff, our Chief Executive Officer. Joe?

Thank you, Sean, and thank you, everyone, for joining us this afternoon. After many years dedicated to studying the potential of cortisol modulation to help patients suffering from serious diseases, we are on the cusp of a new era at Corcept. We have 2 new drug applications that are rapidly approaching their FDA target action or PDUFA dates. Our NDA for relacorilant as a treatment for patients with hypercortisolism has a PDUFA date of December 30, 2025. Our NDA for relacorilant as a treatment for women with platinum-resistant ovarian cancer has a PDUFA date of July 11, 2026. We believe the FDA will meet both deadlines. We submitted the European analog to our ovarian cancer NDA, known as a marketing approval authorization, or MAA, to the European Medical -- Medicines Agency, or EMA in October with a regulatory decision likely by year-end 2026. Some of our most advanced clinical studies will soon produce important data. Our MOMENTUM trial, which is evaluating the prevalence of hypercortisolism in patients with resistant hypertension will have results early next year. We expect final overall survival results from ROSELLA, our pivotal trial in platinum-resistant ovarian cancer around the same time. By the end of 2026, we expect results of our BELLA trial also in patients with advanced ovarian cancer as well as results from MONARCH, our Phase IIb trial in patients with MASH, a life-threatening liver disorder. We are also about to start important new studies. In consultation with the regulators, we are finalizing the design of a Phase III trial of our proprietary selective cortisol modulator, dazucorilant in patients with ALS. We plan to start this trial by the middle of next year with a simple goal of replicating the strong results we saw in DA

Thanks, Joe. Now in order to understand the scope of our opportunity in oncology, I think it helps to recall that our program follows groundbreaking insights made by investigators at the University of Chicago, who hypothesized that cortisol activity at the glucocorticoid receptor promotes solid tumor growth in 3 ways. First, it's anti-apoptotic, so it blunts the effectiveness of chemotherapy. Second, it provides alternative growth pathways for prostate cancer tumors being treated with androgen deprivation medication. And third, it suppresses the immune system, reducing the effectiveness of immunotherapy in the treatment of cancer. Increasing apoptosis by blunting cortisol activity is a very broad platform. It applies to all solid tumors that express the glucocorticoid receptor. Published research has shown that about 60% of solid tumors express the GR, and they do so at every stage of treatment. Our oncology program is built on the belief that antagonizing the effects of cortisol at the GR can benefit many, many more patients. And a prime example of that is shown by the women from our Phase II and pivotal Phase III ROSELLA studies who received relacorilant in addition to nab-paclitaxel and experienced extended progression-free survival and live longer than the women who were treated with just nab-pac alone. Now remember, nab-pac is one of the most potent treatments for women with this disease and adding relacorilant led to an even better result and remarkably without adding to the safety burden of the women who received it. Adverse events with relacorilant plus nab-pac were comparable in type, frequency and severity to nab-pac monotherapy. As I review the data, relacorilant is a remarkably well-tolerated drug. The medical field understands the importance of our results because the data from ROSELLA were presented at high-profile forums this year, including late-breaking oral sessions at both ASCO and ESMO annual meetings. And ROSELLA findings were published in The Lancet, one of the world's most preeminent journals. Our goal now is to undertake studies that will extend this work in 3 ways: first, in earlier lines of therapy for ovarian cancer; second, in new types of solid tumors; and third, combining our proprietary GR antagonist with additional regimens. So the first study advancing this goal is a Phase II BELLA trial. BELLA's initial objective is to treat and test the additional benefit of relacorilant may bring when combining it with nab-pac as well as bevacizumab, which is a potent drug that is commonly used to treat patients with platinum-resistant ovarian cancer. Due to the strong interest in our program by investigators around the world, this study has enrolled patients much faster than we expected. And as Joe mentioned, we will have the results by the end of 2026. But this is just our first step. BELLA's protocol allows us to add more arms to the study that include patients with different types of solid tumors. Currently, we are going to add 2 new arms. The first will evaluate relacorilant plus nab-pac and bevacizumab to treat patients with platinum-sensitive ovarian cancer, an earlier stage of the disease. In order to enroll in this arm, patients must have progressed on a PARP inhibitor, which is the subgroup that experienced profound benefit in ROSELLA, and we just presented that data at the ESMO conference. The second new BELLA arm will evaluate the potential of relacorilant plus nab-pac to treat patients with endometrial cancer. Separately, we are also initiating a Phase II study of relacorilant plus nab-pac in patients with cervical cancer in collaboration with ARCAGY-GINECO, which is an academic clinical research group specializing in gynecological cancers. These new studies will enable us to triple the potential number of women with gynecological cancers that we can help each year in the United States from 20,000 patients with platinum-resistant ovarian cancer to 60,000 patients. We are also targeting other tumors with significant unmet medical needs. We are initiating a Phase II study in patients with pancreatic cancer by combining relacorilant with the first-line standard of care regimen of nab-pac and gemcitabine. All of these studies will begin enrollment in the coming weeks and should enroll very quickly like all of our past studies have done. The results will be guideline enabling with a particular focus on the National Comprehensive Cancer Network or NCCN guidelines. These studies will also inform our future development decisions. In addition to exploring cortisol receptors antagonism potential to resensitize tumors to chemotherapy, we are evaluating its use in combination with antigen deprivation therapy. Our collaborators at the University of Chicago are currently enrolling a randomized placebo-controlled Phase II trial of relacorilant plus enzalutamide in patients with early-stage prostate cancer to determine if GR antagonism can block a cortisol-mediated tumor escape route. Another possible role of cortisol receptor antagonism is in combination with immunotherapy. Immunotherapy has emerged as a standard of care cancer treatment with more than 200,000 patients in the United States receiving this form of therapy each year. Because cortisol suppresses the immune system, it may blunt the effectiveness of cancer therapies intended to stimulate an immune response. Adding a GR antagonist to immunotherapy may enhance their effectiveness. Therefore, in the coming weeks, we are initiating a Phase Ib dose-finding study of nenocorilant, our new proprietary selective cortisol receptor antagonist in combination with nivolumab, a PD-1 directed immunotherapy to treat patients with a broad range of solid tumors. We've embarked on a mission to advance GR antagonism to help many patients with a broad range of solid tumors. Our ROSELLA study produced exciting confirmatory evidence of our hypothesis, and there is much more to come. We look forward to updating you on our progress. I'll now turn the call back over to Joe.

Thanks, Bill. Before reporting advances in our MASH and ALS programs, I will briefly describe the research findings that give us confidence in the substantial opportunity before us in our hypercortisolism franchise. Prevalence phase of our CATALYST trial demonstrated that 1 in 4 patients with resistant diabetes has hypercortisolism, a far higher rate than was previously assumed. These results are transforming medicine. Patients who are enrolled in the placebo-controlled treatment phase of CATALYST had uncontrolled diabetes despite treatment with the best current medications administered by the leading diabetologists and hypercortisolism. In 24 weeks, patients treated with Korlym experienced a 1.47% reduction in hemoglobin A1c, along with significant improvements in body weight and waist circumference. Notably, patients in CATALYST experienced these improvements even as they decreased or entirely discontinued their other glucose-lowering medications, including the most potent GLP-1 agonists. Our MOMENTUM trial builds on the findings from CATALYST by evaluating the prevalence of hypercortisolism in patients with resistant hypertension. Results from MOMENTUM are expected by early next year. The findings from CATALYST and MOMENTUM will substantially accelerate screening for hypercortisolism and its treatment. As physician awareness of hypercortisolism rapidly grows, relacorilant is approaching its December 30 PDUFA date. Relacorilant's NDA is supported by our pivotal Phase III GRACE trial as well as our GRADIENT long-term extension and Phase II trials. In these studies, patients treated with relacorilant experienced clinically meaningful improvements in all the measures of hypercortisolism including hypertension, hyperglycemia, weight, lean muscle mass, waist circumference, cognition and Cushing's quality of life score. These benefits were observed consistently and durably with improvements emerging early and continuing or deepening over time. As awareness of hypercortisolism and its ability to be treated grows, many more patients will be identified, and Corcept is well positioned to help them. As Sean said earlier, we are confident that our Cushing's syndrome business will continue to grow for years. Our proprietary molecule, miricorilant, has very potent activity in the liver. Metabolic dysfunction-associated steatohepatitis, or MASH, is a serious liver disorder that afflicts millions of patients in the United States and globally. Cortisol activity plays a role in both the initial development and progression of the disease and cortisol modulation may serve as a treatment. Our Phase Ib study showed that miricorilant rapidly reduced liver fat and improved other important markers of liver health, including fibrosis. Miricorilant was also very well tolerated without the GI side effects commonly seen in patients being treated for MASH. Our randomized double-blind placebo-controlled Phase IIb MONARCH study aims to expand on our encouraging Phase Ib results. MONARCH enrolled 175 patients in 2 cohorts. The first cohort of patients has biopsy-confirmed MASH. The second cohort consists of patients with presumed MASH. We expect results from both cohorts late next year. ALS is a devastating disease associated with elevated cortisol activity. Our proprietary compound, dazucorilant, is an excellent candidate to treat it. In our 249 patient double-blind, placebo-controlled Phase II DA

[Operator Instructions] Our first question comes from the line of Edward Nash of Canaccord Genuity.

I wanted to ask, I know sometimes you give the numbers. I just want to get an idea of how many patients at the end of the quarter that you had on drug? And then also, can you give us some idea of -- I know you're going to be bringing on a second new distributor at the beginning of the year, as you mentioned. But just wanted to have an idea of based upon what historically your previous distributor, what additional capacity or what magnitude of capacity does this new distributor that sort of come on in October have over your old distributor?

Thank you, Edward. I think we understand both of those questions. And I'm going to pass you over to Sean Maduck, who is the President of our Endocrinology division.

Thanks, Ed. I appreciate the question. Your first question was around about how many patients do we have on medicine at the end of the quarter. We had around 3,250 paying patients at the end of the third quarter. So in terms of the pharmacy that was just onboarded on October 1, it's a great pharmacy and we think we're going to -- they're going to do just a fantastic job supporting patients. And they've got about 25 years of experience, which is in serving orphan and orphan disease products, which is great. In terms of the specific question around capacity, they have the ability to continually expand with our business. They also have multiple locations around the country to distribute, which is something that was very appealing to us as we continue through the rest of the year with Korlym and then get ready for the relacorilant launch in 2026.

And Edward, I think you also asked about other pharmacies, which are coming on next year. I think a really important thing to realize to tie your 2 questions together as well there are now 3,000 or so patients who are taking Korlym. We actually believe that the market capacity is much, much greater than that. And we really do think that as relacorilant begins to come on to the market, no single pharmacy is going to easily handle all of the business there. And that's why we're gearing up right now to add second, third pharmacies to that.

Great. That's helpful. And I just had one quick model question. On the gross margin line, you guys have historically had really high margins. And given the increase in volume, but also pricing and generic shift, are you seeing any downward pressure on margins that might require modeling adjustments going forward?

Let me give you back to Atabak on for that question.

Edward. No, we have not seen that, and we don't expect that.

Our next question comes from the line of David Amsellem of Piper Sandler.

Just a couple of quick ones. One, can you just remind us what the -- what net pricing looks like relative to brand pricing, just given that more and more of the business is going through the AG? How much of your business is coming from the AG? And then also, as you look to the PDUFA in ovarian, were you surprised you didn't get a priority review? And then lastly, can you talk about R&D and SG&A directionally for 2026 given the launches and given all the clinical studies?

Thanks, David. And I think we'll give your questions to the person who could each answer them best. Sean, why don't you begin?

Yes. Thanks, David. In terms of our authorized generic in the second quarter, we were -- about 2/3 of our business were on the authorized generic. In the third quarter, it ended in the low 70s. And our expectation is by the end of the year, it might creep up a little bit, maybe ending at around 75%. And then in terms of the net, it's about a 30% discount to Korlym's list price.

Charlie, answer about the ovarian cancer NDA.

Yes. So we requested priority review. We didn't receive it. And to say, we weren't surprised to not receive it. We wouldn't have been surprised to receive it. Just based on the strength of the application, we were confident that we met the sort of stated criteria about substantial benefit in terms of safety or efficacy over available treatments. But the FDA has many priorities, many other things going on and their decisions are theirs and are sometimes opaque to us. So no, not surprised. Always hopeful, not surprised. And that's just, I think, the way dealing with the FDA on this kind of question has to be.

And Atabak?

Sure. So regarding your question on R&D spend and SG&A, so we've talked a lot about the huge opportunity that we see ahead of us on multiple fronts across all of our businesses. And so we're going to invest to capture that. So on the R&D side, while we -- Bill walked you through many new studies that we're planning, there are many studies that we've been running throughout this year that are completing and winding down. So I would expect our R&D expenditures next year to be about the same as we are in 2025. And then on the SG&A side, we see huge opportunities on both hypercortisolism and ovarian cancer. And so we've been investing to prepare for launches of relacorilant in both of those indications, and we'll continue to invest to capture the large market opportunity. So I would expect those SG&A expenses to continue to increase.

Our next question comes from the line of Joon Lee of Truist Securities.

Congrats on the quarter. This is Asim Rana on for Joe. Just a couple from us. So you said previously that the second pharmacy would have more meaningful contribution in the fourth quarter. Now that the first pharmacies out of the picture seems to be, how confident are you that Curant can handle the increase in volume over, say, fourth quarter and the quarters going forward? Is Curant fully online as of the fourth quarter? And then just as a follow-up, on the upcoming PDUFA for relacorilant, have you had a late cycle review for relacorilant? And if so, what can you share?

Sure. Thank you very much for those questions. I think I understand all of them. The first one, we will send to Sean.

Yes. So I'll answer your second question first. Curant is fully online. They started taking new patients on October 1. Almost all new enrollments are going to Curant. And over the course of the quarter, we will be transitioning the remainder of the business. So we're very confident in their ability to handle the capacity and meet the demands of the fourth quarter.

And Charlie?

So just can you repeat the question for me because I want to make sure I answer it really correctly. What you say?

Yes. Just on the upcoming PDUFA for relacorilant, have you had a late cycle review for rela? And if so, what can you share?

Sure. So just a little background for people who don't -- are not as familiar with NDAs as you are. When the FDA agrees to review your new drug application, they give you a letter that sets out sort of the key milestones that are going to happen during the review process. And one of them is the mid-cycle review meeting with -- between the sponsor and the FDA. And the second is, as you know, another one is this late cycle review meeting. I can tell you that we've had both. I cannot tell you sort of what transpired or the nature of our back and forth with the FDA because we just can't comment on that. But we held them both exactly on the schedule the FDA set out in additional -- in its original letter to us. Things have moved per schedule, very ordinary course, and we are very confident as a result that the FDA will meet its target date of December 30.

And if I could just have a quick follow-up. Is Optime still selling Korlym? And if so, like how long would they have to?

Yes. Sean, please take that.

So Optime is still servicing patients just as they were before as they're obligated by the contract.

Our next question comes from the line of RK with H.C. Wainwright.

A couple of questions. So first question being on the guidance. If I take the midpoint of your current guidance, the fourth quarter sales should come around $265 million or so, which is -- which means it requires a 28% growth from the third quarter number. With only one pharmacy in operation per se, how comfortable are you in thinking about that sort of growth, especially with holidays and less number of sales days? And the second question...

Go ahead, please.

Sorry. And the second question is on the new molecule that I see on the pipeline, nenocorilant. -- how different is that from rela? And do you plan to release any preclinical data from that molecule as we start thinking about the study in solid tumors as a combination therapy with the PD-1 inhibitors?

Okay. I think we have both of those questions. The first one is Sean. Please go ahead, Sean.

Yes. So RK, just to be clear, you said in your question that we only have one pharmacy. That's incorrect. We actually have 2 pharmacies. Optime Care is continuing to service the active patient base and all new prescriptions are going to Curant. So over time, a greater percentage of our business is going to transfer over there. We expect combined to see some efficiencies, and we expect to have a strong Q4.

And Bill, any comments you'd like to make about nenocorilant?

Yes. Thank you. So related to nenocorilant in our oncology portfolio, when we look at relacorilant, as you heard, all the studies we're doing with relacorilant. Relacorilant is a great molecule and it's shown its benefit not only in oncology, but also endocrinology, but we're always looking at and evaluating new molecules preclinically to help us broaden our reach in every therapeutic area and especially oncology. And as we looked at the opportunity with combinations with PD-1 inhibitors, we felt that a drug like nenocorilant had unique properties that allowed us to dose it on a regular basis to help us look at other solid tumors. And we really felt it was the best partner for PD-1 inhibitors compared to that of relacorilant. And so when it comes to publishing our preclinical data, yes, we always publish our data, and I would expect us to have that data in the public domain next year.

Let me make just a more general point because I know, obviously, RK is really the first person who really absorbed our oncology opportunity. You've been following this the longest of anybody, but let me make some points for those who have not. One of the really interesting things is that years ago, when we were only working with mifepristone, which we call Korlym, we were looking for a follow-on compound, which wouldn't have progesterone receptor activity. And our terrific Chief Chemist at that point. Now our Chief Scientific Officer, Hazel Hunt, was able to come up with one and then more and then more. And what was really interesting about them is that while all of those compounds modulated cortisol activity and none of them touch the progesterone receptor. So they were really distinct. She sort of accomplished her mission in separating the activities. As we began to test them preclinically, they simply weren't identical. Some got into the brain, some didn't get into the brain, some were organ-specific, some were general and some were more potent in the -- on various oncology models than others. And so where it left us with not a single follow-on compound, which is frankly what I had anticipated but with 4, 5, 6, 7 compounds, each paired with the best treatment opportunity and best disorder for which it could make progress. So it's been a very interesting opportunity. I think nenocorilant is quite interesting. You'll learn more about it next year as we go along. We're very excited to actually begin that study. I think it will really help us learn very much as to what the next thing to do is. So thank you all for your questions. Thank you for listening in. Really an exciting time, and I look forward to talking to you next quarter. Thank you. Bye-bye.