CRNX - NASDAQ

Welcome to Crinetics Pharmaceuticals Second Quarter 2025 Financial Results Conference Call. [Operator Instructions] I'd now like to turn the call over to Gayathri Diwakar, Head of Investor Relations. Please go ahead.

Thank you, operator. Good afternoon, everyone, and thank you for joining us to discuss the second quarter 2025 results. Today on the call, we have Dr. Scott Struthers, Founder and Chief Executive Officer; Dr. Dana Pizzuti, Chief Medical and Development Officer; Isabel Kalofonos, Chief Commercial Officer; and Toby Schilke, Chief Financial Officer. In addition, Dr. Steve Betz, Founder and Chief Scientific Officer; and Dr. Alan Krasner, Chief Endocrinologist, will also be joining for the Q&A session. Please note there is a slide deck for today's presentation, which is in the Events & Presentations section of the Investors page on the Crinetics website. In addition, a press release was issued earlier today and is also available on the corporate website. Slide 2: as a reminder, we'll be making forward-looking statements and I invite you to learn more about the risks and uncertainties associated with these statements as disclosed in our SEC filings. Such forward-looking statements are not a guarantee of performance and the company's actual results could differ materially from those stated or implied in such statements due to risks and uncertainties associated with the company's business. In particular, today we will be reviewing our commercialization plans as well as estimates related to market size, growth and other data about the acromegaly market. Projections, assumptions and estimates of the future performance and the future performance of the markets in which we operate are necessarily subject to a high degree of uncertainty and risk. These forward-looking statements are qualified in their entirety by the cautionary statements contained in today's news release, the company's other news releases and Crinetics' SEC filings, including its annual report on Form 10-K and quarterly report on Form 10-Q. I would also like to specify that the content of this conference call contains time sensitive information that is accurate only as of the date of this live broadcast, August 7, 2025. Crinetics takes no obligation to revise or update any forward-looking statements to reflect events or circumstances after the date of this conference call. With that, I'll hand the call over to Scott.

Founder, President, CEO & Director Thank you, Gayatri, and good afternoon to everyone joining today's call. Turning to Slide 3. We are pleased to provide an update on our corporate progress and share our second quarter results. We continue to execute on our mission to develop innovative therapies for patients with endocrine diseases and endocrine related tumors. As we approach the pivotal moment of our pending approval of our first NDA, I'm pleased to report strong execution across all aspects of our business. I want to begin by reaffirming that the paltusotine NDA review remains on track. We continue to work closely with the FDA towards an anticipated approval in September. We are grateful for the FDA's commitment to this important work and their collaborative approach throughout the process. Our regulatory team has maintained excellent momentum and remain confident in our timeline and preparations for what will be a transformational launch for Crinetics. We've assembled an outstanding launch team of experienced professionals both in our headquarters and in the field who bring deep expertise in endocrinology and rare disease commercialization. The caliber of talent we've attracted speaks to the excitement around PALSONIFY and its potential impact on patient care. Recently, we hosted a group of more than 40 people living with acromegaly at our headquarters in San Diego as part of our ongoing engagement with the patient community. We have worked with the acromegaly advocacy group since before paltusotine entered the clinic. We continue to seek their insights to shape our commercial strategy. At this most recent patient event, I heard directly about their experiences with their disease and their interactions with the health care systems around the country. After talking with them personally, I am more confident than ever that PALSONIFY's profile addresses a critical unmet need that will make a very positive impact on all these patients' daily lives. Deeper in the pipeline, we continue to make progress towards initiating 4 additional pivotal programs. Trials of paltusotine for the treatment of carcinoid syndrome and atumelnant for the treatment of adult and pediatric congenital adrenal hyperplasia are ramping up now. We remain highly encouraged by the potential of atumelnant's novel mechanism of action in ACTH dependent Cushing's syndrome and following extensive conversations with multiple regulatory authorities, anticipate initiation of a Phase II/III study in the first half of 2026. The enthusiasm for our earlier pipeline continues to build. The Phase I/II study of CRN09682 in SST2 expressing solid tumors is ramping up and our work towards IND submissions across multiple additional discovery stage programs continue. As you may have seen, we've been extremely active at several key endocrinology conferences over the last few months, including ENDO 2025 last month in San Francisco. We delivered 6 poster presentations and 2 oral presentations covering PALSONIFY in acromegaly, atumelnant in CAH and our thyroid stimulating hormone or TSH receptor antagonist program. We also hosted product theaters and innovation sessions to highlight our pipeline's differentiation and met with key opinion leaders across the different indications we are pursuing. Among the presentations at ENDO was an update of CRN12755, our TSH receptor antagonist candidate, for the treatment of Graves' disease. We believe this novel mechanism of action has the potential to be a single oral therapy that addresses the core driver of Graves' disease in order to treat both Graves' hyperthyroidism and treat or prevent thyroid eye disease. Turning back to the launch of PALSONIFY. I'm energized by the team we've built, the progress we've made, the strength of our financial position and the opportunity to really transform the lives of people with acromegaly. With that, let me turn the call over to Isabel to tell you more.

Thank you, Scott. Turning to Slide 4. We are incredibly excited for the anticipated launch of PALSONIFY, our recently debuted brand name for paltusotine. This represents a combination of years of dedicated research and development to bring a new standard of care to patients with acromegaly. We have made meaningful progress in our interactions with health care professionals, patients and payers as we approach this milestone and complete our transition into a commercial stage company. Moving on to Slide 5. As Scott mentioned, Crinetics had significant presence at several prestigious medical meetings over the last few months with global key opinion leaders as well as with community endocrinologists. Our presentations across theaters at ENDO were at standing room only and health care professionals were excited to engage with our team to learn more about PALSONIFY. They were impressed with the new data from the open-label PATHFNDR-1 extension, which showed that paltusotine maintained control of both IGF-1 levels and symptoms through 96 weeks. Health care professionals were encouraged by this durability since many patients discontinue acromegaly treatment within a few years. They were also excited by the post-hoc analysis that demonstrated that treatment with paltusotine improved symptom stability over 3, 6 and 9 months time period relative to baseline treatments with injectable SRL. This data could present a compelling value proposition to patients improve both symptom control and ease of use. In addition, health care professionals were reassured by the stability of reduction of tumor volumes in patients who had MRI data throughout the OLE period for both PATHFNDR-1 and PATHFNDR-2. We believe that this OLE data demonstrating a stable or decrease in tumor volume over a long period will allow health care professionals to feel confident that paltusotine offers tumor control as well as symptom control and disease control. Turning to Slide 6. With that in mind, we have built out our commercial team and are in the process of onboarding our sales force ahead of launch. We will have approximately 30 sales representatives in the field supported by additional health care professional- facing roles, ensuring comprehensive coverage and support for our target prescriber base. We have been impressed by both the quantity and quality of candidates who have applied for our field roles and we are confident they represent the top talent in the industry with extensive experience in rare endocrinology and a high degree of motivation to bring PALSONIFY to patients. Now on to Slide 7. Our market research suggests that health care professionals perceive PALSONIFY as the preferred therapy among newly diagnosed patients due to its rapid reduction of IGF-1 levels and its accelerated titration time frame relative to monthly injectables. We believe there are 500 newly diagnosed patients per year who are candidates for pharmaceutical therapy. In addition, we believe that there are 11,000 currently diagnosed patients who have high unmet need and are candidates for PALSONIFY. We believe many of these patients might be unhappy with the current treatment options and will consider starting or restarting therapy if an effective, safe and convenient therapy were available. We are activating patients to demand more from their acromegaly therapy and believe many will want to switch to PALSONIFY over time. 90% of patients from our PATHFNDR-1 study who were previously on SRL treatment opted to continue on paltusotine treatment in the OLE study underscoring the unmet need for patients currently on injectable SRL. Other patients are on oral therapies like cabergoline that are not indicated for acromegaly and they might not have effective control of the disease. Patients on oral octreotide might be managing cumbersome twice daily fasting periods. It is clear that even oral therapies leave room for improvement on both biochemical and symptom control as well as ease of administration. In addition, we shared novel data on injectable SRL discontinuation rate during our science and innovation session at ESO. Over a 5-year follow-up period, nearly 80% of patients on injectable SRL did not persist with the newly started treatment regimen. Of those, about 2/3 discontinued treatment altogether. This data suggests that patients are dissatisfied with the current treatment options and highlight the need for expanded treatment options. Low persistence on injectable SRL when either discontinuing switching or carrying on represents an opportunity for providers and patients to select a therapy like PALSONIFY that can better serve patients' needs. These findings highlight the need for expanded treatment options. We hope that PALSONIFY can provide new option for patients who want a safe, effective and convenient treatment for their acromegaly. Lastly, we believe that there are at least 17,000 undiagnosed patients. Over time we believe we can help drive diagnosis and treatment for these patients. Moving to Slide 8. Our commercial strategy is not just based on growing market share in the naive and switch patients. It's about growing the market itself by bringing in patients who might have discontinued therapy, those that couldn't tolerate injections and those who are suboptimally treated and over time helping undiagnosed patients accelerate their treatment journey. We know that patient activation will be a key driver of potential uptake and have consequently launched our disease state education campaign and patient support hub well in advance. We are very pleased with the early results from this engagement initiative as this multichannel strategy will be essential. As we approach potential approval, our goal is to increase awareness, educate the community and ultimately empower patients to advocate for the best possible care. Turning to Slide 9. At this stage in our launch preparations, we have had numerous pre-approval meetings with commercial payers. We are also grateful for our ongoing engagement with CMS regarding Medicare and Medicaid coverage, particularly given all the changes occurring in the health care landscape. Payer groups have been receptive to PALSONIFY's value proposition, which includes faster disease control, lower treatment burden, symptom control and improved patient adherence. We expect that prior authorization activity will closely mirror the label we received for PALSONIFY and we are actively working with payers to ensure appropriate access pathways. Our extensive market research and Advisory Board feedback have revealed a strong demand among health care professionals for a new treatment option. Endocrinologists are eager to use PALSONIFY across multiple patient populations, treatment-naive patients, those currently on therapy and importantly, some patients who have been lost to follow up due to the burden of current injectable therapies. Based on our data and the feedback from health care professionals, patients and payers, we are more confident than ever in the long-term potential for PALSONIFY to become the preferred treatment for the acromegaly community and our commercial strategy is anchored in delivering on that promise. So we are deeply enthusiastic about the potential of PALSONIFY. I want to offer a few reminders on the expected cadence of launch. In the near term, there are several factors that will affect uptake after potential approval. First, we anticipate formulary placement will take at least 6 to 9 months after launch, which is consistent with other specialty pharmaceutical launches. Second, acromegaly patients see their endocrinologists relatively infrequently approximately 2 to 4 times per year. Consequently, we do not expect a bolus of patients on drug shortly after approval and instead expect adoption to gradually ramp in line with our outreach and engagement initiatives. We are all hard at work preparing for U.S. launch and we continue to progress in our international expansion in anticipation for a launch in Europe in 2026. With that, I will turn it over to Dana to provide regulatory and clinical update. Dana?

Thanks, Isabel. Turning to Slide 10. I'm pleased to provide an update on our regulatory progress across our pipeline, which continues to gain momentum on multiple fronts. Starting with paltusotine and acromegaly, our ongoing FDA review is progressing as expected through the review milestones reinforcing our confidence as we approach our September 25 PDUFA date. I'm particularly encouraged that the team we've been working with at FDA hasn't changed, which ensures important continuity throughout this critical review period. Our interactions with the European regulatory authorities also remain on track. Our medical affairs team continues to work in the field educating HCPs about acromegaly and sharing the data we presented at AACE, IPC and ENDO. These conferences are an opportunity to highlight our clinical results as well as our health economics and outcomes research. These presentations and resulting publications, much of which are derived from our clinical studies, are part of a broader strategic plan to generate and disseminate evidence of the unmet need in acromegaly and the role paltusotine could play. Turning to paltusotine in carcinoid syndrome. We're making steady progress with our Phase III program, currently have multiple sites up and running and continue to expect to enroll the first patient later this year. We are also making significant progress on atumelnant in CAH, which I will address in more detail shortly. We are revising our timelines for ACTH dependent Cushing's syndrome as we discuss with regulatory agencies how to best measure effective control given atumelnant's novel mechanism of action. Moving to our earlier stage pipeline. We presented data on our TSH candidate at ENDO. The data suggests it has the potential to be a once-daily oral therapy that treats Graves' disease, including both manifestations; Graves' hyperthyroidism and Graves' orbitopathy also known as thyroid eye disease or TED. Our mechanism of action has the potential to avoid the risk associated with ATDs in anti- IGF-1 therapy, including liver injury as well as hearing impairment and hyperglycemia. Lastly, we continue to work towards an IND submission for TSH and SST3 this year and for PTH in 2026. Turning to Slide 11. For atumelnant, we've achieved several important milestones in our CAH development program. As a reminder, we shared data on the first 3 cohorts of our Phase II study in January with the primary endpoint of reduction in androstenedione or A4. We added a fourth cohort earlier this year primarily to assess the effect of morning dosing of 80 milligrams of atumelnant and to study reduction of supraphysiologic glucocorticoid doses in addition to a reduction in A4. Cohort 4 is now fully enrolled with 10 patients and so far it continues to support the favorable benefit risk profile we've observed in our clinical trials to date. We will of course continue to monitor these patients very closely and communicate anything necessary in a timely manner. We intend to share the full data from Cohort 4 in early 2026. We also presented data at ENDO from the Phase II study in CAH, including the full results from the first 3 cohorts, additional detail on observed reductions in adrenal volume and reductions in novel biomarkers. Through these presentations, we continue to demonstrate our advancement of the understanding of the disease biology of CAH as exemplified by our data on the underrecognized role of 11 oxygenated androgens in CAH. We continue to expect to enroll our first participant in the Phase III trial in adult CAH by the end of this year. Additionally, our open-label extension study is actively enrolling, providing continued treatment access for patients. Moving to Slide 12. We are also making progress on our registrational trial for atumelnant in pediatric CAH. When we debuted our Phase III adult design last quarter, we outlined our ambition to assess normalization of both androgens and glucocorticoids and we hope to achieve the same with our operationally seamless Phase II/III design for pediatric patients. I am pleased to share with you the pediatric design. The study will consist of 3 parts. Part A is the Phase II, which is an open-label dose-finding 8-week study that will evaluate safety, efficacy and reduction of A4 and PK/PD. Part B is the Phase III, which will be a double-blind, placebo-controlled study that will assess safety and efficacy, including the ability to taper GCs. Part C is the open-label extension study for Parts A and B wherein patients from Part A will also have the opportunity to taper GCs. We believe our clinical trials are designed to demonstrate differentiation of atumelnant with an uncompromising endpoint and the goal of developing a new standard of care for patients with CAH. Overall, I am pleased with the significant progress we have made across our early and late-stage programs and we look forward to providing future updates on each. With that, I will hand the call to Toby to provide a financial update. Toby? Tobin C. Schilke Thank you, Dana. Turning to Slide 13. I'm pleased to review our financial results for the second quarter of 2025, which reflect our continued disciplined execution and strategic investment in advancing our pipeline and commercial capabilities. For the second quarter, we recognized $1 million in revenue from our licensing and supply agreements with our Japanese partner SKK. Our research and development expenses for the second quarter were $80.3 million compared to $76.2 million in the first quarter. This increase reflects our continued investment in pursuing multiple clinical programs, including progression of paltusotine for carcinoid syndrome, atumelnant for late-stage development and advancement of our novel non-peptide drug conjugate platform into first-in-human studies. Selling, general and administrative expenses were $49.8 million for the second quarter compared to $35.5 million in the first quarter. This increase primarily reflects our strategic investment in building commercial capabilities, including our field sales force and our broader corporate infrastructure as we prepare for PALSONIFY's launch. We used $77.8 million of cash on a net basis during the quarter reflecting continued clinical development and launch preparation activities. We ended the quarter with $1.2 billion in cash, cash equivalents and investments. As of July 29, 2025, we had approximately 94.2 million shares of common stock outstanding. On a fully diluted basis, we had 111.9 million shares outstanding. Moving to Slide 14. Looking ahead, we are lowering the high end of our guidance for net cash used in operations in 2025 and now expect to use between $340 million to $370 million compared to our previous guidance of $340 million to $380 million. This guidance reflects greater precision on clinical timeline estimates and prudent measures we have taken on overhead growth. We expect net cash used in operations in the second half of the year to be higher than in the first half of the year as our late-stage trials gather momentum and our commercialization activities accelerate into an anticipated approval. Based on our current operating plans and cash position, we maintain our guidance that our existing cash and investments will be sufficient to fund our operations into 2029. This provides us with significant runway to execute on multiple value-creating milestones, including the PALSONIFY U.S. launch and the advancement of our broader pipeline. With that financial overview, I'll now turn the call back to Scott for some closing remarks.

Founder, President, CEO & Director Thank you, Toby. Now turning to Slide 15. I want to emphasize the strong execution we're demonstrating across all aspects of our business. Our NDA for paltusotine remains on track with continued collaborative engagement with the FDA. I remain very confident about our launch readiness supported by the outstanding team we've assembled and our comprehensive corporate readiness for the upcoming launch. We expect multiple Phase III and earlier stage readouts across various programs up and down our pipeline over the next several years. We look forward to providing updates as our pipeline continues to mature. As we move through 2025, I'm excited about the opportunity ahead of us to introduce a potential new standard of care for acromegaly patients. We are well positioned to achieve multiple value-creating milestones that will transform Crinetics into the premier endocrine-focused global pharmaceutical company. Thank you all for your continued support. And with that, I'll hand the call back to the operator to begin the Q&A. Please limit yourselves to 1 question, 1 question only, in the interest of time. Operator?

[Operator Instructions] Our first question comes from Joe Schwartz from Leerink Partners.

Congrats on all the progress. Neurocrine seems to be doing quite well with the CRENESSITY launch. I was just wondering how does that figure into your thinking about the pace of enrollment for your Phase III CAH studies now, if at all? And are there any particular kinds of patients who are more likely to go on to CRENESSITY commercial versus enroll in a clinical study for atumelnant? Does that sound like for any kinds of patients in your view?

Founder, President, CEO & Director Joe, thanks for the question. So look, I think that the launch from CRENESSITY is a great thing for patients with CAH and the momentum of that launch shows some of the unmet need that's out there. And in terms of impact on our enrollment in our Phase III, either adult or pediatrics, actually I think it's a positive. In general it's raising awareness on multiple fronts of the disease. And I think that as another nuance, in general most of these studies, the bulk of our enrollment has been outside the U.S. not inside the U.S. just because of treatment patterns in the different regions. So generally I think it's all positive for patients. And maybe just ask Dana if she wants to comment or Alan on kind of the patient population that we're treating.

Yes. I think 1 interesting difference between their indicated population and what we're trying to achieve in our Phase III is that we're looking at a broader patient population because the way we look at it is it's sort of a spectrum and there are patients who have high A4 and high GCs. There are patients that have just high A4 and are not on GCs. And then there's others with normal A4 and high GCs. We think that all of those patients can benefit from atumelnant. So in one sense, it's a much broader population. So that is a big distinction and does sort of reflect how we view this particular mechanism of action as addressing sort of the full spectrum of the disease.

Our next question comes from Tyler Van Buren from TD Cowen.

This is Frances on for Tyler. So just curious if you could elaborate on the timelines for the IND submissions of the TSH and SST3 agonist. Are you still targeting 2025?

Founder, President, CEO & Director Maybe, Steve, you want to give some color on that. Stephen F. Betz Yes. Thanks for the question. Those IND-enabling work is all still in progress. We are targeting the end of the year. I don't have particular granularity past that, but that's certainly what we're aiming for for both molecules.

Our next question comes from Jessica Fye with JPMorgan.

This is Abdul on for Jess. Can you speak to your comfort level with current consensus numbers for the paltusotine launch?

Founder, President, CEO & Director I'll let Toby take that one. Tobin C. Schilke It's not typical for companies at this stage or prudent to comment on consensus. We haven't given guidance. So that's where we are right now. We feel comfortable though on the launch preparation and the progress we're making with the FDA.

[Operator Instructions] Our next question comes from Maxwell Skor from Morgan Stanley.

This is [ Selina ] on for Max. For the global CAH Phase III study, what are your expectations around placebo response and any potential impacts from different geographies?

Founder, President, CEO & Director Dana or Alan, do you want to comment?

Yes, sure. I think that we have a pretty ambitious endpoint as we've talked about for the adult trial and we are not really expecting a very high placebo response rate at all. So again, we're setting it up so that you have to sort of address both the A4s and have a reduction in GCs to physiologic levels. So in our mind regardless of which part of the spectrum of CAH you're in, it will be very difficult for a placebo patient to meaningfully change where they are. So that's kind of the way we're looking at it.

Our next question comes from Yasmeen Rahimi from Piper Sandler.

This is Liam on for Yas. Just in regard to PALSONIFY, we were wondering if you plan to provide color on pricing at the time of approval? And then also with like your current payer work, how much do you understand about the level of flexibility you might have to price when compared to like current SSR injectables?

Founder, President, CEO & Director Yes. So obviously we'll be discussing price at the right time after what we hope will be an approval soon. But Isabel, maybe you want to talk a little bit about the payer side of things.

Yes. Thank you very much for the questions. So we have continued to make progress in our discussions with payers and the value proposition continues to resonate and is very positive the feedback that we are getting from them. They understand that current treatments, particularly SRLs had a high burden of treatment and there is significant waste with many of the patients, 1/3 of the patients exactly taking more than 13 injections a year. So we continue to partner with them. We continue to reinforce the clinical value of the treatment. And at this time, we are not commenting further on price.

Our next question comes from Josh Schimmer from Cantor.

I guess given how much scrutiny there was on the cases of LFT elevation that we're seeing with atumelnant, can you provide an update on the ongoing experience and whether that's been seen subsequently? And how do you plan on kind of maintaining updates going forward on that liver tox profile and whether it is turning into a meaningful signal or the opposite?

Founder, President, CEO & Director I think we've said before, we're kind of surprised at the scrutiny on that 1 patient we saw earlier and we're very comfortable with the emerging and growing experience that we're gaining with it. And in terms of updates on it, I think it warrants updates as the data matures and we have something meaningful to share. We should remind everybody that this is part of a much larger program. We're enrolling patients into the open-label extension from the Phase IIs. We're starting to activate sites and we'll be enrolling patients in the adult study and then the pediatric study. And so I think that kind of emerging experience will give people more and more comfort. And if there's a big problem, obviously we'd have to let people know. So I think no news is good news on that front.

Our next question comes from Alex Thompson from Stifel.

This is Seth on for Alex. We just had a question about PALSONIFY and just how many patients are on the OLE and how quickly do you expect them to transition to commercial treatment once approved and launched?

Founder, President, CEO & Director Yes. Maybe we'll let -- well, this could be anybody answering this one. But I will remind you that we have patients all around the world not just in the U.S. So maybe Isabel or Dana, you want to comment on that transition.

The open-label extension, as Scott mentioned, is ongoing in numerous countries. And with the U.S. approval, there will be -- we'll have to see what the outcome of the regulatory interactions are. But I think that once the company has reached a PDUFA date and we've had a successful outcome, we can make a decision about what happens with those patients. And it's really only a small number of the patients that are in the U.S. that would be sort of potentially enrolled on to commercial drug.

Our next question comes from Gavin Clark-Gartner from Evercore ISI.

This is Yash on for Gavin. Just a quick question from our end. You shared that Cohort 4 of the adult Phase II for CAH is going to read out in early 2026. We're wondering if we could also expect any OLE data with this update?

Founder, President, CEO & Director This is Scott again. But look, I think we'll have a broader update on the whole program. Remember, in addition to that cohort and the OLE, we should be getting deep into then the ramping up of the adult CAH study, the pediatric CAH study and we'll need to provide some clarity then on the Cushing's disease program as well. So I think there's going to be a ton of things to talk about around atumelnant in the not too distant future.

Our next question comes from Rich Law from Goldman Sachs.

How much do you think you can learn based on atumelnant's Cohort 4 with only 10 patients? And I assume there's going to be data variability. Is there a chance to adjust the Phase III protocol based on what you learn in that cohort 4 since you're starting the Phase III study before you see the Phase II data?

Founder, President, CEO & Director Yes. I think that's a good point. As a reminder, it's only 10 patients and we've got quite a few more patients hopefully going into the OLE. But maybe, Dana, you want to talk about just the process around protocols?

Well, sure. As we mentioned Cohort 4, one of the interesting questions that we were trying to understand better is the difference between AM and PM dosing. We've already decided in the Phase III that it's going to be PM dosing. I think the information for that will be useful afterwards, right, in terms of eventually potentially trying to understand whether patients need that kind of flexibility going forward. But we are really locked and loaded for the Phase III. As Scott and we have mentioned before, the sites are already getting started and we expect the first patients in soon. So we really aren't planning on making any changes in the protocol right now.

[Operator Instructions] Our next question comes from Cory Jubinville from LifeSci Capital.

When we look to some of the competitive readouts in CAH, the criteria for GC dose reductions were a reflection of maintaining A4 levels within that 120% of baseline values. However, that was based on the pre-GC dose A4 levels. And when we look to the A4 component and the primary endpoint that you're using for [indiscernible] in BALANCE studies, that's based off of post GC dose A4. Obviously A4 is expected to be lower after a patient takes their morning GC dose. But can you just provide a bit of context as to why specifically you selected post-GC A4 as part of the primary endpoint and how should we be thinking about the clinical relevance of assessing efficacy pre-GC versus post-GC on androstenedione?

Founder, President, CEO & Director Yes. I think that's a good question, Cory. Just a reminder that I don't think that keeping A4 levels at 120% of what might be a very high baseline is all that great of a treatment goal for the person dealing with their CAH and we believe they should be getting down to normal or very close to it. But Alan, maybe you want to talk about some of those nuances in post and pre-GC dosing. And I'll remind you, Cory, that between the primary and the secondary endpoints, we're looking at both. And just as I always encourage everybody, it's the overall profile of the drug that's really important in addition to the primary endpoint.

Yes. So it is true that when you administer glucocorticoid, you would expect in this patient population for the A4 level to go down and that is kind of what the regulatory precedent that was set in the CRENESSITY trials established. That is the optimal time to measure A4 with respect to looking at the trough level of androgen exposure with the treatment regimen to include the drug plus the glucocorticoid. We use that partly because it's a precedent, but also because it helps to facilitate variability assumptions for sample size calculations. With those assumptions, we know we have a very well-powered trial here in Phase III.

Our next question comes from Brian Skorney from Baird.

This is Charlie on for Brian. We just kind of wanted to dig in a little bit into what you anticipate distribution looking like? And along those lines, if you anticipate PALSONIFY getting captured in data services like IQVIA for example?

Founder, President, CEO & Director Isabel, you want to respond?

Sorry, I couldn't hear the question well.

Yes. So I was wondering just what you anticipate distribution looking like for PALSONIFY and if you anticipate it getting captured in data services like IQVIA for example?

Thanks for the question. Yes, we had created our distribution system and it's going to be a closed distribution system at this point. So we are not planning to make that data available. It will be blocked. We want to make sure that we are able to track the launch and see the uptake in different segments that is not going to be widely available.

Our next question comes from Jon Wolleben from Citizens.

This is Catherine on for John. I have a quick question about Cushing's disease. And just if you could provide a little bit more color on kind of discussions on what potential endpoints you're looking at and kind of how the endpoint would differ for your mechanism versus kind of some of the other drugs that have been approved in the indication.

Founder, President, CEO & Director Alan, do you want to take that?

Yes. So the primary endpoint for Cushing's disease trials generally is normalization of 24-hour urine-free cortisol excretion. This is a measure of integrated cortisol exposure over a 24-hour period of time and approvals are usually based on the proportion of patients who achieve normal urine free cortisol. I mean I think atumelnant is uniquely situated here in several ways. One is in our trials to date, again we're running a single center trial at the NIH and we will be starting larger trials soon. But what we're seeing so far is a very rapid normalization of urine-free cortisol in pretty much all of the patients tested so far. The rapidity I think is unprecedented and the treatment duration at the NIH is 10 days and within less than 10 days, we are seeing normalization of urine free. So I'm very excited to expand these trials to increase the duration of treatment and to enroll more patients to hopefully see this as a consistent finding. And if so, I think we have kind of a real new level of treatment for Cushing's disease here.

Our next question comes from Andy Chen from Wolfe Research.

Brandon on for Andy. You stated earlier that acromegaly patients see endos 2 to 4 times a year, which could lead to a slower start to the launch. But should this approval draw patients to see their docs regardless of their cadence throughout the year? And further, when do you expect patients to start flowing in?

Founder, President, CEO & Director Yes. I think this is almost something we can answer for ourselves just based on personal experience in most health care systems how long it takes to get to see a specialist, which is unfortunate but true. But Isabel, maybe you want to comment more specifically on the question.

Yes. Most patients are visiting their doctor every 6 months or once a year. Of course we are working actively in our engagement with advocacy and our activities in patient activation, as I mentioned it before, to get patients to proactively search for those appointments and move them. But we know that that will take time and that's why we are cautious that at the beginning it will take some regular rhythm of patients going to the providers and our goal is to accelerate it, but we recognize that that will be one of the barriers early on.

[Operator Instructions] Our next question comes from David Lebowitz from Citi.

It's Ross on for David. I guess I had a question on Graves' disease. It seems like a TSH agonist or antagonist is an obvious disease modifying mechanism yet other people are pursuing other targets. I guess why do you think there hasn't been a TSH antagonist successfully developed? And what do you guys think you're doing differently now with that in mind?

Founder, President, CEO & Director Well, this is Scott. I think that this is right in our sweet spot and you could ask that same question about almost any of our programs. So these are very difficult targets to address. We've built a capability for this over now 17 years at Crinetics. But Steve, maybe you want to comment a little bit on what it's taken us to manage to crack this one as well as some of the other programs. Stephen F. Betz Yes. Thanks for the question. I do think this is -- if you look at TSH antagonism for the treatment of Graves and the treatment of thyroid eye disease and you know that from a mechanistic standpoint, blocking the action of the receptor is the right thing to do if you can make the right molecules. But I think as Scott said, this is what we do for CAH and for Cushing's, the right thing to do is block the action of the ACTH receptor. So the right thing for hyperparathyroidism is to block the PTH receptor. And so rather than find kind of an end around to try and get an effect, we work to find the right molecules at the right receptors that will produce the right pharmacology that these patients need. And we have everything from the medicinal chemistry skills and the drug development skills and the understanding of biology and receptor pharmacology to kind of put all those pieces together to find the right molecules.

Our next question comes from Douglas Tsao from H.C. Wainwright.

Congrats on the progress. I'm just curious in terms of the BALANCE CAH study, in terms of Part B for the GC tapering, I'm just curious will that replicate what we see or the same protocol that will be used in [ COM CH ] because I believe there's sort of glucocorticoids reduction periods followed by sort of GC stable periods and I think it takes place over 2 sort of periods. Is that what you're going to be doing in the BALANCE CAH study as well?

Founder, President, CEO & Director Yes. Dana or Alan, do you want to take that on study design?

Yes. So I think what you were asking, Douglas, about the pediatric Phase III part, right? And what we're trying to do, it's not exactly the same, but we're trying to demonstrate both efficacy at reduction in A4 and getting GCs tapered, right? But I think in the pediatric space, you're always a little bit more cautious with the kids. And so we have a little bit more flexibility in terms of how the GC reductions take place. And I think that that is kind of going to be a little bit reflected in the mechanisms of how the investigators carefully titrate them down. But what we're looking for is to get patients to normal A4 and then keep trying to titrate them down.

And is it set in the protocol for investigators to titrate down or is that investigator discretion?

Well, that is the objective of the protocol is to get them to reduce the GCs as much as they can.

But there's no time when they have to achieve it or by 25 weeks or something of that order?

Yes, there is an endpoint to the trial. And so they're expected to be on stable GCs for a 4-week period before the end of the trial. 28 weeks. So from 24 to 28 weeks, it's stable.

Our next question comes from Rohan Mathur from Oppenheimer.

This is Rohan. At the moment, just given the timelines for the adult and pediatric trials, how does Crinetics plan to manage the progression towards NDA submission and labeling discussions while incorporating the data from both of those studies down the line?

Founder, President, CEO & Director Dana, do you want to take that one?

Well, yes, thanks for the question. And the way that we look at it is we're looking at each one of those as a distinct submission and so I don't think that we'll necessarily hold one until the other one gets done. So whatever gets done first, which the Phase III for the adults is definitely almost begun in Phase III. So that should be done before the pediatric one. And so the way that we look at it is we will submit that. Hopefully, it will be successful and then we'll do an amendment or a supplement to add the pediatrics.

Our next question comes from Catherine Novack from Jones.

JonesTrading Institutional Services, LLC, Research Division I'm just curious on your thoughts on paltusotine in surgically naive patients based on the AAC presentation. Is there a market here? Is there a significant number of patients who do forego surgical resection?

Founder, President, CEO & Director Let me let Isabel answer that one.

Well, as you know, we have a label that based on PATHFNDR-1 and PATHFNDR-2 pending the FDA review look at naive and also switching patients. When it comes to presurgical patients, we are very excited about the data that we were able to present at ENDO and we also believe that there is an unmet need. But at this time, we are actively considering that segment. We believe that if physicians see that there is an opportunity and pending our label, that might be an opportunity in the future.