November 13, 2008
Corcept Therapeutics Announces Third Quarter 2008 Results
Corcept Therapeutics Incorporated (NASDAQ: CORT) today reported financial results for the third quarter ended September 30, 2008.
For the third quarter of 2008, Corcept reported a net loss of $5.6 million, or $0.11 per share, compared to a net loss of $3.4 million, or $0.09 per share, for the third quarter of 2007. For the first nine months of 2008, the company reported a net loss of $13.9 million, or $0.30 per share, compared to a net loss of $7.4 million, or $0.23 per share, for the same period in 2007.On September 3, 2008, we announced that Eli Lilly and Company (Lilly) has agreed to fund studies to test the effectiveness of Corcept's selective GR-II receptor antagonist, CORT 108297, in rat models of olanzapine induced weight gain.
Corcept has developed an extensive intellectual property portfolio that covers the use of GR-II antagonists in the treatment of a wide variety of psychiatric and metabolic disorders, including the prevention of weight gain caused by the use of antipsychotic medication. The Company has also discovered and filed patents for three different series of compounds which block cortisol's activity at the GR-II (cortisol) receptor but do not block the progesterone receptor. In May 2008, the Company reported that CORT 108297, a potential lead compound from one of these series, produced encouraging results in a human microdosing study. The compound was extremely well absorbed, demonstrated good bioavailability and had a half-life that appears compatible with once-a-day oral dosing.
CORLUX, our lead product candidate, now in Phase 3 studies for the treatment of psychotic depression and Cushing's Syndrome, is a potent blocker of both the GR-II (cortisol) receptor and the PR (progesterone) receptor. In 2005, we published the results of studies in rats that demonstrated that CORLUX both reduced the weight gain associated with the ongoing use of olanzapine and mitigated the weight gain associated with the initiation of treatment with olanzapine. In August of 2007, we announced that the positive results of a clinical trial in healthy men indicated that CORLUX mitigated the weight gain associated with the initiation of treatment with olanzapine. Lilly supplied olanzapine and provided the funds for this human proof of concept study. While we do not intend to develop CORLUX as a commercial product for the mitigation of antipsychotic-induced weight gain, it is an excellent clinical probe to demonstrate the effectiveness of GR-II antagonism in this indication.
"Weight gain and alterations in metabolic efficiency have been observed for many years in patients with high circulating cortisol," said Joseph K. Belanoff, M.D., Chief Executive Officer of Corcept Therapeutics. "While it is not fully understood why the group of medications known as atypical antipsychotic medications, including olanzapine (Zyprexa), risperidone (Risperdal), quetiapine (Seroquel) and clozapine (Clozaril), are associated with varying degrees of treatment emergent weight gain, hyperglycemia and diabetes mellitus, it is possible that a cortisol receptor antagonist may eventually prove to be useful in patients who need to take these medications. We believe that significant opportunities may exist for us to develop proprietary products in this area. Lilly has been vigilant in examining the metabolic changes associated with olanzapine; we are very pleased to continue our work with them and are appreciative of their support."
In regard to the Company's clinical program, Dr. Robert L. Roe, the company's President, commented, "We began enrolling patients in our Phase 3 trial of CORLUX for the psychotic features of psychotic depression during the second quarter and anticipate that we will have a sufficient number of patients enrolled by late 2009 to enable the data safety monitoring board, independent of the Company, to perform an interim analysis evaluating safety and top-line efficacy results from the first half of the study. We have also initiated sites and are enrolling patients into our Phase 3 pivotal study of CORLUX for the treatment of endogenous Cushing's Syndrome. Because only an estimated 10 to 15 of every one million people are newly diagnosed each year with Cushing's Syndrome, identification and enrollment of the 50 patients for the study is anticipated to be an extended process."
As of September 30, 2008, Corcept had cash, cash equivalents and marketable securities of $22.8 million. The total cash used in the company's operating activities for the first nine months of 2008 was $13.9 million.
Total operating expenses increased to $5.0 million for the third quarter of 2008 and $13.7 million for the first nine months of 2008, from $3.6 million and $8.3 million, respectively, for the same periods in 2007. In the third quarter and first nine months of 2008, research and development expenses increased to $3.3 million and $9.4 million, respectively, from $2.4 million and $5.2 million, respectively, in the same periods of 2007. This increase in research and development expenses was due primarily to the costs associated with commencement of new Phase 3 trials for the treatment of the psychotic features of psychotic depression and Cushing's Syndrome and manufacturing development and the research program related to the study of new selective GR-II antagonists.
General and administrative expenses increased to $1.7 million for the third quarter and $4.3 million for the first nine months of 2008, from $1.2 million and $3.1 million, respectively, for the same periods in 2007, primarily attributable to increases in stock-based compensation expense and cash compensation. The figures for the first nine months of 2007 included a reversal of stock compensation expense of approximately $393,000 related to the resignation of an administrative employee.
Other non-operating expense for the third quarter of 2008 includes a charge of approximately $944,000 for liquidated damages in regard to registration rights granted to investors in the Company's private investment transaction in March 2008. The registration statement covering the securities sold in this transaction was declared effective by the Securities and Exchange Commission on November 10, 2008. On November 11, 2008, the Company's board of directors and the Investors in this transaction agreed that the liquidated damages arising out of this transaction will be paid in the form of shares of the Company's common stock instead of cash.
Commenting on Corcept's financial guidance for 2008, Anne LeDoux, Corcept's Vice President and Controller, stated, "Based on the currently planned timeline of our clinical development program, we expect that cash used in operations in 2008 will be between $17 million and $19 million."
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 Cushing's Syndrome
Cushing's Syndrome is caused by prolonged exposure of the body's tissues to high levels of the hormone cortisol. Cushing's Syndrome is relatively rare and most commonly affects adults aged 20 to 50. An estimated 10 to 15 of every one million people are newly diagnosed with this syndrome each year. Symptoms vary, but most people have one or more of the following manifestations: high blood sugar, 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 common. Cushing's Syndrome can affect every organ system in the body and can be lethal if not treated effectively.
About Weight Gain associated with Antipsychotic Medications
The group of medications known as atypical antipsychotics, including olanzapine, risperidone, clozapine and quetiapine, are widely used to treat schizophrenia and bipolar disorder. All medications in this group are associated with treatment emergent weight gain of varying degrees and carry a warning label relating to treatment emergent hyperglycemia and diabetes mellitus. Weight gain and alterations in metabolic efficiency have been observed for many years in patients with abnormally high circulating cortisol.
About CORT 108297
CORT 108297 is a non-steroidal, potent, competitive antagonist at the GR-II (cortisol) receptor. In in vitro binding affinity and functional assays it does not have affinity for the PR (progesterone), ER (estrogen), AR (androgen) or GR-I (mineralocorticoid) receptors.
About Corcept Therapeutics Incorporated
Corcept Therapeutics Incorporated is a pharmaceutical company engaged in the development of GR-II antagonist drugs for the treatment of severe psychiatric and metabolic diseases. Corcept's lead product, CORLUX, is currently in Phase 3 clinical trials for the treatment of the psychotic features of psychotic depression and Cushing's Syndrome. The Company is also engaged in preparation for clinical trials to evaluate CORLUX for the mitigation of weight gain induced by antipsychotic medications and continued development work on its proprietary, selective GR-II antagonists. For additional information about the company, please visit www.corcept.com.
Statements made in this news release, other than statements of historical fact, are forward-looking statements, including, for example, statements relating to Corcept's clinical development and research programs, and its spending plans as well as the amount of funds that may be raised under the Company's Committed Equity Financing Facility with Kingsbridge and from other sources. 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. For example, there can be no assurances with respect to the pace of enrollment, cost, rate of spending, completion or success of clinical trials; financial projections may not be accurate; there can be no assurances that Corcept will pursue further activities with respect to the development of CORLUX, CORT 108297, or any of its other selective GR-II antagonists. These and other risk factors are set forth in the Company's SEC filings, all of which are available from our website (www.corcept.com) or from the SEC's website (www.sec.gov). We disclaim any intention or duty to update any forward-looking statement made in this news release.
CORCEPT THERAPEUTICS INCORPORATED CONDENSED BALANCE SHEETS (in thousands) September 30, December 31, 2008 2007 -------------- -------------- (Unaudited) (Note) ASSETS: Current assets: Cash, cash equivalents and short-term investments $ 22,824 $ 17,366 Other current assets 1,690 290 -------------- -------------- Total current assets 24,514 17,656 Other assets 185 88 -------------- -------------- Total assets $ 24,699 $ 17,744 ============== ============== LIABILITIES AND STOCKHOLDERS' EQUITY: Current liabilities: Accounts payable $ 1,003 $ 1,115 Other current liabilities 2,283 1,879 -------------- -------------- Total current liabilities 3,286 2,994 Capital lease obligation, long-term portion 9 16 Total stockholders' equity 21,404 14,734 -------------- -------------- Total liabilities and stockholders' equity $ 24,699 $ 17,744 ============== ============== Note: Derived from audited financial statements at that date. CORCEPT THERAPEUTICS INCORPORATED STATEMENTS OF OPERATIONS (in thousands, except per share amounts) (Unaudited) For the Three For the Nine Months Ended Months Ended September 30, September 30, -------------------- -------------------- 2008 2007 2008 2007 Collaboration revenue $ 66 $ -- $ 66 $ 482 --------- --------- --------- --------- Operating expenses: Research and development* 3,300 2,426 9,426 5,188 General and administrative* 1,668 1,192 4,312 3,120 --------- --------- --------- --------- Total operating expenses 4,968 3,618 13,738 8,308 --------- --------- --------- --------- Loss from operations (4,902) (3,618) (13,672) (7,826) --------- --------- --------- --------- Interest and other income, net 291 191 747 453 Other expense (954) (1) (965) (7) --------- --------- --------- --------- Net loss $ (5,565) $ (3,428) $ (13,890) $ (7,380) ========= ========= ========= ========= Basic and diluted net loss per share $ (0.11) $ (0.09) $ (0.30) $ (0.23) ========= ========= ========= ========= Shares used in computing basic and diluted net loss per share 48,754 36,608 45,831 32,466 ========= ========= ========= ========= *Includes non-cash stock-based compensation of the following: Research and development $ 70 $ 64 $ 202 $ 149 General and administrative 328 299 1,022 411 --------- --------- --------- --------- Total non-cash stock-based compensation $ 398 $ 363 $ 1,224 $ 560 ========= ========= ========= =========
CONTACT: Joseph Belanoff Chief Executive Officer Corcept Therapeutics 650-327-3270 Email Contactwww.corcept.com
SOURCE: Corcept Therapeutics