Corcept Therapeutics Incorporated
Q3 2015 Earnings Call Transcript

Published: 8 Nov 2015

[Operator:]

Hello and welcome to the Corcept Therapeutics conference call. [Operator Instructions] Please note this conference is being recorded. I would now turn the call over to Charlie Robb, CFO. Charlie Robb, you may begin.

[Charlie Robb:]

Thank you. Good afternoon. My name is Charles Robb, Corcept’s Chief Financial Officer. Joining me today is Dr. Joseph Belanoff, our Chief Executive Officer. Thank you all for participating in the call. Earlier today we issued a news release giving our third-quarter 2015 summary financial results and the corporate update. To get a copy of this release, go to Corcept.com and click on the investors tab. Complete financial results will be available in our third-quarter 10-Q. Today’s call is being recorded. A replay will be available through November 19 at 1-888-843-7419 from the United States and 1-630-652-3642 internationally. The passcode is 41022099. Before we begin I want to remind you that any statements during this goal other than statements of historical fact are forward-looking statements subject to known and unknown risks and uncertainties that might cause actual results to differ materially from those expressed or implied by such statements. Forward-looking statements include statements regarding our anticipated revenues and expenses for 2015 and beyond, the pace of Korlym’s acceptance by physicians and patients, the anticipated contribution of our sales organization to our revenue growth and earnings, the cost and timing of preclinical and clinical trials and the results of such trials, the clinical attributes and advancement of our next-generation selective cortisol modulators, the protections afforded by Korlym’s orphan drug designation for Cushing’s syndrome or other intellectual property rights including our patent concerning the use of glucocorticoid receptor antagonists to treat triple negative breast cancer or the cost, pace and success of our product and development efforts. These and other risks are set forth in our SEC filings which are available at our website Corcept.com or from the SEC’s website. We disclaim any intention or duty to update any forward-looking statements made during this call. Now I will review our third-quarter financial results. Corcept’s net revenue in the third quarter was $13.3 million compared to $7.3 million in the third quarter of 2014, an 82% increase. We are reiterating our 2015 full-year revenue guidance of $49 million to $53 million. Our GAAP net loss in the third quarter was $600,000, or $0.01 per share compared to $6 million or $0.06 per share in the third quarter of 2014. The third quarters of 2015 and 2014 included non-cash expenses of $2.2 million and $2.1 million respectively. Excluding these non-cash items we generated net income on a non-GAAP basis of $1.6 million in the third quarter of 2015 compared to a non-GAAP net loss of $3.9 million in the same period last year. A reconciliation of GAAP to non-GAAP income and losses is provided in our press release. Our cash balance on September 30, 2015 was $36.5 million compared to $37 million one quarter ago. The reduction in our cash balance includes the repayment of $1.8 million in principal under our capped royalty financing arrangement. We expect to make our final payment under that arrangement sometime in 2017. Based on our current plans and expectations, which include fully funding our Cushing’s syndrome franchise, completing our Phase 1/2 study of Korlym for the treatment of triple negative breast cancer and if that study produces positive results conducting a Phase 3 study, advancing CORT125134 to Phase 2 studies in both Cushing’s syndrome and in on oncology indication, advancing to the clinic at least one more of our next-generation compounds and repaying the balance of our capped royalty financing obligation we believe we will reach cash flow breakeven without needing to raise additional funds. I will now turn the call over to Dr. Belanoff. Joe?

[Joseph Belanoff:]

Thank you, Charlie, and thank you all for joining us. Corcept is the leader in developing and commercializing medications that modulate the effects of cortisol, widely known as the stress hormone. Our research and research carried out by the dozens of academic investigators with whom we collaborate has shown that cortisol modulation has therapeutic potential in many serious illnesses including oncologic indications such as triple negative breast cancer, ovarian cancer, and castrate resistant prostate cancer, psychiatric indications such as alcohol and cocaine dependence, metabolic indications such as antipsychotic induced weight gain and non-alcohol fatty liver disease and of course Cushing’s syndrome which our first commercial medication Korlym has been approved to treat. We are taking significant steps to develop our cortisol modulation platform. We will present initial efficacy data from our Phase 1/2 study trial of Korlym for the treatment of triple negative breast cancer at the San Antonio Breast Cancer Symposium on December 10. We plan to enter our lead next-generation cortisol modulator, CORT125134, in two Phase 2 trials

[Operator:]

Thank you. We will now begin the question-and-answer session [Operator Instructions] We are now waiting for any questions. Our first question is Charles Duncan, Piper Jaffray. Please go ahead.

[Sarah Weber:]

Hi, thanks, this is Sarah Weber on for Charles. Congratulations on the progress today.

[Joseph Belanoff:]

Thank you.

[Sarah Weber:]

I had one question about timing with the triple negative breast. When will the decision be made about moving forward into Phase 3? And if you do decide to do that when could we see a trial up and running?

[Joseph Belanoff:]

Thank you very much for the question. And I’m glad to give you the guidance we can give you right now. As you said our initial results will be able to be presented at the San Antonio Breast Cancer Meeting in December and as you can tell when you look us up on clinicaltrials.gov we’re still actually enrolling patients in that study and that study has a bit of time still to run. We’ll make a decision about going to Phase 3 when we have all of our results in hand, which we expect actually to be in the very early part of next year. So we’ll see where that goes. I can give you a definitive date but we expect results to be full enough in the not so distant future to be able to make that decision.

[Sarah Weber:]

Okay thanks. That’s helpful. And then in terms of all the different academic cooperations that you have going on, what’s some of the next data that we could see from those?

[Joseph Belanoff:]

We think that actually a lot of data will emerge in the next 12 to 18 months and I appreciate that you’re following that. So for instance one of the things I mentioned already was the trials which are being run at the University of Chicago in ovarian cancer and in prostate cancer. Now one of the issues with investigator studies is that we at the Company don’t control their exact timing and when their readouts are. But based on our expectations those are two important studies which are going to produce results in the next 12 to 18 months. So that’s really an important set of data. Just to mention a couple of the others, we expect that we will see results from our alcohol dependence study that’s being run by the group at Scripts and we expect that the posttraumatic stress disorder study, which is being run as a VA Consortium study, will also produce at least preliminary results on that timeframe.

[Sarah Weber:]

In the next 12 to 18 months in other words?

[Joseph Belanoff:]

Yes, although again I just want to point out that unlike a Corcept study we have less control about the ultimate release date for that information. But based on our observation of how they are doing we think that that medium-term timeframe is about correct.

[Sarah Weber:]

Okay and then just one more if I might. You mentioned that the 125134 might have superior potency in oncology. Is there any chance that you would switch over to that compound to pursue in triple negative breast?

[Joseph Belanoff:]

The answer to that is we’re first waiting to see our results from our Korlym study but our expectation, you know that’s a drug that we know a lot about, and our expectation is that we will actually advance those programs in parallel. We obviously know lots and lots about Korlym. We have good preliminary results from the first University of Chicago study and we’re very optimistic about CORT125134 but we haven’t yet treated it in a patient who actually has cancer. So we’ll have to see where those go as we go along. But I think it’s very important for you and the whole audience to know is that the Korlym study in triple negative breast cancer is not a proof-of-concept study. It really is a study with the intent to extend our label of Korlym into that disease.

[Sarah Weber:]

Great, thanks for taking the question.

[Joseph Belanoff:]

Sure.

[Operator:]

Thank you. Our next question is from Tazeen Ahmad with Bank of America. Please go ahead.

[Tazeen Ahmad:]

Hi, thanks for taking my question. Just on the mifepristone data that you are expecting at San Antonio breast, how many patients total do you expect to enroll in the trial and how many patients should we expect to see data for in December, on December 10?

[Joseph Belanoff:]

As we mentioned before we expect to have 20 patients in total in the study and we haven’t yet said how many patients you’ll see data on in December. So I guess the best I can tell you is you will have to wait and see the poster.

[Tazeen Ahmad:]

Okay, and then I guess based on your experience thus far, how long would you expect the Phase 3 trial to enroll? Like you said there’s nothing available FDA approved so there shouldn’t be trouble finding patients to enroll but just in terms of logistics how many patients do you think you would need in a Phase 3 trial? And how long do you think it would be to enroll that?

[Joseph Belanoff:]

Well this is of course all preliminary information based on results we expect to see and obviously the powering of the study is going to be the results we see in the Phase 2 study will have strong bearing on that. But our general expectation is that this is a study that’s probably going to be on the order of 300 to 350 patients. Now how long will it take to run? Those are always a little tougher guesses to make but I’m guessing, and it really is just considered speculation at this point, that start to finish first patient into last patient out is on the order of a couple of years.

[Tazeen Ahmad:]

Okay. And so what kind of data would you consider to be positive data in San Antonio in a couple of weeks?

[Joseph Belanoff:]

You know I’m just going to take an opportunity only because you’ll be hearing a lot from him in the future to introduce you to Robert Fishman who is our Chief Medical Officer and let him answer that question for you. So first time you’ve heard from Bob, but pleased to introduce him.

[Robert Fishman:]

Hi, good afternoon. Thanks so much for your question. So to put it in context as you know these are very sick patients who had at least two prior rounds of chemotherapy and as you know as well we’ll be evaluating patients in two main ways as Joe mentioned. The first is the standard resist criteria as well as objectively, in other words do they feel better. And so we’re continuing to collect data on all the patients and we’ll make the decisions about the next steps as all of the outcome adjudications are collected which is going on now and continuing.

[Tazeen Ahmad:]

I guess maybe just to delve a little bit further, because there is no therapy available would you consider the bar for what you would need to see to advance this trial forward would be low? Are you looking for increase in survival? What is it that you’re really looking for here?

[Joseph Belanoff:]

Yes, let me answer that question. So I do want to confirm what you said. This is a very sick group of patients and unfortunately their clinical path is often like a falling knife. The literature really indicates that the average length of time between metastases and death is close to six months for these patients. They are very, very ill. And so as a consequence I do think other than separate from other diseases the bar for showing an improvement is lower than many other diseases because in fact these patients are so sick. So in some sense the course that people are expecting is a rapidly progressing disease and obviously anything we do which prevents that from happening or any medicine that prevents that from happening is a beneficial thing and in some sense the more the better. If you can actually make the tumors decline in size or go away entirely that probably is at least somewhat indicative of being able to extend people’s life. But at this point in time we expect that for a Phase 3 trial the endpoint would be progression-free survival. I think that’s what the FDA would be looking for.

[Tazeen Ahmad:]

Okay, all right, thanks very much.

[Operator:]

[Operator Instructions] Sorry, go ahead.

[Joseph Belanoff:]

I was just going to say it looks like we’ve exhausted our questions. So I wanted to thank everyone for dialing in and look forward to speaking to you next quarter. And hoping that you will read all of our releases between now and the next quarter.

[Operator:]

Thank you. Ladies and gentlemen, this concludes the Corcept Therapeutics conference call. Thank you all for participating. You may now disconnect.