Corcept Therapeutics Announces Third Quarter 2013 Financial Results and Corporate Update

Corcept Therapeutics Announces Third Quarter 2013 Financial Results and 
Corporate Update 
MENLO PARK, CA -- (Marketwired) -- 11/07/13 --  Corcept Therapeutics
Incorporated (NASDAQ: CORT), a pharmaceutical company engaged in the
discovery, development and commercialization of drugs for the
treatment of severe metabolic and psychiatric disorders, today
reported its financial results for the quarter ended September 30,
2013. 
Third Quarter Financial Results 


 
--  Recognized net revenue of $2.6 million, compared to $1.9 million in
    the previous quarter, an increase of 39 percent. Our revenues would be
    about approximately 20 percent higher if patients who are receiving
    Korlym but cannot pay for it could pay for it. Our expectation is
    that, as the Affordable Care Act enables these patients to obtain
    health insurance in 2014, they will become paying customers.
--  Recorded a GAAP net loss of $10.9 million, or $0.11 per share,
    compared to a net loss of $11.9 million, or $0.12 per share in the
    previous quarter. After adjusting for significant non-cash expenses,
    net loss on a non-GAAP basis was $0.08 per share, compared to $0.10
    per share in the previous quarter. A reconciliation of GAAP net loss
    to non-GAAP results is included in this press release.
--  As of September 30, 2013, we held cash and cash equivalents of $63.2
    million.

  
Operational Highlights 


 
--  Enrolled patients at a faster rate than projected in our phase 3 study
    of the use of mifepristone, the active ingredient in Korlym(R), in
    the treatment of psychotic depression. We now expect to perform an
    interim analysis of data from this study and report its results in the
    second quarter of 2014, one quarter earlier than previously reported.
--  Submitted our Marketing Authorization Application to the European
    Medicines Agency (EMA) for approval to promote Korlym for endogenous
    Cushing's syndrome in the European Union under the brand name
    Corluxin(R). We expect initial feedback and questions from the EMA
    in the first quarter of 2014.
--  Licensed from the University of Chicago patent rights covering the use
    of competitive glucocorticoid (GR) antagonists, including
    mifepristone, in combination with chemotherapy i
n the treatment of
    triple-negative breast cancer, a form of breast cancer typically with
    a poor prognosis. On December 12th, the University of Chicago plans to
    report the findings from the first human study using mifepristone to
    help treat metastatic triple-negative breast cancer at the San Antonio
    Breast Cancer Symposium.

  
"We had an excellent third quarter, as evidenced by our nearly 40
percent increase in revenue," said Joseph K. Belanoff, M.D.,
Corcept's Chief Executive Officer. "Our Cushing's syndrome business
added new prescribers in every part of the country. Many physicians
with one patient taking Korlym found that the drug worked and wrote
prescriptions for second and third patients. With greater visibility
into the business, we can now provide revenue guidance for the
balance of 2013 and will provide revenue guidance for fiscal 2014 at
our year-end conference call." 
"We also advanced our other strategic priorities," said Dr. Belanoff.
"Enrollment in our phase 3 trial for the treatment of Psychotic
Depression accelerated. We now expect to report results of our
interim analysis in the second quarter, earlier than expected. In
addition, investigators at the University of Chicago will present
findings from the first study of mifepristone combined with
chemotherapy to treat women with metastatic triple-negative breast
cancer at the Breast Cancer Symposium in San Antonio on December
12th."  
Financial Results  
For the third quarter of 2013, we recognized net product revenue of
$2.6 million. Cost of sales for the third quarter of 2013 was
$40,000. Because we expensed product manufacturing costs incurred
prior to FDA approval, our cost of sales in the third quarter of 2013
consisted primarily of stability testing and distribution costs. 
We reported a net loss of $10.9 million, or $0.11 per share, for the
third quarter of 2013, compared to a net loss of $8.3 million, or
$0.08 per share, for the third quarter of 2012.  
The net loss for the third quarter of 2013 and the third quarter of
2012 included significant non-cash stock-based compensation expenses
of $1.3 million and $1.0 million, respectively. In addition, we
accreted non-cash interest expense related to our capped royalty
financing transaction of $1.1 million in the third quarter of 2013
and $575,000 in the comparable period in 2012. After adjusting for
these non-cash expenses, the company's net loss on a non-GAAP basis
was $8.5 million, or $0.08 per share, for the third quarter of 2013,
compared to $6.7 million, or $0.07 per share, for the third quarter
of 2012. A reconciliation of GAAP net loss to non-GAAP net loss is
included below. 
Operating expenses for the third quarter of 2013 were $12.4 million,
compared to $8.7 million for the corresponding period in 2012. 


 
--  Selling, general and administrative expenses in the third quarter of
    2013 were $7.2 million, compared to $5.7 million for the comparable
    period in 2012. The increase was primarily due to increased staffing,
    consultancy, contracted sales force and other professional services
    costs to support the commercialization of Korlym.
    
    
--  Research and development expenses in the third quarter of 2013 were
    $5.2 million, compared to $3.0 million for the comparable period in
    2012. The increase was primarily due to increased clinical trials
    costs, staffing and consultancy to support the expansion of our phase
    3 trial of mifepristone for the treatment of psychotic depression, the
    development of our next-generation selective GR-II antagonists and the
    preparation of the regulatory submission to the EMA for approval of
    Corluxin for Cushing's syndrome in Europe.

  
Our cash balance as of September 30, 2013 was $63.2 million, as
compared to $93.0 million at December 31, 2012, and reflects
approximately $29.4 million spent on operations during the first nine
months of 2013. 
Financial Guidance 
Fulfilling our commitment to provide revenue guidance as soon as
clear trends in our business were established, we expect revenue for
2013 to be approximately $9.6 million. We will provide revenue
guidance for fiscal year 2014 at our year-end conference call in
February 2014. 
Conference Call 
Corcept will hold a conference call on November 7, 2013, at 5:00 p.m.
Eastern Time (2:00 p.m. Pacific Time) to discuss this announcement.
To participate, dial 1-888-771-4371 in the United States or
+1-847-585-4405 internationally approximately ten minutes before the
start of the call. The pass code is 35967600. 
A replay of the call will be available through November 21, 2013 at
1-888-843-7419 from the United States and +1-630-652-3042
internationally. The pass code is 35967600. 
About Cushing's Syndrome 
Endogenous Cushing's syndrome is caused by prolonged exposure of the
body's tissues to high levels of the hormone cortisol and is
generated by tumors that produce cortisol or ACTH. Cushing's syndrome
is an orphan indication that most commonly affects adults aged 20 to
50. An estimated 10-15 of every one million people are newly
diagnosed with this syndrome each year, resulting in over 3,000 new
patients annually in the United States. An estimated 20,000 patients
in the United Sta
tes have Cushing's syndrome, approximately half of
whom are cured by surgery. Symptoms vary, but most patients have one
or more of the following manifestations: high blood sugar, diabetes,
high blood pressure, upper body obesity, rounded face, increased fat
around the neck, thinning arms and legs, severe fatigue and weak
muscles. Irritability, anxiety, cognitive disturbances and depression
are also common. Cushing's syndrome can affect every organ system in
the body and can be lethal if not treated effectively.  
About Korlym(R) 
Korlym competitively antagonizes the glucocorticoid receptor type II
(GR-II), one of the two receptors to which cortisol normally binds,
thereby inhibiting the effects of excess cortisol in Cushing's
syndrome patients. In April 2012, Corcept made Korlym available as a
once-daily oral treatment of hyperglycemia secondary to endogenous
Cushing's syndrome in adult patients with glucose intolerance or
diabetes mellitus type 2 who have failed surgery or are not
candidates for surgery. Korlym was the first FDA-approved treatment
for that illness and the FDA has designated it as an Orphan Drug for
that indication. Orphan Drug designation is a special status designed
to encourage the development of medicines for rare diseases and
conditions. Because Korlym is an Orphan Drug, Corcept will have
marketing exclusivity for the approved indication in the United
States until February 2019.  
About Psychotic Depression 
Psychotic depression is a serious psychiatric disorder that affects
approximately three million people annually in the United States. It
is more prevalent than either schizophrenia or bipolar I disorder.
The disorder is characterized by severe depression accompanied by
delusions, hallucinations or both. People with psychotic depression
are approximately 70 times more likely to commit suicide than the
general population and often require lengthy and expensive hospital
stays. There is no FDA-approved treatment for psychotic depression. 
About Corcept Therapeutics Incorporated 
Corcept is a pharmaceutical company engaged in the discovery,
development and commercialization of drugs for the treatment of
severe metabolic and psychiatric disorders. Korlym, a first
generation competitive GR-II antagonist, is the company's first
FDA-approved medication. The company has a phase 3 trial underway for
mifepristone for treatment of the psychotic features of psychotic
depression and a portfolio of selective GR-II antagonists that
competitively antagonize the effects of cortisol but not
progesterone. It owns extensive intellectual property covering the
use of GR-II antagonists, including mifepristone, in the treatment of
a wide variety of metabolic, psychiatric and other disorders. It also
holds composition of matter patents for its selective GR-II
antagonists. 
Non-GAAP Measures  
To supplement Corcept's financial results presented on a GAAP basis,
we use a non-GAAP measure of net loss that excludes significant
non-cash expenses related to stock-based compensation expense and the
accretion of interest expense under our capped royalty financing
transaction. We believe that this non-GAAP measure of net loss helps
investors better evaluate the company's past financial performance
and potential future results. Non-GAAP measures should not be
considered in isolation or as a substitute for comparable GAAP
accounting and investors should read them in conjunction with the
company's financial statements prepared in accordance with GAAP. The
non-GAAP measures of net revenue and net loss we use may be different
from, and not directly comparable to, similarly titled measures used
by other companies.  
"Safe Harbor" Statement under the Private Securities Litigation
Reform Act of 1995  
Statements made in this news release, other than statements of
historical fact, are forward-looking statements. Forward-looking
statements are subject to a number of 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 in this news release include but are not limited to
revenue guidance for 2013, quotes from management and statements
regarding increased revenue expectations as the Affordable Care Act
enables patients to obtain health insurance, the timing of an interim
analysis of data and reported results from our phase 3 trial of
mifepristone for the treatment of psychotic depression, the timing of
feedback and questions from the EMA, and the timing of reported
findings from the University of Chicago regarding the study in humans
of mifepristone in combination with chemotherapy in the treatment of
metastatic triple-negative breast cancer. The company's actual
results may differ materially from those anticipated in these
forward-looking statements. Factors that may contribute to such
differences include, among others, the pace of Korlym's acceptance by
physicians and patients, the pace of enrollment in or the outcome of
the company's phase 3 trial of mifepristone for the treatment of
psychotic depression, the protections afforded by Korlym's Orphan
Drug Designation, by Corcept's patent portfolio, or by the company's
other intellectual property rights, the effects of rapid
technological change and competition, or the cost, pace and success
of Corcept's product development efforts, including its ability to
advance its next-generation selective GR-II antagonists towards human
use. These and other risks are set forth in the company's SEC
filings, all of which are available from the company's website
(http://www.corcept.com) or from the SEC's website
(http://www.sec.gov). Corcept disclaims any intention or duty to
update any forward-looking statement made in this news release,
except as may be required by law. 


 
                                                                            
                                                                            
                      CORCEPT THERAPEUTICS INCORPORATED                     
                          CONDENSED BALANCE SHEETS                          
                               (in thousands)                               
                                                                            
                                                 September 30,  December 31,
                                                      2013          2012    
                                                 ------------- -------------
                                                  (Unaudited)      (Note)   
                                                                            
ASSETS:                                                                     
  Cash and cash equivalents                      $      63,175 $      93,032
  Trade receivables, net                                 1,019           557
  Inventory                                              5,555         4,663
  Other assets                                           1,308           914
                                                 ------------- -------------
    Total assets                                 $      71,057 $      99,166
                                                 ------------- -------------
                                                                            
LIABILITIES AND STOCKHOLDERS' EQUI
TY:                                       
  Accounts payable                               $       2,337 $       3,804
  Deferred revenue                                          55            16
  Long-term obligation                                  34,642        31,680
  Other liabilities                                      3,250         1,889
  Stockholders' equity                                  30,773        61,777
                                                 ------------- -------------
    Total liabilities and stockholders' equity   $      71,057 $      99,166
                                                 ------------- -------------
        Note: Derived from audited financial statements at that date.       
                                                                            
                                                                            
                                                                            
                                                                            
                     CORCEPT THERAPEUTICS INCORPORATED                      
                     CONDENSED STATEMENTS OF OPERATIONS                     
                  (in thousands, except per share amounts)                  
                                                                            
                                (Unaudited)                                 
                                                                            
                                     Three Months Ended   Nine Months Ended 
                                        September 30,       September 30,   
                                     ------------------  ------------------ 
                                                                            
                                       2013      2012      2013      2012   
                                     --------  --------  --------  -------- 
                                                                            
Revenues:                                                                   
  Product sales, net                 $  2,634  $  1,055  $  6,242  $  1,930 
                                                                            
Operating expenses:                                                         
  Cost of sales                            40        24        82        72 
  Research and development              5,155     3,008    13,903     9,218 
  Selling, general and                                                      
   administrative                       7,179     5,694    23,723    18,932 
                                     --------  --------  --------  -------- 
    Total operating expenses           12,374     8,726    37,708    28,222 
                                     --------  --------  --------  -------- 
Loss from operations                   (9,740)   (7,671)  (31,466)  (26,292)
                                                                            
Interest and other expense             (1,166)     (622)   (3,421)     (632)
                                     --------  --------  --------  -------- 
    Net loss and comprehensive loss  $(10,906) $ (8,293) $(34,887) $(26,924)
                                     --------  --------  --------  -------- 
                                                                            
Basic and diluted net loss per share $  (0.11) $  (0.08) $  (0.35) $  (0.30)
                                     --------  --------  --------  -------- 
                                                                            
Shares used in computing basic and                                          
 diluted net loss per share            99,814    99,082    99,814    90,738 
                                     --------  --------  --------  -------- 
                                                                            
                                                                            
                                                                            
                                                                            
                     CORCEPT THERAPEUTICS INCORPORATED                      
                RECONCILIATION OF GAAP TO NON-GAAP NET LOSS                 
                  (in thousands, except per share amounts)                  
                                                                            
                                (Unaudited)                                 
                                                                            
                                     Three Months Ended   Nine Months Ended 
                                        September 30,       September 30,   
                                     ------------------  ------------------ 
                                                                            
                                       2013      2012      2013      2012   
                                     --------  --------  --------  -------- 
                                                                            
GAAP net loss                        $(10,906) $ (8,293) $(34,887) $(26,924)
                                                                            
Significant non-cash expenses:                                              
  Stock-based compensation                                                  
    Research and development              161       160       466       416 
    Selling, general and                                                    
     administrative                     1,148       833     3,417     3,848 
                                     --------  --------  --------  -------- 
      Total stock-based compensation    1,309       993     3,883     4,264 
                                     --------  --------  --------  -------- 
  Accretion of interest expense                                             
   related to long-term obligation      1,133       575     3,340       575 
                                     --------  --------  --------  -------- 
Non-GAAP net loss                    $ (8,464) $ (6,725) $(27,664) $(22,085)
                                     --------  --------  --------  -------- 
                                                                            
                                                                            
GAAP basic and diluted net loss per                                         
 share                               $  (0.11) $  (0.08) $  (0.35) $  (0.30)
                                     --------  --------  --------  -------- 
                                                                            
Non-GAAP basic and diluted net loss                                         
 per share as adjusted for                                                  
 significant non-cash expenses       $  (0.08) $  (0.07) $  (0.28) $  (0.24)
                          
           --------  --------  --------  -------- 
                                                                            
Shares used in computing basic and                                          
 diluted net loss per share            99,814    99,082    99,814    90,738 
                                     --------  --------  --------  -------- 

  
CONTACT:
Charles Robb
Chief Financial Officer
Corcept Therapeutics
650-688-8783
crobb@corcept.com
www.corcept.com 
 
 
Press spacebar to pause and continue. Press esc to stop.