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What changed in CORCEPT THERAPEUTICS INC's 10-K — 2022 vs 2023

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Paragraph-level year-over-year comparison of CORCEPT THERAPEUTICS INC's 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+268 added−277 removedSource: 10-K (2024-02-15) vs 10-K (2023-02-28)

Top changes in CORCEPT THERAPEUTICS INC's 2023 10-K

268 paragraphs added · 277 removed · 213 edited across 6 sections

Item 1. Business

Business — how the company describes what it does

66 edited+15 added−14 removed105 unchanged
Biggest changeWe believe successful development of this assay will enable physicians to identify new patients with hypercortisolism more easily and to better treat those already in their care. Oncology There is substantial evidence that cortisol activity at the GR reduces the efficacy of certain anti-cancer therapies and that modulating cortisol’s activity may help anti-cancer treatments achieve their intended effect.
Biggest changeOncology There is substantial evidence that cortisol activity at the GR reduces the efficacy of certain anti-cancer therapies and that modulating cortisol’s activity may help anti-cancer treatments achieve their intended effect. In some cancers, cortisol retards cellular apoptosis – the tumor-killing effect many treatments are meant to stimulate. In other cancers, cortisol activity promotes tumor growth.
Patients who received relacorilant intermittently also had a longer median duration of response (“DoR”) (5.6 months versus 3.7 months, hazard ratio: 0.36; p-value: 0.006) compared to those who received nab-paclitaxel alone. Patients who received relacorilant intermittently also lived longer (median OS: 13.9 months versus 12.2 months, hazard ratio: 0.67; p-value: 0.066) compared to those who received nab-paclitaxel alone.
Patients who received relacorilant intermittently also had a longer median duration of response (“DoR”) (5.6 months versus 3.7 months, hazard ratio: 0.36; p-value: 0.006) compared to those who received nab-paclitaxel alone. Patients who received relacorilant intermittently 3 also lived longer (median OS: 13.9 months versus 12.2 months, hazard ratio: 0.67; p-value: 0.066) compared to those who received nab-paclitaxel alone.
If our operations are found to be in violation of any of such laws or any other governmental regulations that apply to us, we may be subject to penalties, including, without limitation, civil and criminal penalties, damages, fines, the curtailment or restructuring of our operations, exclusion from participation in federal and state healthcare programs and imprisonment, any of which could adversely affect our ability to operate our business and our financial results.
If our operations are found to be in violation of any of such laws or any other governmental regulations that apply to us, we may be subject to penalties, including, without limitation, civil and criminal penalties, damages, fines, the curtailment or restructuring 9 of our operations, exclusion from participation in federal and state healthcare programs and imprisonment, any of which could adversely affect our ability to operate our business and our financial results.
Failure to submit required information may result in significant civil monetary penalties for any payments, transfers of value, or ownership or investment interests that are not timely, accurately and completely reported in an 9 annual submission. Similarly, certain states also mandate the tracking and reporting of gifts, compensation and other remuneration to physicians.
Failure to submit required information may result in significant civil monetary penalties for any payments, transfers of value, or ownership or investment interests that are not timely, accurately and completely reported in an annual submission. Similarly, certain states also mandate the tracking and reporting of gifts, compensation and other remuneration to physicians.
If a product that has orphan drug designation subsequently receives the first FDA approval for a particular active ingredient for the disease for which it has such designation, the product is entitled to orphan product exclusivity, which means 7 that the FDA may not approve any other applications, including a full NDA, to market the same drug for the same indication for seven years, except in limited circumstances.
If a product that has orphan drug designation subsequently receives the first FDA approval for a particular active ingredient for the disease for which it has such designation, the product is entitled to orphan product exclusivity, which means that the FDA may not approve any other applications, including a full NDA, to market the same drug for the same indication for seven years, except in limited circumstances.
Pre-clinical and clinical data also indicate that modulating cortisol activity may improve outcomes in patients with fatty liver disease and non-alcoholic steatohepatitis (“NASH”), which are precursors of liver fibrosis and cirrhosis, and in patients at risk of weight gain caused by 1 antipsychotic medications (referred to as antipsychotic induced weight gain, or “AIWG”).
Pre-clinical and clinical data also indicate that modulating cortisol activity may improve outcomes in patients with fatty liver disease and non-alcoholic steatohepatitis (“NASH”), which are precursors of liver fibrosis and cirrhosis, and in patients at risk of weight gain caused by antipsychotic medications (referred to as antipsychotic induced weight gain, or “AIWG”).
Companies that must comply with the GDPR face increased compliance obligations and risk, including more robust regulatory enforcement of data protection requirements and potential fines for noncompliance of up to €20 million or 4% of the annual global revenues of the noncompliant company, whichever is greater.
Companies that must comply with the GDPR face increased compliance obligations and risk, including more 10 robust regulatory enforcement of data protection requirements and potential fines for noncompliance of up to €20 million or 4% of the annual global revenues of the noncompliant company, whichever is greater.
Before a new drug may be marketed in the United States the FDA generally requires completion of preclinical laboratory and animal testing, performance of adequate and well-controlled human clinical trials to establish the safety and efficacy of the proposed drug’s intended use and approval by the FDA.
Before a new drug may be marketed in the United States, the FDA generally requires completion of preclinical laboratory and animal testing, performance of adequate and well-controlled human clinical trials to establish the safety and efficacy of the proposed drug’s 6 intended use and approval by the FDA.
Study participants were randomized to one of three treatment arms: 60 women received 150 mg of relacorilant 3 intermittently (the day before, the day of and the day after their weekly nab-paclitaxel infusion) and 58 women received a daily relacorilant dose of 100 mg per day in addition to nab-paclitaxel. Sixty women received nab-paclitaxel alone.
Study participants were randomized to one of three treatment arms: 60 women received 150 mg of relacorilant intermittently (the day before, the day of and the day after their weekly nab-paclitaxel infusion) and 58 women received a daily relacorilant dose of 100 mg per day in addition to nab-paclitaxel. Sixty women received nab-paclitaxel alone.
To help us achieve that goal, we fund our own patient support programs and donate money to independent charitable foundations that help patients pay for all aspects of their Cushing’s syndrome care, whether or not that care includes taking Korlym. Relacorilant .
To help us achieve that goal, we fund our own patient support programs and donate money to independent charitable foundations that help patients pay for all aspects of their Cushing’s syndrome care, whether or not that care includes taking Korlym.
These laws include, without 8 limitation, state and federal anti-kickback, fraud and abuse, false claims, and physicians’ sunshine (e.g. transparency) laws and regulations. Foreign governments have comparable regulations, and violating these laws and regulations in any jurisdiction could result in significant criminal, civil, and administrative sanctions.
These laws include, without limitation, state and federal anti-kickback, fraud and abuse, false claims, and physicians’ sunshine (e.g. transparency) laws and regulations. Foreign governments have comparable regulations, and violating these laws and regulations in any jurisdiction could result in significant criminal, civil, and administrative sanctions.
The Anti-Kickback Statute is subject to evolving interpretations, and in the absence of substantive guidance, it is possible for future initiatives or engagements with healthcare professionals to be challenged under this Statute, which could adversely impact our operations.
The Anti-Kickback Statute is subject to evolving interpretations, and in the absence of substantive 8 guidance, it is possible for future initiatives or engagements with healthcare professionals to be challenged under this Statute, which could adversely impact our operations.
Our selective cortisol modulator dazucorilant improved motor performance and reduced neuroinflammation and muscular atrophy in animal models of ALS. Following these compelling results, in October 2022 we initiated a Phase 2 trial of dazucorilant (the “DAZALS” trial) in patients with ALS.
Our selective cortisol modulator dazucorilant improved motor performance and reduced neuroinflammation and muscular atrophy in animal models of ALS. Following these compelling results, we initiated a Phase 2 trial (“DAZALS”) of dazucorilant in patients with ALS in October 2022.
The FDA may also require post-approval studies, referred to as “Phase 4 studies,” to monitor or further explore the effect of approved products, and may limit marketing of the drug based on the results of such studies.
The FDA may also require post-approval studies, referred to as “Phase 4 7 studies,” to monitor or further explore the effect of approved products, and may limit marketing of the drug based on the results of such studies.
For example, HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act, or HITECH, and their implementing regulations, imposes requirements relating to the privacy, security and transmission of protected health information on HIPAA covered entities, which include certain healthcare providers, health plans and healthcare clearinghouses, and their business associates who conduct certain activities for or on their behalf involving protected health information on their behalf.
For example, HIPAA, as amended by the Health Information Technology for Economic and Clinical Health Act (“HITECH”), and their implementing regulations, imposes requirements relating to the privacy, security and transmission of protected health information on HIPAA covered entities, which include certain healthcare providers, health plans and healthcare clearinghouses, and their business associates who conduct certain activities for or on their behalf involving protected health information on their behalf.
Cushing’s disease is a subset of Cushing’s syndrome. In the EU, osilodrostat is also approved as a treatment for Cushing’s syndrome. Korlym also competes with Recorlev ® (levoketoconazole), a chiral form of the commonly-prescribed cortisol synthesis inhibitor ketoconazole, that is sold by Xeris Biopharma Holdings, Inc. (“Xeris”), as a treatment for patients with Cushing’s syndrome.
In the EU, osilodrostat is also approved as a treatment for Cushing’s syndrome. Korlym also competes with Recorlev ® (levoketoconazole), a chiral form of the commonly-prescribed cortisol synthesis inhibitor ketoconazole, that is sold by Xeris Biopharma Holdings, Inc. (“Xeris”), as a treatment for patients with Cushing’s syndrome.
Clinical Trial Agreements We typically conduct our clinical trials with the assistance of clinical research organizations (“CROs”). ICON plc is helping us conduct our GRACE and GRADIENT trials. Syneos Health is helping us conduct our ROSELLA trial. Julius Clinical is helping us conduct our DAZALS trial.
Clinical Trial Agreements We typically conduct our clinical trials with the assistance of clinical research organizations (“CROs”). ICON plc is helping us conduct our GRACE and GRADIENT trials. Syneos Health is helping us conduct our ROSELLA trial. Julius Clinical is helping us conduct our DAZALS trial. Medpace Research is helping us conduct our MONARCH trial.
(“Teva”) in federal district court to prevent them from marketing generic versions of Korlym in violation of our patents. In addition, Teva challenged the validity of one of our patents in a post grant review (“PGR”) proceeding before the Patent Trial and Appeal Board (“PTAB”).
(“Teva”) in federal district court to prevent them from marketing generic versions of Korlym in violation of our patents. In response, Teva separately challenged the validity of one of our patents in a post grant review (“PGR”) proceeding before the Patent Trial and Appeal Board (“PTAB”).
As of December 31, 2022, we had 299 employees. We consider our employee relations to be good. Our employees are not covered by a collective bargaining agreement. We seek to hire, retain and motivate smart, ethical, hard-working employees, officers and directors. To achieve this goal, we offer a collegial work environment where creativity, collaboration and initiative are encouraged.
As of December 31, 2023, we had 352 employees. We consider our employee relations to be good. Our employees are not covered by a collective bargaining agreement. We seek to hire, retain and motivate smart, ethical, hard-working employees, officers and directors. To achieve this goal, we offer a collegial work environment where creativity, collaboration and initiative are encouraged.
It also created a new California data protection agency authorized to issue substantive regulations and could result in increased privacy and information security enforcement. The CPRA is in full effect as of January 1, 2023, and similar laws passed in Virginia, Colorado, Connecticut, and Utah will take effect starting in 2023.
It also created a new California data protection agency authorized to issue substantive regulations and could result in increased privacy and information security enforcement. The CPRA is in full effect as of January 1, 2023, and similar laws passed in Virginia, Colorado, Connecticut, and Utah took effect in 2023.
ITEM 1. BUSINESS Overview We are a commercial-stage company engaged in the discovery and development of medications to treat severe endocrine, oncologic, metabolic and neurological disorders by modulating the effects of the hormone cortisol. Cortisol plays a significant role in the body’s response to stress and is essential for survival.
ITEM 1. BUSINESS Overview We are a commercial-stage company engaged in the discovery and development of medications to treat severe endocrinologic, oncologic, metabolic and neurologic disorders by modulating the effects of the hormone cortisol. Cortisol plays a significant role in the body’s response to stress and is essential for survival.
The primary endpoint is PFS, with overall survival as a key secondary endpoint. Patients in ROSELLA will have received prior bevacizumab therapy, which is the standard of care in the United States for patients with platinum-resistant ovarian cancer.
The primary endpoint is PFS; overall survival is a key secondary endpoint. Patients in ROSELLA will have received prior bevacizumab therapy, which is the standard of care for patients with platinum-resistant ovarian cancer.
If successful, we expect GRACE to provide the basis for a new drug application (“NDA”) for relacorilant as a treatment for patients with any etiology of endogenous Cushing’s syndrome. Our second Phase 3 trial of relacorilant, GRADIENT, is studying patients whose Cushing’s syndrome is caused by a benign adrenal tumor.
If successful, GRACE will provide the basis for a new drug application (“NDA”) for relacorilant as a treatment for patients with any etiology of endogenous Cushing’s syndrome. Our second Phase 3 trial of relacorilant, GRADIENT, is studying patients whose Cushing’s syndrome is caused by a benign adrenal tumor.
Relacorilant shares Korlym’s affinity for GR, but, unlike Korlym, has no affinity for PR, and so is not the “abortion pill” and does not cause other effects associated with PR affinity, including endometrial thickening and vaginal bleeding.
Relacorilant shares Korlym’s affinity for the GR, but, unlike Korlym, has no affinity for the PR, and so is not the “abortion pill.” It does not cause other effects associated with PR affinity, including endometrial thickening and vaginal bleeding.
Combining a cortisol modulator with an androgen modulator may block this escape route. Our collaborators at the University of Chicago plan to initiate a randomized, placebo-controlled Phase 2 trial of relacorilant plus enzalutamide in patients with prostate cancer, pre-prostatectomy.
Combining a cortisol modulator with an androgen modulator may block this escape route. Our collaborators at the University of Chicago have initiated a randomized, placebo-controlled Phase 2 trial of relacorilant plus enzalutamide in patients with prostate cancer, pre-prostatectomy.
NASH is an advanced form of nonalcoholic fatty liver disease that afflicts millions of patients and is a leading cause of liver-related mortality.
Nonalcoholic steatohepatitis (“NASH”) is an advanced form of nonalcoholic fatty liver disease that afflicts millions of patients and is a leading cause of liver-related mortality.
The composition of our selective cortisol modulators and their methods of use in a wide range of indications are covered by U.S. and foreign patents. Our lead compounds have entered the clinic as potential treatments for a variety of serious disorders – Cushing’s syndrome, advanced ovarian cancer, adrenal cancer with cortisol excess, prostate cancer, ALS and NASH.
The composition of our selective cortisol modulators and their methods of use in a wide range of indications are covered by U.S. and foreign patents. Our lead compounds are being evaluated in clinical trials as potential treatments for a variety of serious disorders – Cushing’s syndrome, advanced ovarian cancer, adrenal cancer with cortisol excess, prostate cancer, ALS and NASH.
We are conducting two Phase 3 trials (named GRACE and GRADIENT) of our proprietary, selective cortisol modulator, relacorilant, as a treatment for patients with Cushing’s syndrome. Relacorilant was well-tolerated in its Phase 1 and Phase 2 trials.
We are conducting two Phase 3 trials (“GRACE” and “GRADIENT”) of our proprietary, selective cortisol modulator, relacorilant, as a treatment for patients with Cushing’s syndrome. Relacorilant was well-tolerated in its Phase 1 and Phase 2 trials.
In addition to the United States and foreign patents we own or have licensed relating to Cushing’s syndrome and various cancers, we also own U.S. and foreign patents for the use of cortisol modulators to treat AIWG, fatty liver disease, delirium, catatonia, psychosis induced by interferon-alpha therapy, migraine headaches, gastroesophageal reflux disease, neurological damage in premature infants and in the treatment of diseases using combination steroid and GR antagonist therapy.
In addition to the United States and foreign patents we own or have licensed relating to Cushing’s syndrome and various cancers, we also own U.S. and foreign patents for the use of cortisol modulators to treat ALS, AIWG, fatty liver disease, delirium, catatonia, psychosis induced by interferon-alpha therapy, migraine headaches, gastroesophageal reflux disease, neurological damage in premature infants, for the improvement of therapeutic response to electroconvulsive therapy, and in the treatment of diseases using combined steroid and GR modulator therapy.
Pre-clinical data also suggest that modulating cortisol activity may lead to treatments for patients with amyotrophic lateral sclerosis (“ALS”). Since 2012, we have marketed Korlym (mifepristone) in the United States for the treatment of patients suffering from Cushing’s syndrome.
Pre-clinical data also suggest that modulating cortisol activity may lead to treatments for patients with amyotrophic lateral sclerosis (“ALS”). 1 Since 2012, we have marketed Korlym ® in the United States for the treatment of patients suffering from hypercortisolism (“Cushing’s syndrome”).
Women with a history of tumors that do not respond to initial platinum-based treatments (i.e., women with “primary platinum-refractory” disease) and those who have received more than three prior lines of therapy will be excluded.
Women with a history of tumors that do not respond to initial platinum-based treatments (i.e., women with “primary platinum-refractory” disease) and those who have received more than three prior lines of therapy will be excluded. Relacorilant in Patients with Adrenal Cancer with Cortisol Excess .
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. The preferred treatment is surgery, which, if successful, can cure the disease. In approximately half of patients, surgery is not successful because the tumor cannot be located or removed completely.
Cushing’s syndrome can affect every organ system in the body and can be lethal if not treated. The preferred treatment is surgery, which, if successful, can cure the disease. In approximately half of patients, surgery is not successful because the tumor cannot be located or removed completely.
See “Business – License Agreements.” We hold U.S. and international patents covering relacorilant’s composition of matter, as well as U.S. patents covering its use to treat patients with ovarian and pancreatic cancer.
See “Business – License Agreements” for additional information. We hold U.S. and international patents covering relacorilant’s composition of matter, as well as U.S. patents covering its use to treat patients with ovarian and pancreatic cancer.
Research and Development Spending We incurred $131.0 million, $113.9 million and $114.8 million of research and development expense in the years ended December 31, 2022, 2021 and 2020, respectively, which accounted for 45 percent, 47 percent and 51 percent, respectively, of our total operating expenses in those years.
Research and Development Spending We incurred $184.4 million, $131.0 million and $113.9 million of research and development expense in the years ended December 31, 2023, 2022 and 2021, respectively, which accounted for 49 percent, 45 percent and 47 percent, respectively, of our total operating expenses in those years.
Patients who exhibit pre-specified improvements in hypertension and/or glucose metabolism enter a 12-week, double-blind, “randomized withdrawal” phase, in which half of the patients continue receiving relacorilant and half receive placebo.
In the GRACE trial, each patient receives relacorilant for 22 weeks. Patients who exhibit pre-specified improvements in hypertension and/or glucose metabolism enter a 12-week, double-blind, “randomized withdrawal” phase, in which half of the patients continue receiving relacorilant and half receive placebo.
The planned enrollment for this study is 130 patients. Many of the clinical sites in GRACE are participating in GRADIENT. The United States Food and Drug Administration (“FDA”) and the European Commission (“EC”) have designated relacorilant as an orphan drug for the treatment of Cushing’s syndrome.
The planned enrollment for this study is 130 patients. The United States Food and Drug Administration (“FDA”) and the European Commission (“EC”) have designated relacorilant as an orphan drug for the treatment of Cushing’s syndrome.
Cushing’s syndrome is the clinical manifestation of hypercortisolism. An estimated 10 to 15 of every one million people are diagnosed with Cushing’s syndrome each year, resulting in approximately 3,000 new patients per year and a patient population in the United States of about 20,000, approximately half of whom are cured by surgery.
An estimated 10 to 15 of every one million people are diagnosed with Cushing’s syndrome each year, resulting in approximately 3,000 new patients per year and a patient population in the United States of about 20,000, approximately half of whom are cured by surgery. Cushing’s syndrome most often affects adults between the ages of 20 and 50.
In April 2021, we suspended our Phase 2a trial of our selective cortisol modulator miricorilant as a potential treatment for NASH after four of the five patients who received miricorilant exhibited both elevated liver enzymes and large rapid reductions in liver fat. Liver enzyme levels in all affected patients returned to baseline or below baseline after miricorilant was withdrawn.
In April 2021, we suspended our Phase 2a trial of our selective cortisol modulator miricorilant as a potential treatment for NASH after four of the five patients who received miricorilant exhibited both elevated liver enzymes and large rapid reductions in liver fat.
Korlym also competes with Signifor ® (pasireotide) Injection and Isturisa ® (osilodrostat). Both of these drugs are approved by the FDA for the treatment of adult patients with Cushing’s disease who are not candidates for pituitary surgery or for whom surgery did not work, and both are sold by the Italian pharmaceutical company Recordati S.p.A (“Recordati”).
Both of these drugs are approved by the FDA for the treatment of adult patients with Cushing’s disease who are not candidates for pituitary surgery or for whom surgery did not work, and both are sold by the Italian pharmaceutical company Recordati S.p.A (“Recordati”). Cushing’s disease is a subset of Cushing’s syndrome.
Government Regulation Prescription pharmaceutical products are subject to extensive pre- and post-approval regulation governing the research, development, testing, manufacturing, safety, efficacy, labeling, storage, record keeping, and advertising and promotion of the products under the Federal Food, Drug and Cosmetic Act.
The expiration dates of these patents and their foreign counterparts range from 2025 to 2039. Government Regulation Prescription pharmaceutical products are subject to extensive pre- and post-approval regulation governing the research, development, testing, manufacturing, safety, efficacy, labeling, storage, record keeping, and advertising and promotion of the products under the Federal Food, Drug and Cosmetic Act.
The trial’s primary endpoint is the rate and degree of relapse of hypertension in patients receiving placebo measured against the rate and degree of relapse of hypertension in those continuing relacorilant. GRACE has a planned enrollment of 130 patients with Cushing’s syndrome at sites in the United States, Canada, Europe and Israel.
The trial’s primary endpoint is the rate and degree of relapse of hypertension in patients receiving placebo measured against the rate and degree of relapse of hypertension in those continuing relacorilant. GRACE has enrolled 152 patients at sites in the United States, Canada, Europe and Israel. Enrollment is now complete.
We also have a field-based force of medical science liaisons. 2 We use one specialty pharmacy and one specialty distributor to distribute Korlym and provide logistical support to physicians and patients. Our policy is that no patient with Cushing’s syndrome will be denied access to Korlym for financial reasons.
We use one specialty pharmacy and one specialty distributor to distribute Korlym and provide logistical support to physicians and patients. Our policy is that no patient with Cushing’s syndrome will be denied access to Korlym for financial reasons.
As a result, additional compliance investment and potential business process changes may be required. In the event that we are subject to or affected by HIPAA, the CCPA, the CPRA or other domestic privacy and data protection laws, any liability from failure to comply with the requirements of these laws could adversely affect our financial condition.
In the event that we are subject to or affected by HIPAA, the CCPA, the CPRA or other domestic privacy and data protection laws, any liability from failure to comply with the requirements of these laws could adversely affect our financial condition.
Depending on the type of tumor, surgery can result in a range of complications. Korlym . We sell Korlym in the United States, using experienced sales representatives to call on physicians caring for patients with endogenous Cushing’s syndrome (hypercortisolism).
Depending on the type of tumor, surgery can result in a range of complications. Korlym . We sell Korlym in the United States, using experienced sales representatives to call on physicians caring for patients with Cushing’s syndrome (also called “hypercortisolism”). We also have a field-based force of medical science liaisons.
COVID-19 Pandemic Public health restrictions put in place to reduce the impact of the global COVID-19 pandemic, as well as measures voluntarily undertaken by patients, physicians, hospitals and medical clinics, have reduced our revenue growth and make it difficult to grow our Korlym business. The pandemic’s impact on the pace of our clinical development programs has been variable.
COVID-19 Pandemic Public health restrictions and measures voluntarily undertaken by patients, physicians, hospitals and health clinics to reduce the impact of COVID-19 reduced our revenue growth and made it difficult to grow our Korlym business. The pandemic’s impact on our clinical development programs was variable.
The challenge in treating a patient with Cushing’s syndrome is modulating cortisol’s effects without either suppressing them below normal levels or disrupting cortisol’s normal diurnal rhythm. Simply reducing or destroying the ability of the body to make cortisol can cause serious harm.
The challenge in treating a patient with Cushing’s syndrome is modulating cortisol’s effects without either inappropriately suppressing them or disrupting cortisol’s normal diurnal rhythm. Simply reducing or destroying the ability of the body to make cortisol can cause serious harm. Cortisol activity can be modulated effectively by a drug that competes with cortisol, binding to the glucocorticoid receptor (“GR”).
Cushing’s syndrome most often affects adults between the ages of 20 and 50. Most people with Cushing’s syndrome have one or more of the following symptoms: 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.
Most people with Cushing’s syndrome have one or more of the following symptoms: 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.
However, multiple replicated pre-clinical results as well as the results of our double-blind, placebo-controlled trial (published in the Journal of Clinical Psychopharmacology (Hunt et al., 2021)) suggest that miricorilant has the potential to significantly reduce weight gain caused by the administration of olanzapine. Accordingly, we plan to further study miricorilant’s potential to prevent AIWG.
However, numerous replicated pre-clinical study results as well as the results of our double-blind, placebo-controlled trial in healthy subjects (published in the Journal of Clinical Psychopharmacology (Hunt et al., 2021)) suggest that 4 miricorilant may significantly prevent weight gain caused by the administration of olanzapine.
Safety and tolerability of relacorilant plus nab-paclitaxel were comparable to nab-paclitaxel monotherapy. In June 2022, we initiated a pivotal Phase 3 trial (“ROSELLA”) that seeks to replicate the positive results observed in our Phase 2 study. ROSELLA has a planned enrollment of 360 women with recurrent, platinum-resistant ovarian cancer, randomized 1:1 to receive either relacorilant plus nab-paclitaxel or nab-paclitaxel monotherapy.
In June 2022, we initiated a pivotal Phase 3 trial (“ROSELLA”) that seeks to replicate the positive results observed in our Phase 2 study. ROSELLA has a planned enrollment of 360 women with recurrent, platinum-resistant ovarian cancer, half of whom will receive 150 mg of relacorilant intermittently in addition to nab-paclitaxel, with the other half receiving nab-paclitaxel monotherapy.
We have agreements with two third-party manufacturers to produce and bottle Korlym tablets. Competition for Korlym Korlym competes with established treatments, including surgery, radiation and other medications, including “off-label” uses of drugs such as ketoconazole, an anti-fungal medication, and metyrapone, which is approved for testing hypothalamic- 5 pituitary function.
Competition for Korlym Korlym competes with established treatments, including surgery, radiation and other medications, including “off-label” uses of drugs such as ketoconazole, an anti-fungal medication, and metyrapone, which is approved for testing hypothalamic-pituitary function. Korlym also competes with Signifor ® (pasireotide) Injection and Isturisa ® (osilodrostat).
Cortisol activity can be modulated effectively by a drug that competes with cortisol as it attempts to bind to the glucocorticoid receptor (“GR”). Because Korlym’s active ingredient, mifepristone, reduces the binding of excess cortisol to the GR, it can modulate the effects of abnormal levels and release patterns of cortisol without compromising cortisol’s healthy functions and rhythms.
Because Korlym’s active ingredient, mifepristone, reduces the binding of excess cortisol to the GR, it can modulate the effects of abnormal levels and release patterns of cortisol without compromising cortisol’s healthy functions and rhythms.
See “Part I, Item 3, Legal Proceedings.” Intellectual Property Overview. Patents and other proprietary rights are important to our business. We own U.S. composition of matter patents related to our next-generation cortisol modulators. Foreign counterparts of some of these patents have issued in Europe, Japan, China, Canada, Australia and other countries.
Patents and other proprietary rights are important to our business. We own U.S. composition of matter patents related to our next-generation cortisol modulators. Foreign counterparts of some of these patents have been issued in Europe, Japan, China, Canada, Australia and other countries. The expiration dates of these patents and their foreign counterparts range from 2025 to 2041.
Furthermore, we own U.S. compound and method of use patents using our proprietary selective cortisol modulators directed to the treatment of patients with Cushing’s syndrome, with expiration dates ranging from 2033 to 2040. Oncology . We own U.S. patents covering methods of treating cancer using our proprietary selective cortisol modulators with expiration dates ranging from 2023 to 2041.
Furthermore, we own U.S. compound and method of use patents using our proprietary selective cortisol modulators directed to the treatment of patients with Cushing’s syndrome, with expiration dates ranging from 2033 to 2041. We have asserted two patents directed to patients with Cushing’s syndrome in a lawsuit against Teva Pharmaceuticals USA, Inc.
We may terminate our agreements with ICON, Syneos Health and Julius Clinical on 60 days’ written notice.
We may terminate our agreements with ICON, Syneos Health and Julius Clinical on 60 days’ written notice. Our agreement with Medpace may be terminated by us without cause at any time.
The expiration dates of these patents and their foreign counterparts range from 2025 to 2039. We also own U.S. and foreign patents directed to the use of our selective cortisol modulators in the treatment of a variety of serious disorders, including Cushing’s syndrome, various cancers, fatty liver disease, antipsychotic-induced weight gain, and other disorders.
We also own U.S. and foreign patents directed to the use of our selective cortisol modulators in the treatment of a variety of serious disorders, including Cushing’s syndrome, various cancers, fatty liver disease, AIWG, and other disorders. We continue to file patent applications in the United States and abroad.
Some of our trials of indications not considered immediately life-threatening, such as Cushing’s syndrome, have experienced slower enrollment. In addition, some clinical sites have reduced the frequency with which physicians see study participants. Our trials in patients with immediately life-threatening diseases, such as our Phase 2 trial in women with platinum-resistant ovarian cancer, have not encountered delays.
Some of our trials of indications not considered immediately life-threatening, such as Cushing’s syndrome, experienced slower enrollment and difficulty retaining patients. In addition, some clinical sites reduced the frequency with which physicians were able to examine study participants.
Many types of solid tumors express the GR and are potential targets for cortisol modulation therapy, among them ovarian, adrenal and prostate cancer. Relacorilant in Patients with Advanced Ovarian Cancer . In May 2021, we announced preliminary results from our 178-patient, controlled, multi-center, Phase 2 trial of relacorilant combined with nab-paclitaxel in patients with platinum-resistant ovarian cancer.
In May 2021, we announced preliminary results from our 178-patient, controlled, multi-center, Phase 2 trial of relacorilant combined with nab-paclitaxel in patients with platinum-resistant ovarian cancer.
We also own or have exclusively licensed U.S. and European patents covering the use of GR modulators, including relacorilant, to treat a variety of disorders, including CRPC and other solid tumors. Relacorilant has been designated an orphan drug in both the United States and the EU for the treatment of pancreatic cancer. Other Indications .
We also own or have exclusively licensed U.S. and European patents covering the use of GR modulators, including relacorilant, miricorilant, exicorilant, dazucorilant, and other of our proprietary compounds to treat a variety of disorders, including CRPC and other solid tumors.
In Europe, the General Data Protection Regulation (“GDPR”) went into effect in May 2018 and imposes stringent data protection requirements for controllers and processors of personal data of persons within the EU.
Additional legislation proposed at the federal level and in other states, along with increased regulatory action, reflect a trend toward more stringent privacy legislation in the United States. In Europe, the General Data Protection Regulation (“GDPR”) went into effect in May 2018 and imposes stringent data protection requirements for controllers and processors of personal data of persons within the EU.
See “Business – Intellectual Property.” We continue to identify selective cortisol modulators and plan to advance the most promising of them towards the clinic. Studies by Independent Investigators For many years we have advanced our understanding of cortisol modulation by supporting the work of independent academic investigators.
Studies by Independent Investigators For many years we have advanced our understanding of cortisol modulation by supporting the work of independent academic investigators.
Relacorilant also does not appear to cause hypokalemia (low potassium), a potentially serious condition that is a leading cause of patients stopping treatment with Korlym. Forty-four percent of patients in Korlym’s pivotal trial experienced hypokalemia. In the GRACE trial, each patient receives relacorilant for 22 weeks.
There is no evidence that relacorilant causes hypokalemia (low potassium), a potentially serious condition that is a leading cause of patients stopping treatment with Korlym. Forty-four percent of patients in Korlym’s pivotal trial experienced hypokalemia. Unlike all other medications used to treat Cushing's syndrome, relacorilant does not prolong the heart's QT interval, a potentially deadly off-target effect.
In November 2020, the PTAB decided all of Teva’s claims in this PGR in Corcept’s favor. On March 12, 2021, Teva appealed its loss to the Federal Circuit Court of Appeals. On December 7, 2021, the Federal Circuit Court of Appeals affirmed the PTAB’s decision, upholding the validity of all claims in this PGR in Corcept’s favor.
In November 2020, the PTAB rejected Teva’s claims, affirming the validity of our patent in its entirety. Teva 5 appealed to the Federal Circuit Court of Appeals, which affirmed the PTAB’s decision.
Development of our Other Selective Cortisol Modulators Our portfolio of proprietary selective cortisol modulators consists of four structurally distinct series. More than 1,000 of these compounds, including relacorilant, exicorilant, miricorilant and dazucorilant, potently bind to the GR but not the progesterone, estrogen or androgen receptors.
More than 1,000 of these compounds, including relacorilant, exicorilant, miricorilant and dazucorilant, potently bind to the GR but not the progesterone, estrogen or androgen receptors. We hold U.S. and foreign patents covering these compounds and their methods of use in a wide range of indications.
Manufacturing Korlym We rely on contract manufacturers to produce Korlym and our product candidates. In March 2014, we entered into an agreement with Produits Chimiques Auxiliaires et de Synthese SA (“PCAS”) to produce mifepristone, the active pharmaceutical ingredient (“API”) in Korlym.
Manufacturing Korlym We rely on contract manufacturers to produce Korlym and our product candidates. Because we have an agreement with one third-party manufacturer to supply mifepristone, the active pharmaceutical ingredient (“API”) in Korlym, we have purchased and hold significant quantities of API. We have two third-party manufacturers to produce and bottle Korlym tablets.
In the United States, six million people take antipsychotic medications such as olanzapine and risperidone to treat illnesses such as schizophrenia, bipolar disorder and depression. While these drugs are very effective, they often cause rapid and sustained weight gain, other metabolic disturbances and, ultimately, cardiovascular disease.
While these drugs are very effective, they often cause rapid and sustained weight gain, other metabolic disturbances and, ultimately, cardiovascular disease. Patients taking these medications experience a 10 to 25-year reduction in life expectancy, due largely to increased cardiovascular events, such as heart attacks and strokes.
We hold U.S. and foreign patents covering these compounds and their methods of use in a wide range of indications. We have applied, and will continue to apply, for patents covering the composition and method of use of our products and product candidates.
We have applied, and will continue to apply, for patents covering the composition and method of use of our products and product candidates. See “Business – Intellectual Property” for additional information. We continue to identify selective cortisol modulators and plan to advance the most promising of them towards the clinic.
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We expect that pandemic-related impediments to our business will continue so long as there are COVID-19 public health restrictions and/or risk-reducing behavior by physicians and patients. Please see the risk factor under Item 1A of this Annual Report, “The COVID-19 pandemic has adversely affected and is continuing to adversely affect our business.” Cushing’s Syndrome Background.
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Trials in patients with immediately life-threatening diseases, such as our Phase 2 trial in women with platinum-resistant ovarian cancer, did not encounter delays. Although the impact of COVID-19 on our business is now significantly reduced, some physicians and hospitals continue to limit interactions with sales representatives and medical science liaisons, which makes growing our business more difficult. Cushing’s Syndrome Background.
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In neither the United States nor the EU does orphan drug designation shorten the drug approval process, make approval more likely or prevent competitors from marketing other drugs for the treatment of Cushing’s syndrome. FKBP5 Gene Expression Assay .
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We have initiated a Phase 4 study (“CATALYST”), to determine the prevalence of Cushing’s syndrome in patients with difficult-to-control diabetes (HbA1c of 7.5 percent or higher) despite receiving standard treatment. In CATALYST’s first phase, 1,000 patients will be evaluated.
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The tests used to diagnose patients with hypercortisolism and optimize their treatment are imprecise and often fail to identify patients with less severe manifestations of the disease. We have developed an assay to measure expression of the gene FKBP5, which is stimulated by cortisol activity, and have completed analytical validation pursuant to the Clinical Laboratory Improvement Amendments (“CLIA”).
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Those found to have Cushing’s 2 syndrome may elect to enter the second phase of the study, in which patients will be randomized to receive either Korlym or placebo for 24 weeks. We expect that data from CATALYST will help physicians better identify patients with Cushing’s syndrome and determine their optimal treatment. Relacorilant .
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Clinical data indicate that FKBP5 levels are high in patients suffering from hypercortisolism (i.e., excess cortisol activity), but subside when they are successfully treated. We are testing this hypothesis in the GRACE and GRADIENT trials.
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Cortisol also suppresses the body’s immune response; activating – not suppressing – the immune system is beneficial in fighting certain cancers. Many types of solid tumors express the GR and are potential targets for cortisol modulation therapy, among them ovarian, adrenal and prostate cancer. Relacorilant in Patients with Advanced Ovarian Cancer .
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In some cancers, cortisol retards cellular apoptosis – the tumor-killing effect many treatments are meant to stimulate. In other cancers, cortisol activity promotes tumor growth. Cortisol also suppresses the body’s immune response; activating – not suppressing – the immune system is beneficial in fighting certain cancers.
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Safety and tolerability of relacorilant plus nab-paclitaxel were comparable to nab-paclitaxel monotherapy. The final analysis from our Phase 2 trial was published in the Journal of Clinical Oncology (Colombo et al., 2023), the premiere journal of the American Society of Clinical Oncology (ASCO).
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In our Phase 2 trial, women who met the entry criteria for ROSELLA and received relacorilant intermittently experienced significantly improved PFS (median: 7.3 months versus 3.7 months, hazard ratio: 0.40; p-value: 0.005) and OS (median: 17.9 months versus 12.6 months, hazard ratio: 0.38; p-value: 0.011) relative to patients in the comparator arm.
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Liver enzyme levels in all affected patients returned to baseline or below baseline (i.e. to healthier levels) after miricorilant was withdrawn. Our Phase 1b study has identified a dosing regimen that effectively reduced liver fat, improved liver health and key metabolic and lipid measures and was well-tolerated.
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The patients in the intermittent arm also experienced a significant improvement in DoR relative to those in the comparator arm (median: 5.6 months versus 3.1 months, hazard ratio: 0.29; p-value: 0.016). Relacorilant in Patients with Adrenal Cancer with Cortisol Excess .
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Following these compelling results, we initiated a Phase 2b trial (“MONARCH”) of miricorilant in patients with NASH in October 2023. MONARCH has a planned enrollment of 150 patients, randomized 2:1 to receive either 100 mg of miricorilant twice weekly or placebo for 48 weeks.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

71 edited+19 added−26 removed126 unchanged
Biggest changeFactors that may cause the price of our common stock to fluctuate rapidly and widely include: • actual or anticipated variations in our operating results or changes to any public guidance we have provided; • actual or anticipated timing and results of our clinical trials; • changes in the expected or actual timing of our competitors’ development programs; • general market and economic conditions, including the effects of the COVID-19 pandemic; • disputes or other developments relating to our intellectual property, including developments in ANDA litigation; • short-selling of our common stock, the publication of speculative opinions about our business or other market manipulation activities that are intended to lower our stock price or increase its volatility; • changes in estimates or recommendations by securities analysts or the failure of our performance to meet the published expectations of those analysts or public guidance we have provided; • actual or anticipated regulatory approvals of our product candidates or competing products; • purchases or sales of our common stock by our officers, directors or stockholders; • changes in laws or regulations applicable to Korlym, our product candidates or our competitors’ products; • technological innovations by us, our collaborators or our competitors; • conditions in the pharmaceutical industry, including the market valuations of companies similar to ours; • additions or departures of key personnel; • announcements by us or our competitors of significant acquisitions, strategic partnerships, joint ventures, collaborations or capital commitments; and • additional financing activities.
Biggest changeFactors that may cause the price of our common stock to fluctuate rapidly and widely include: • actual or anticipated variations in our operating results or changes to any public guidance we have provided; • actual or anticipated timing and results of our clinical trials; 20 • actual or anticipated regulatory approvals of our product candidates; • disputes or other developments relating to our intellectual property, including developments in Abbreviated New Drug Application litigation; • changes in laws or regulations applicable to the pricing, availability of insurance reimbursement, or approved uses of Korlym, our product candidates or our competitors’ products; • short-selling of our common stock, the publication of speculative opinions about our business or other market manipulation activities that are intended to lower our stock price or increase its volatility; • changes in estimates or recommendations by securities analysts or the failure of our performance to meet the published expectations of those analysts or public guidance we have provided; • purchases of our common stock pursuant to our Stock Repurchase Program or changes to that program; • general market and economic conditions, including the effects of the COVID-19 pandemic; • changes in the expected or actual timing of our competitors’ development programs and the approval of competing products; • purchases or sales of our common stock by our officers, directors or stockholders; • technological innovations by us, our collaborators or our competitors; • conditions in the pharmaceutical industry, including the market valuations of companies similar to ours; • additions or departures of key personnel; • announcements by us or our competitors of significant acquisitions, strategic partnerships, joint ventures, collaborations or capital commitments; and • additional financing activities.
Outside parties may have staffing difficulties, may undergo changes in priorities or may become financially distressed, adversely affecting their willingness or ability to conduct our clinical trials. Problems with the timeliness or quality of the work of a CRO may lead us to seek to terminate the relationship and use an alternative service provider.
Outside parties may have staffing difficulties, may undergo changes in priorities or may become financially distressed, adversely affecting their willingness or ability to conduct our clinical trials. Problems with the timeliness or quality of the work of a CRO may lead us to seek to terminate the relationship and use an alternative service 18 provider.
From January 1, 2021, we have had to comply with the GDPR and separately the United Kingdom GDPR, which, together with the amended United Kingdom Data Protection Act 2018, retains the GDPR in United Kingdom national law, each regime having the ability to fine up to the greater of €20 million/ £17.5 million or 4% of global turnover.
From January 1, 2021, we have had to comply with the GDPR and separately the United Kingdom GDPR, which, together with the amended United Kingdom Data Protection Act 2018, retains the GDPR in United Kingdom national law, each regime having the ability to fine up to the greater of €20 million/ £17.5 million or 4 percent of global turnover.
We are vulnerable to natural disasters, including earthquakes, fires, hurricanes, floods, blizzards and the extended periods of extreme heat, cold and precipitation made more frequent and severe by global warming. For example, our headquarters are in the San Francisco Bay Area, which experiences earthquakes, wildfires and flooding.
We are also vulnerable to natural disasters, including earthquakes, fires, hurricanes, floods, blizzards and the extended periods of extreme heat, cold and precipitation made more frequent and severe by global warming. For example, our headquarters are in the San Francisco Bay Area, which experiences earthquakes, wildfires and flooding.
And, although we structure our applicable business arrangements in accordance with the safe harbors, it is difficult to determine exactly how the law will be applied in specific circumstances. Accordingly, it is possible that certain practices of ours may be challenged under the federal Anti-Kickback Statute.
And, although we structure our applicable business arrangements in accordance with the safe harbors, it is difficult to determine exactly how the law will be applied in specific circumstances. Accordingly, it is possible that certain practices of ours may be challenged under the federal 16 Anti-Kickback Statute.
This significant concentration of share ownership may adversely affect the trading price of our common stock because many investors perceive disadvantages to owning stock in companies with controlling stockholders. We have in the past and may in the future be subject to short selling strategies that may drive down the market price of our common stock.
This significant concentration of share ownership may adversely affect the trading price of our common stock because many investors perceive disadvantages to owning stock in companies with controlling stockholders. 24 We have in the past and may in the future be subject to short selling strategies that may drive down the market price of our common stock.
If government or private payers cease to provide adequate and timely coverage, pricing and reimbursement for Korlym, physicians may not prescribe the medication and patients may not purchase it, even if it is prescribed, or the price we receive may be reduced, which would reduce our revenue.
If government or private 13 payers cease to provide adequate and timely coverage, pricing and reimbursement for Korlym, physicians may not prescribe the medication and patients may not purchase it, even if it is prescribed, or the price we receive may be reduced, which would reduce our revenue.
In the United States, there have been and continue to be legislative initiatives to contain healthcare costs. The Patient Protection and Affordable Care Act (“ACA”) which was passed in 2010, substantially changed the way health care is financed 14 by both governmental and private insurers.
In the United States, there have been and continue to be legislative initiatives to contain healthcare costs. The Patient Protection and Affordable Care Act (“ACA”) which was passed in 2010, substantially changed the way health care is financed by both governmental and private insurers.
These provisions may 25 prevent or delay a change in our Board of Directors or our management, which our Board of Directors appoints. In addition, because we are incorporated in Delaware, we are governed by the provisions of Section 203 of the Delaware General Corporation Law.
These provisions may prevent or delay a change in our Board of Directors or our management, which our Board of Directors appoints. In addition, because we are incorporated in Delaware, we are governed by the provisions of Section 203 of the Delaware General Corporation Law.
All other uses are referred to as “off-label,” manufacturers are prohibited from engaging in any of “off-label” promotion. In the 16 United States, we market Korlym to treat hyperglycemia secondary to hypercortisolism in adult patients with endogenous Cushing’s syndrome who have type 2 diabetes mellitus or glucose intolerance and for whom surgery has failed or is not an option.
All other uses are referred to as “off-label,” manufacturers are prohibited from engaging in any “off-label” promotion. In the United States, we market Korlym to treat hyperglycemia secondary to hypercortisolism in adult patients with endogenous Cushing’s syndrome who have type 2 diabetes mellitus or glucose intolerance and for whom surgery has failed or is not an option.
COVID-19 may continue to increase our cybersecurity risks, due to our reliance on internet technology and the number of our employees that are working remotely, which may create additional opportunities for cybercriminals to exploit vulnerabilities. We and our vendors have experienced data breaches, theft, “phishing” attacks and other unauthorized access to confidential data and information.
We may continue to increase our cybersecurity risks, due to our reliance on internet technology and the number of our employees that are working remotely, which may create additional opportunities for cybercriminals to exploit vulnerabilities. We and our vendors have experienced data breaches, theft, “phishing” attacks and other unauthorized access to confidential data and information.
Failure to observe these precautions could result in significant product liability claims. Our insurance may not fully cover our potential product liabilities. Inability to obtain adequate insurance coverage could inhibit development of our product candidates or result in significant uninsured liability. Defending a lawsuit could be costly and divert management from productive activities.
Failure to observe these precautions could result in significant product liability claims. Our insurance may not fully cover our potential product liabilities. Inability to obtain adequate insurance coverage could delay development of our product candidates or result in significant uninsured liability. Defending a lawsuit could be costly and divert management from productive activities.
Any insurance we maintain against the risk of this type of loss may not be sufficient to cover actual losses or may not apply to the circumstances relating to any particular loss. 24 Changes in federal, state and local tax laws may reduce our net earnings. Our earnings are subject to federal, state and local taxes.
Any insurance we maintain against the risk of this type of loss may not be sufficient to cover actual losses or may not apply to the circumstances relating to any particular loss. 23 Changes in federal, state and local tax laws may reduce our net earnings. Our earnings are subject to federal, state and local taxes.
The GDPR provides that EEA member 23 states may make their own further laws and regulations limiting the processing of health data, which could limit our ability to use and share personal data or could cause our costs to increase and harm our business and financial condition.
The GDPR provides that EEA member states may make their own further laws and regulations limiting the processing of health data, which could limit our ability to 22 use and share personal data or could cause our costs to increase and harm our business and financial condition.
Clinical trials may take longer to complete, cost more than expected and fail for many reasons, including: • failure to show efficacy or acceptable safety; • slow patient enrollment or delayed activation of clinical trial sites due to the COVID-19 pandemic or other factors; • delays obtaining regulatory permission to start a trial, changes to the size or design of a trial or changes in regulatory requirements for a trial already underway; • inability to secure acceptable terms with vendors and an appropriate number of clinical trial sites; • delays or inability to obtain institutional review board (“IRB”) approval at prospective trial sites; • failure of patients or investigators to comply with the clinical trial protocol; • unforeseen safety issues; and • negative findings of inspections of clinical sites or manufacturing operations by us, the FDA or other authorities.
Clinical trials may take longer to complete, cost more than expected and fail for many reasons, including: • failure to show efficacy or acceptable safety; • slow patient enrollment or delayed activation of clinical trial sites; • delays obtaining regulatory permission to start a trial, changes to the size or design of a trial or changes in regulatory requirements for a trial already underway; • inability to secure acceptable terms with vendors and an appropriate number of clinical trial sites; • delays or inability to obtain institutional review board (“IRB”) approval at prospective trial sites; • failure of patients or investigators to comply with the clinical trial protocol; • unforeseen safety issues; and • negative findings of inspections of clinical sites or manufacturing operations by us, the FDA or other authorities.
The Secretary will publish the negotiated price, known as the “Maximum Fair Price”, or MFP, for each of the selected products. Manufacturers of selected drugs would be required to offer the drug for Medicare recipients at the MFP.
The Secretary will publish the negotiated price, known as the “Maximum Fair Price” (“MFP”), for each of the selected products. Manufacturers of selected drugs would be required to offer the drug for Medicare recipients at the MFP.
Risks Related to our Research and Development Activities Our efforts to discover, develop and commercialize our product candidates may not succeed. Clinical drug development is lengthy, expensive and often unsuccessful. Results of early studies and trials are often not predictive of later trial results. Failure can occur at any time. Clinical development is costly, time-consuming and unpredictable.
Risks Related to our Research and Development Activities • Our efforts to discover, develop and commercialize our product candidates may not succeed. Clinical drug development is lengthy, expensive and often unsuccessful. Results of early studies and trials are often not predictive of later trial results. Failure can occur at any time.
We and our partners are subject to federal, state and foreign laws and regulations concerning data privacy and security, including HIPAA and the EU General Data Protection Regulation, or the GDPR. These and other regulatory frameworks are evolving rapidly as new rules are enacted and existing ones updated and made more stringent.
We and our partners are subject to federal, state and foreign laws and regulations concerning data privacy and security, including HIPAA and the EU General Data Protection Regulation (the “GDPR”). These and other regulatory frameworks are evolving rapidly as new rules are enacted and existing ones updated and made more stringent.
Importantly, under the False Claims Act the government may assert that a claim including items or services resulting from a violation of the federal Anti-Kickback Statute constitutes a false or fraudulent claim for purposes of the False Claims Act; • the federal Civil Monetary Penalties law, which prohibits, among other things, offering or transferring remuneration to a federal healthcare beneficiary that a person knows or should know is likely to influence the beneficiary’s decision to order or receive items or services reimbursable by the government from a particular provider or supplier; • HIPAA, which created federal criminal laws that prohibit executing a scheme to defraud any health care benefit program or making false statements relating to health care matters; similar to the federal Anti-Kickback Statute, a person or entity does not need to have actual knowledge of the statute or specific intent to violate it in order to have committed a violation; • federal “sunshine” laws, including the federal Physician Payment Sunshine Act (or sometimes referred to as the Open Payments TM Program), that require transparency regarding financial arrangements with health care providers, such as the reporting and disclosure requirements imposed by the ACA on drug manufacturers regarding any “transfer of value” made or distributed to physicians, certain non-physician practitioners, teaching hospitals, and ownership or investment interests held by physicians and their immediate family members; • federal consumer protection and unfair competition laws, which broadly regulate marketplace activities and activities that potentially harm consumers; and • state law equivalents of each of the above federal laws, such as anti-kickback and false claims laws which may apply to items or services reimbursed by any third-party payer, including commercial insurers; state laws that require pharmaceutical companies to comply with the pharmaceutical industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the federal government or otherwise restrict payments that may be made to healthcare providers; and state laws that require drug manufacturers to report information related to payments and other transfers of value to physicians and other healthcare providers or marketing expenditures and pricing information. 17 The risk of being found in violation of these laws and regulations is increased by the fact that many of them have not been definitively interpreted by regulatory authorities or the courts and their provisions are open to a variety of interpretations.
Importantly, under the False Claims Act the government may assert that a claim including items or services resulting from a violation of the federal Anti-Kickback Statute constitutes a false or fraudulent claim for purposes of the False Claims Act; • the federal Civil Monetary Penalties law, which prohibits, among other things, offering or transferring remuneration to a federal healthcare beneficiary that a person knows or should know is likely to influence the beneficiary’s decision to order or receive items or services reimbursable by the government from a particular provider or supplier; • HIPAA, which created federal criminal laws that prohibit executing a scheme to defraud any health care benefit program or making false statements relating to health care matters; similar to the federal Anti-Kickback Statute, a person or entity does not need to have actual knowledge of the statute or specific intent to violate it in order to have committed a violation; • federal “sunshine” laws, including the federal Physician Payment Sunshine Act (or sometimes referred to as the Open Payments TM Program), that require transparency regarding financial arrangements with health care providers, such as the reporting and disclosure requirements imposed by the ACA on drug manufacturers regarding any “transfer of value” made or distributed to physicians, certain non-physician practitioners, teaching hospitals, and ownership or investment interests held by physicians and their immediate family members; • federal consumer protection and unfair competition laws, which broadly regulate marketplace activities and activities that potentially harm consumers; • state law equivalents of each of the above federal laws, such as anti-kickback and false claims laws which may apply to items or services reimbursed by any third-party payer, including commercial insurers; state laws that require pharmaceutical companies to comply with the pharmaceutical industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the federal government or otherwise restrict payments that may be made to healthcare providers; and • state laws that require drug manufacturers to report information related to payments and other transfers of value to physicians and other healthcare providers or marketing expenditures and pricing information.
Physicians will prescribe Korlym only if they determine that it is preferable to other treatments, even if those treatments are not approved for Cushing’s syndrome. Because Cushing’s syndrome 12 is rare, most physicians are inexperienced diagnosing or caring for patients with the illness and it can be hard to persuade them to identify appropriate patients and treat them with Korlym.
Physicians will prescribe Korlym only if they determine that it is preferable to other treatments, even if those treatments are not approved for Cushing’s syndrome. Most physicians are inexperienced diagnosing or caring for patients with Cushing’s syndrome and it can be hard to persuade them to identify appropriate patients and treat them with Korlym.
If we do not protect our intellectual property, competitors may erode our competitive advantage. Please see “Part I, Item 3, Legal Proceedings.” Our patent applications may not result in issued patents and patents issued to us may be challenged, invalidated, held unenforceable or circumvented. Our patents may not prevent third parties from producing competing products.
If we do not protect our intellectual property, competitors may erode our competitive advantage. Please see “Part I, Item 3, Legal Proceedings” for additional information. Our patent applications may not result in issued patents and patents issued to us may be challenged, invalidated, held unenforceable or circumvented. Our patents may not prevent third parties from producing competing products.
As of February 21, 2023, our officers, directors and principal stockholders beneficially owned approximately 19 percent of our common stock. 21 Our stock price can experience extreme price and volume fluctuations that are unrelated or disproportionate to our operating performance or prospects. Securities class action lawsuits are often instituted against companies following periods of stock market volatility.
As of February 6, 2024, our officers, directors and principal stockholders beneficially owned approximately 20 percent of our common stock. Our stock price can experience extreme price and volume fluctuations that are unrelated or disproportionate to our operating performance or prospects. Securities class action lawsuits are often instituted against companies following periods of stock market volatility.
Risks Related to our Commercial Activities • Failure to generate sufficient revenue from the sale of Korlym would harm our financial results and would likely cause our stock price to decline. • The COVID-19 pandemic has adversely affected and is continuing to adversely affect our business. • If generic versions of Korlym are successfully commercialized, our business, results of operations and financial position would be adversely affected. • New laws, government regulations, or changes to existing laws and regulations could make it difficult or impossible for us to obtain acceptable prices or adequate insurance coverage and reimbursement for Korlym, which would adversely affect our results of operations and financial position.
Risks Related to our Commercial Activities • Failure to generate sufficient revenue from the sale of Korlym would harm our financial results and would likely cause our stock price to decline. 11 • If a generic version of Korlym is successfully commercialized, our business, results of operations and financial position would be adversely affected. • New laws, government regulations, or changes to existing laws and regulations could make it difficult or impossible for us to obtain acceptable prices or adequate insurance coverage and reimbursement for Korlym, which would adversely affect our results of operations and financial position.
In the event any of our vendors fails to perform its contractual obligations to us or is materially impaired in its performance by the COVID-19 pandemic or for any other reason, we may experience disruptions and delays in our supply chain and our ability to deliver Korlym to patients, which would adversely affect our business, results of operations and financial position.
In the event any of our vendors fails to perform its contractual obligations to us or is materially impaired in its performance, we may experience disruptions and delays in our supply chain and our ability to deliver Korlym to patients, which would adversely affect our business, results of operations and financial position.
Risks Related to our Research and Development Activities • Our efforts to discover, develop and commercialize our product candidates may not succeed. Clinical drug development is lengthy, expensive and often unsuccessful. Results of early studies and trials are often not predictive of later trial results.
Risks Related to our Research and Development Activities Our efforts to discover, develop and commercialize our product candidates may not succeed. Clinical drug development is lengthy, expensive and often unsuccessful. Results of early studies and trials are often not predictive of later trial results. Failure can occur at any time.
Please see “Part I, Item 3, Legal Proceedings.” If we are found in violation of any of the laws described above or any other government regulations, we may be subject to civil and criminal penalties, damages, fines, exclusion from governmental health care programs, a corporate integrity agreement or other agreement to resolve allegations of non-compliance, individual imprisonment, and the curtailment or restructuring of our operations, any of which could adversely affect our financial results and ability to operate.
If we are found in violation of any of the laws described above or any other government regulations, we may be subject to civil and criminal penalties, damages, fines, exclusion from governmental health care programs, a corporate integrity 17 agreement or other agreement to resolve allegations of non-compliance, individual imprisonment, and the curtailment or restructuring of our operations, any of which could adversely affect our financial results and ability to operate.
Our ability to physically inspect our vendors and clinical sites has been limited by the COVID-19 pandemic and associated public health restrictions, which increases the risk that failures to meet applicable requirements will go undetected. We may be unable to obtain or maintain regulatory approvals for our product or product candidates, which would prevent us from commercializing our product candidates.
Our ability to physically inspect our vendors and clinical sites was limited by COVID-19 pandemic-related and associated public health restrictions, which increased the risk that failures to meet applicable requirements went undetected. We may be unable to obtain or maintain regulatory approvals for our product or product candidates, which would prevent us from commercializing our product candidates.
The Inflation Reduction Act of 2022, or IRA, introduced some of the most significant changes to Medicare payment for prescription drugs since the ACA. Among its many provisions, the IRA requires the Secretary of the U.S.
The IRA introduced some of the most significant changes to Medicare payment for prescription drugs since the ACA. Among its many provisions, the IRA requires the Secretary of the U.S.
If the FDA, EMA, MHRA or other regulatory authorities withdraw regulatory authorizations of these facilities, we may need to find alternative vendors or facilities, which would be time-consuming, complex and expensive and could significantly hamper our ability to develop, obtain regulatory approval for and market our products.
If the FDA, European Medicines Agency (“EMA”), the Medicines and Healthcare products Regulatory Agency (“MHRA”) or other regulatory authorities withdraw regulatory authorizations of these facilities, we may need to find alternative vendors or facilities, which would be time-consuming, complex and expensive and could significantly hamper our ability to develop, obtain regulatory approval for and market our products.
The availability of competing treatments could limit our revenue from Korlym. Since 2012, a medication owned by the Italian pharmaceutical company Recordati-S.p.A., the somatostatin analogue Signifor ® (pasireotide) Injection, has been marketed in both the United States and the EU for adult patients with Cushing’s disease (a subset of Cushing’s syndrome).
Since 2012, a medication owned by the Italian pharmaceutical company Recordati-S.p.A., the somatostatin analogue Signifor ® (pasireotide) Injection, has been marketed in both the United States and the EU for adult patients with Cushing’s disease (a subset of Cushing’s syndrome).
Our officers, directors and principal stockholders, acting as a group, could significantly influence corporate actions. As of February 21, 2023, our officers and directors beneficially owned approximately 19 percent of our common stock.
Our officers, directors and principal stockholders, acting as a group, could significantly influence corporate actions. As of February 6, 2024, our officers and directors beneficially owned approximately 20 percent of our common stock.
If we elect, or are required by authorities, to delay, suspend or terminate a clinical trial or commercialization efforts, the commercial prospects of the affected product candidates or products may be harmed and our ability to generate product revenues from them may be delayed or eliminated. 20 If one of our product candidates receives marketing approval, and we or others later identify undesirable side effects or adverse events, potentially significant negative consequences could result, including but not limited to: • regulatory authorities may suspend, limit or withdraw approvals of such product; • regulatory authorities may require additional warnings on the label, including “boxed” warnings, or issue safety alerts and other safety information about the product; • we may be required to change the way the product is administered or conduct additional studies or clinical trials; • we may be required to create a Risk Evaluation and Mitigation Strategy, which could include a medication guide outlining the risks of such side effects for distribution to patients, a communication plan for healthcare providers and/or other elements to assure safe use; • the product may become less competitive; • we may be subject to fines, injunctions or the imposition of criminal penalties; and • we could be sued and held liable for harm caused to patients; Any of these events could seriously harm our business.
If one of our product candidates receives marketing approval, and we or others later identify undesirable side effects or adverse events, potentially significant negative consequences could result, including but not limited to: • regulatory authorities may suspend, limit or withdraw approvals of such product; • regulatory authorities may require additional warnings on the label, including “boxed” warnings, or issue safety alerts and other safety information about the product; • we may be required to change the way the product is administered or conduct additional studies or clinical trials; 19 • we may be required to create a Risk Evaluation and Mitigation Strategy, which could include a medication guide outlining the risks of such side effects for distribution to patients, a communication plan for healthcare providers and/or other elements to assure safe use; • the product may become less competitive; • we may be subject to fines, injunctions or the imposition of criminal penalties; and • we could be sued and held liable for harm caused to patients.
If we lose key personnel or are unable to attract more skilled personnel, we may be unable to pursue our product development and commercialization goals. Our ability to operate successfully and manage growth depends upon hiring and retaining skilled managerial, scientific, sales, marketing and financial personnel.
Failure to accomplish any of these tasks could harm our business. 21 If we lose key personnel or are unable to attract more skilled personnel, we may be unable to pursue our product development and commercialization goals. Our ability to operate successfully and manage growth depends upon hiring and retaining skilled managerial, scientific, sales, marketing and financial personnel.
As a result, holders of our common stock may not be able to sell shares quickly or at the current market price. During the 52-week period ended February 21, 2023, our average daily trading volume was approximately 736,105 shares and the intra-day sales prices per share of our common stock on The Nasdaq Stock Market ranged from $17.19 to $30.14.
As a result, holders of our common stock may not be able to sell shares quickly or at the current market price. During the 52-week period ended February 6, 2024, our average daily trading volume was approximately 902,095 shares and the intra-day sales prices per share of our common stock on The Nasdaq Stock Market ranged from $17.86 to $34.28.
We may also experience security breaches that remain undetected for an extended period. Disruptions or security breaches that result in the disclosure of confidential or proprietary information could cause us to incur liability and delay or otherwise harm our research, development and commercialization efforts.
Disruptions or security breaches that result in the disclosure of confidential or proprietary information could cause us to incur liability and delay or otherwise harm our research, development and commercialization efforts.
As a result, additional compliance investment and potential business process changes may be required. In the event that we are subject to or affected by HIPAA, the CCPA, the CPRA or other domestic privacy and data protection laws, any liability from failure to comply with the requirements of these laws could adversely affect our financial condition.
In the event that we are subject to or affected by HIPAA, the CCPA, the CPRA or other domestic privacy and data protection laws, any liability from failure to comply with the requirements of these laws could adversely affect our financial condition.
Many factors could limit our Korlym revenue, including: • the preference of some physicians for competing treatments for Cushing’s syndrome, including off-label treatments and generic versions of Korlym, should any such generic versions be introduced; • natural disasters or other catastrophes, such as the COVID-19 pandemic, that reduce the ability or willingness of physicians to see patients or of patients to bear the risk of leaving their homes to seek medical care; and • lack of availability of government or private insurance, the shift of a significant number of patients to Medicaid, which reimburses Korlym at a significantly lower price, or the introduction of government price controls or other price-reducing regulations, such as the Inflation Reduction Act of 2022, that may significantly limit Medicare reimbursement rates.
Many factors could limit our Korlym revenue, including: • the preference of some physicians for competing treatments for Cushing’s syndrome, including off-label treatments and generic versions of Korlym; and • lack of availability of government or private insurance, the shift of a significant number of patients to Medicaid, which reimburses Korlym at a significantly lower price, or the introduction of government price controls or other price-reducing regulations, such as the Inflation Reduction Act of 2022, that may significantly limit Medicare reimbursement rates.
In addition, physicians and patients may choose not to use Korlym as a treatment for Cushing’s syndrome simply to avoid the risk of terminating a pregnancy. We may not have adequate insurance to cover our exposure to product liability claims.
In addition, physicians and patients may choose not to use Korlym as a treatment for Cushing’s syndrome simply to avoid the risk of terminating a pregnancy.
There may be others of which we are unaware that could materially harm our business or financial condition and cause the price of our stock to decline, in which case you could lose all or part of your investment. 11 Summary of Principal Risks The following bullet points summarize the principal risks we face, each of which could adversely affect our business, operations and financial results.
There may be others of which we are unaware that could materially harm our business or financial condition and cause the price of our stock to decline, in which case you could lose all or part of your investment.
Please see the risk factor, “The COVID-19 pandemic has lengthened the time it takes to initiate and advance some of our clinical trials.” During the development of a product candidate, we may decide, or the FDA or other regulatory authorities may require us, to conduct more pre-clinical or clinical studies or to change the size or design of a trial already underway, thereby delaying or preventing the completion of development and increase its cost.
During the development of a product candidate, we may decide, or the FDA or other regulatory authorities may require us, to conduct more pre-clinical or clinical studies or to change the size or design of a trial already underway, thereby delaying or preventing the completion of development and increase its cost.
It is likely that other companies will seek FDA approval to market a generic version of Korlym. While we will vigorously protect our intellectual property, there can be no assurance our efforts will be successful.
It is likely that other companies will seek FDA approval to market a generic version of Korlym. While we will vigorously protect our intellectual property, there can be no assurance our efforts will be successful. Other companies offer different medications to treat patients with Cushing’s syndrome. The availability of competing treatments could limit our revenue from Korlym.
Neither type of financing may be available to us on attractive terms or at all. If we obtain funds through collaborations with other companies, we may have to relinquish rights to one or more of our product candidates.
If we obtain funds through collaborations with other companies, we may have to relinquish rights to one or more of our product candidates.
We also depend on vendors to manufacture the active pharmaceutical ingredient (“API”) and capsules or tablets for our product candidates. If our suppliers become unable or unwilling to perform these functions and we cannot transfer these activities to replacement vendors in a timely manner, our business will be harmed.
If our suppliers become unable or unwilling to perform these functions and we cannot transfer these activities to replacement vendors in a timely manner, our business will be harmed.
Although we control only certain aspects of these third parties’ activities, we are responsible for ensuring that every study adheres to its protocol and meets regulatory and scientific standards.
Third-party clinical investigators and clinical sites enroll patients and CROs manage many of our trials and perform data collection and analysis. Although we control only certain aspects of these third parties’ activities, we are responsible for ensuring that every study adheres to its protocol and meets regulatory and scientific standards.
Research analysts publish estimates of our future revenue and earnings based on their own analysis. The revenue guidance we provide may be one factor they consider when determining their estimates. General Risk Factors We need to increase the size of our organization and may experience difficulties in managing growth.
The revenue guidance we provide may be one factor they consider when determining their estimates. General Risk Factors We need to increase the size of our organization and may experience difficulties in managing growth. Our commercial and research and development efforts are constrained by our limited administrative, operational and management resources.
Patients may be unwilling or unable to travel to clinical trial sites, for example, or clinical materials or data may be lost. Our insurance, if available at all, would likely be insufficient to cover losses resulting from disasters or other business interruptions. Other companies offer or are attempting to develop different medications to treat patients with Cushing’s syndrome.
Patients may be unwilling or unable to travel to clinical trial sites, for example, or clinical materials or data may be lost. Our insurance, if available at all, would likely be insufficient to cover losses resulting from disasters or other business interruptions. 15 We may not have adequate insurance to cover our exposure to product liability claims.
It is difficult to predict our revenue and our actual results may vary materially from our guidance. The effect on our business of the COVID-19 pandemic is difficult to forecast. In addition, the rate of physician adoption of Korlym and the actions of government and private payers is uncertain.
It is difficult to predict our revenue and our actual results may vary materially from our guidance. In addition, the rate of physician adoption of Korlym and the actions of government and private payers is uncertain. We may experience competition from generic versions of Korlym, which our public revenue guidance does not anticipate.
We may experience competition from generic versions of Korlym, which our public revenue guidance does not anticipate. We may not meet our financial guidance or other investor expectations for other reasons, including those arising from the risks and uncertainties described in this report and in our other public filings and public statements.
We may not meet our financial guidance or other investor expectations for other reasons, including those arising from the risks and uncertainties described in this report and in our other public filings and public statements. Research analysts publish estimates of our future revenue and earnings based on their own analysis.
We anticipate that this provision will significantly limit the revenue Corcept receives and may materially reduce our revenue and profits. There continues to be federal and state initiatives to contain healthcare costs, in part informed by the current atmosphere of mounting criticism of prescription drug costs in the United States.
There continues to be federal and state initiatives to contain healthcare costs, in part informed by the current atmosphere of mounting criticism of prescription drug costs in the United States.
If any of the analysts covering us downgrades or discontinues coverage of our stock, the price of our common stock could decline rapidly and significantly. Paucity of research coverage may also adversely affect our stock price. Sale of a substantial number of shares of our common stock may cause its price to decline.
The market for our common stock may be affected by the reports financial analysts publish about us. If any of the analysts covering us downgrades or discontinues coverage of our stock, the price of our common stock could decline rapidly and significantly. Paucity of research coverage may also adversely affect our stock price.
Risks Related to our Capital Needs and Financial Results We may need additional capital to fund our operations or for strategic reasons. Such capital may not be available on acceptable terms or at all. We are dependent on revenue from the sale of Korlym and our cash reserves to fund our commercial operations and development programs.
Any of these events could seriously harm our business. Risks Related to our Capital Needs and Financial Results We may need additional capital to fund our operations or for strategic reasons. Such capital may not be available on acceptable terms or at all.
Our commercial and research and development efforts are constrained by our limited administrative, operational and management resources. To date, we have relied on a small management team. Growth will impose significant added responsibilities on members of management, including the need to recruit and retain additional employees.
To date, we have relied on a small management team. Growth will impose significant added responsibilities on members of management, including the need to recruit and retain additional employees. Our financial performance and ability to compete will depend on our ability to manage growth effectively.
To that end, we must: • manage our sales and marketing efforts, clinical trials, research and manufacturing activities effectively; • hire more management, clinical development, administrative and sales and marketing personnel; and • continue to develop our administrative systems and controls. 22 Failure to accomplish any of these tasks, which are more difficult during the COVID-19 pandemic, could harm our business.
To that end, we must: • manage our sales and marketing efforts, clinical trials, research and manufacturing activities effectively; • hire more management, clinical development, administrative and sales and marketing personnel; and • continue to develop our administrative systems and controls.
Failure to generate sufficient Korlym revenue could prevent us from fully funding our planned commercial and clinical activities and would likely cause our stock price to decline. The COVID-19 pandemic has adversely affected and is continuing to adversely affect our business.
Failure to generate sufficient Korlym revenue could prevent us from fully funding our planned commercial and clinical activities and would likely cause our stock price to decline. 12 If a generic version of Korlym is successfully commercialized, our business, results of operations and financial position would be adversely affected.
Failure of these vendors to perform their duties or meet expected timelines may prevent or delay approval of our product candidates. Third-party clinical investigators and clinical sites enroll patients and CROs manage many of our trials and perform data collection and analysis.
Vendors perform many of the activities necessary to carry out our clinical trials, including drug product distribution, trial management and oversight and data collection and analysis. Failure of these vendors to perform their duties or meet expected timelines may prevent or delay approval of our product candidates.
We had also sued Sun and Hikma with respect to their proposed generic version of Korlym, although we settled those lawsuits in June 2021 and December 2022, respectively. The terms of our settlement with Sun and Hikma are subject to customary review by the Federal Trade Commission and Department of Justice.
We had also sued Sun and Hikma with respect to their proposed generic versions of Korlym, although we settled those lawsuits in June 2021 and December 2022, respectively. The terms of these settlements permit entry by Sun and Hikma, with customary restrictions, following the start of sales of Teva’s generic product.
We may in the future be the subject of shareholder suits that we believe were prompted by allegations made by short sellers. ITEM 1B. UNRESOLVED STAFF COMMENTS None. ITEM 2. PROPERTIES We lease 47,022 square feet of office space in Menlo Park, California for our corporate facilities. Our current lease expires in June 2023.
We may in the future be the subject of shareholder suits that we believe were prompted by allegations made by short sellers. ITEM 1B. UNRESOLVED STAFF COMMENTS None.
It also created a new California data protection agency authorized to issue substantive regulations and could result in increased privacy and information security enforcement. The CPRA is in full effect as of January 1, 2023, and similar laws passed in Virginia, Colorado, Connecticut and Utah will take effect starting in 2023.
It also created a new California data protection agency authorized to issue substantive regulations and could result in increased privacy and information security enforcement.
Russia’s invasion of Ukraine or another war of international dispute may cause an increase in the number and severity of such malicious incidents. There can be no assurance that our cybersecurity systems and processes will prevent unauthorized access in the future that causes serious harm to us, our patients or employees.
There can be no assurance that our cybersecurity systems and processes will prevent unauthorized access in the future that causes serious harm to us, our patients or employees. We may also experience security breaches that remain undetected for an extended period.
If Korlym revenue declines significantly, we may need to curtail our operations or raise funds to support our plans. We may also choose to raise funds for strategic reasons. We cannot be certain funding will be available on acceptable terms or at all. Equity financing would cause dilution, debt financing may involve restrictive covenants.
We cannot be certain funding will be available on acceptable terms or at all. Equity financing would cause dilution, debt financing may involve restrictive covenants. Neither type of financing may be available to us on attractive terms or at all.
There can be no assurance of a successful outcome. We have sued Teva in Federal District Court with respect to their proposed generic versions of Korlym. In November 2020, the PTAB ruled against Teva in a challenge Teva had brought to one of our patents, a ruling which the Federal Circuit Court of Appeals has affirmed.
There can be no assurance of a successful outcome. We have sued Teva in Federal District Court with respect to its proposed generic versions of Korlym. On December 29, 2023, the Court issued a ruling in that case finding that Teva’s generic product would not infringe the patents we have asserted against Teva.
Natural disasters, some possibly related to the increasing effects of climate change, could damage or destroy clinical trial sites, our office spaces, the residences of our employees or the facilities or residences of our vendors, contractors or consultants, which could significantly harm our operations.
Natural disasters, such as earthquakes, fires, extreme weather events or widespread outbreaks of a deadly disease such as COVID-19, could disrupt our commercial and clinical activities or damage or destroy clinical trial sites, our office spaces, the residences of our employees or the facilities or residences of our vendors, contractors or consultants, which could significantly harm our operations.
Failure can occur at any time. • The COVID-19 pandemic has lengthened the time it takes to initiate and advance some of our clinical trials. • Vendors perform many of the activities necessary to carry out our clinical trials, including drug product distribution, trial management and oversight and data collection and analysis.
Failure to obtain or maintain regulatory approvals for our product candidates would prevent us from commercializing them. • Vendors perform many of the activities necessary to carry out our clinical trials, including drug product distribution, trial management and oversight and data collection and analysis.
We use a single specialty pharmacy, Optime, to dispense Korlym and perform related pharmacy operations, patient support and related services, including the collection of payments from insurers representing approximately 99 percent of our revenue. If Optime does not adhere to its agreements with payers, it may not be able to collect some or all of the payments due to us.
If Optime does not adhere to its agreements with payers or does not continue to meet regulatory requirements concerning pharmacy operations, it may not be able to collect some or all of the payments due to us.
The facilities used by our vendors to manufacture and package the API and drug product for Korlym and our product candidates must be approved by the FDA and, in some cases, the European Medicines Agency (“EMA”) or the Medicines and 15 Healthcare products Regulatory Agency (“MHRA”).
The facilities used by our vendors to manufacture and package the API and drug product for Korlym and our product candidates and distribute them to hospitals, clinics and patients, must be approved by government regulators in the United States, Europe, and elsewhere.
Sales of a substantial number of shares of our stock in the public market could reduce its price.
By reducing our cash balance, our repurchases of common stock could hamper our ability to execute our plans, meet financial obligations or access financing. Sale of a substantial number of shares of our common stock may cause its price to decline. Sales of a substantial number of shares of our stock in the public market could reduce its price.
We would seek a court order stopping such a course of action, but even if we were to prevail and Teva were to withdraw its product 13 and pay us damages the temporary availability of a generic version of Korlym might materially harm our results of operations and financial condition.
If its launch is successful, it may materially harm our results of operations and financial condition, even if our on-going appeal is successful and Teva were required to withdraw its product and pay us damages.
Failure of these vendors to perform their duties or meet expected timelines may prevent or delay approval of our product candidates. • We may be unable to obtain or maintain regulatory approvals for our product or product candidates, which would prevent us from commercializing our product candidates. • Our products and product candidates may cause undesirable side effects that halt their clinical development, prevent their regulatory approval, limit their commercial potential or cause us significant liability.
Failure of these vendors to perform their duties or meet expected timelines may prevent or delay approval of our product candidates.
Recently enacted laws and the regulations and policies implementing them, as well as other healthcare-related measures that may be adopted in the future, could materially reduce our Korlym revenues and our ability to develop and commercialize our product candidates. We depend on vendors to manufacture Korlym’s active ingredient, form it into tablets, package it and dispense it to patients.
We depend on vendors to manufacture Korlym’s active ingredient, form it into tablets, package it and dispense it to patients. We also depend on vendors to manufacture the active pharmaceutical ingredient (“API”) and capsules or tablets for our product candidates.
If these third parties cannot perform the services we require in a timely way and we cannot successfully implement replacements or workarounds, our business, results of operations and financial condition could be harmed. COVID-19 has made it difficult to grow our commercial business.
A resurgence of COVID-19 or the widespread occurrence of another deadly illness could adversely affect our business, operations and financial results. The COVID-19 pandemic made it difficult to grow our commercial business and slowed the pace of some of our clinical trials.
Research analysts may not continue to provide or initiate coverage of our common stock or may issue negative reports. The market for our common stock may be affected by the reports financial analysts publish about us.
Please see “Part IV, Item 15, Notes to Consolidated Financial Statements – Income Taxes.” Changes to existing tax laws could materially increase the amounts we pay, which would reduce our after tax net income. Research analysts may not continue to provide or initiate coverage of our common stock or may issue negative reports.
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Many of them have been or may become exacerbated by the COVID-19 pandemic.
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Summary of Principal Risks The following bullet points summarize the principal risks we face, each of which could adversely affect our business, operations and financial results. Below, we have arranged these risks by the part of our business they most directly affect.
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For clarity of presentation, we have arranged these risks by the part of our business they most directly affect – (i) commercial operations, (ii) research and development, (iii) capital need and financial results, (iv) intellectual property and (v) our stock price. A sixth group of “general risks” lists risks that affect our business as a whole.
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Even if we deem that our product candidates’ clinical trial results demonstrate safety and efficacy, regulatory authorities may not agree.
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COVID-19, a serious and sometimes fatal illness, has spread to every country in the world and throughout the United States. Many countries, including most states of the United States, reacted by instituting quarantines, “lockdowns” and other public health restrictions on leisure activities, work and travel.
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We have appealed that decision to the Federal Circuit Court of Appeals, but there can be no assurance our appeal will be successful. Because Teva has received FDA approval, it has been able, since August 2020, to market its generic product, notwithstanding our ongoing litigation. Teva has announced the launch of its generic product.
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Although pandemic-related restrictions have been eased or removed in some places, including California, our business remains subject to pandemic-related controls, which may become more restrictive at any time.
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Market entry by Sun or Hikma could materially harm our results of operations and financial condition, even if our on-going appeal is successful and they were required to withdraw its product and pay us damages. Please see “Part I, Item 3, Legal Proceedings” for additional details.
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We rely on third-party manufacturers, distributors (including the specialty pharmacy that dispenses Korlym), information technology and software service providers, law and accounting firms, clinical research organizations and consultants who are subject to, or may become subject to, pandemic-related controls.

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Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeOn March 12, 2021, we filed a lawsuit in the United States District Court for the District of New Jersey against Hikma for infringement of the ’214 patent, the ʼ216 patent, U.S. Patent Nos. 10,842,800 and U.S. Patent Nos. 10,842,801. On December 7, 2022, we entered into an agreement with Hikma resolving this litigation.
Biggest change(“Hikma”) had submitted an ANDA to the FDA seeking authorization to manufacture, use or sell a generic version of Korlym in the United States. In March 2021, we filed a lawsuit in the United States District Court for the District of New Jersey against Hikma for infringement of the ’214 patent, U.S. Patent No. 10,500,216, the ’800 patent and U.S.
The complaint named our board of directors, Chief Executive Officer and current Chief Business Officer as defendants, and us as nominal defendant. The complaint alleges causes of action for breach of fiduciary duty, violation of Section 14(a) of the Exchange Act, waste of corporate assets, contribution and indemnification, aiding and abetting, and gross mismanagement.
The complaint named our board of directors, Chief Executive Officer and current Chief Business Officer as defendants, and us as nominal defendant. The complaint alleges causes of action for breach of fiduciary duty, violation of Section 14(a) of the Exchange Act, waste of corporate assets, contribution and indemnification, aiding and abetting, and gross 26 mismanagement.
Although the outcome of any such matters and the amount, if any, of our liability with respect to them cannot be predicted with certainty, we do not believe that they will have a material adverse effect on our business, results of operations or financial position. ITEM 4. MINE SAFETY DISCLOSURES Not applicable. 28 PART II
Although the outcome of any such matters and the amount, if any, of our liability with respect to them cannot be predicted with certainty, we do not believe that they will have a material adverse effect on our business, results of operations or financial position. ITEM 4. MINE SAFETY DISCLOSURES Not applicable. 27 PART II
On December 19, 2019, a second purported shareholder derivative complaint was filed in the United States District Court for the District of Delaware by Jeweltex Pension Plan, captioned Jeweltex Pension Plan v. James N. Wilson, et al. , Civil Action 27 No. 1:19-cv-02308.
In December 2019, a second purported shareholder derivative complaint was filed in the United States District Court for the District of Delaware by Jeweltex Pension Plan, captioned Jeweltex Pension Plan v. James N. Wilson, et al. , Civil Action No. 1:19-cv-02308.
On September 30, 2021, the case was further stayed pending a resolution of the Melucci litigation. On January 31, 2022, a purported shareholder derivative complaint was filed in the Delaware Court of Chancery by Joel B. Ritchie, captioned Joel B. Ritchie v. G. Leonard Baker, et al., Case No. 2022-0102-SG.
In September 2021, the case was further stayed pending a resolution of the Melucci litigation. In January 2022, a purported shareholder derivative complaint was filed in the Delaware Court of Chancery by Joel B. Ritchie, captioned Joel B. Ritchie v. G. Leonard Baker, et al. , Case No. 2022-0102-SG.
The complaint seeks damages in an amount to be proved at trial. On April 6, 2020, this action was stayed pending a resolution of our motions to dismiss the Melucci litigation. On December 20, 2020, the case was further stayed pending a resolution of our motion to dismiss the third amended complaint in the Melucci litigation.
The complaint seeks damages in an amount to be proved at trial. In April 2020, this action was stayed pending a resolution of our motions to dismiss the Melucci litigation. In December 2020, the case was further stayed pending a resolution of our motion to dismiss the third amended complaint in the Melucci litigation.
As required by law, we and Hikma have submitted the settlement agreement to the United States Federal Trade Commission and the United States Department of Justice for review. Other Matters On March 14, 2019, a purported securities class action complaint was filed in the United States District Court for the Northern District of California by Nicholas Melucci ( Melucci v.
As required by law, we submitted the settlement agreement to the United States Federal Trade Commission and the United States Department of Justice for review. Other Matters In March 2019, a purported securities class action complaint was filed in the United States District Court for the Northern District of California by Nicholas Melucci ( Melucci v.
The complaint asserts a putative class period extending from August 2, 2017 to February 5, 2019 and seeks unspecified monetary relief, interest and attorneys’ fees. On October 7, 2019, the Court appointed a lead plaintiff and lead counsel. The lead plaintiff’s consolidated complaint was filed on December 6, 2019.
The complaint asserts a putative class period extending from August 2, 2017 to February 5, 2019 and seeks unspecified monetary relief, interest and attorneys’ fees. In October 2019, the Court appointed a lead plaintiff and lead counsel. The lead plaintiff’s consolidated complaint was filed in December 2019.
Pursuant to the agreement, we have granted Hikma the right to sell a generic version of Korlym in the United States beginning October 1, 2034 or earlier under circumstances customary for settlement agreements of this type.
Pursuant to the agreement, we have granted Hikma the right to sell a generic version of Korlym in the United States beginning October 1, 2034 or earlier under circumstances customary for settlement agreements of this type, including following the start of Teva's sales of a generic product.
No trial date has been set. We will vigorously enforce our intellectual property rights relating to Korlym but cannot predict the outcome of this matter. Hikma ANDA Litigation and Settlement On February 1, 2021, we received a Paragraph IV Notice Letter advising that Hikma Pharmaceuticals USA Inc.
We will vigorously enforce our intellectual property rights relating to Korlym but cannot predict the outcome of these matters. Hikma ANDA Litigation and Settlement In February 2021, we received a Paragraph IV Notice Letter advising that Hikma Pharmaceuticals USA Inc.
On October 23, 2019, this action was stayed pending a resolution of our motions to dismiss the Melucci litigation. On December 20, 2020, the case was further stayed pending a resolution of our motion to dismiss the third amended complaint in the Melucci litigation. On September 30, 2021, the case was further stayed pending a resolution of the Melucci litigation.
In December 2020, the case was further stayed pending a resolution of our motion to dismiss the third amended complaint in the Melucci litigation. In September 2021, the case was further stayed pending a resolution of the Melucci litigation.
On March 15, 2018, we filed a lawsuit in the United States District Court for the District of New Jersey against Teva for infringement of our patents. On October 12, 2018, Teva received tentative approval from the FDA for its ANDA. In accordance with the Hatch-Waxman Act, however, FDA final approval of Teva’s ANDA was stayed until August 1, 2020.
In March 2018, we filed a lawsuit in the United States District Court for the District of New Jersey (“D.N.J.”) against Teva for infringement of our patents. In August 2020, Teva received final approval from the FDA for its ANDA in accordance with the Hatch-Waxman Act.
On April 20, 2022, the case was further stayed pending a resolution of the Melucci litigation. We will respond vigorously to the above allegations but cannot predict the outcome of these matters.
In April 2022, the case was further stayed pending a resolution of the Melucci litigation. As settlement of the Melucci litigation advances, we expect all stays of the above-described derivative actions to be lifted and for litigation to commence. We will respond vigorously to the above allegations but cannot predict the outcome of these matters.
The Proposed Settlement is subject to the final approval of the United States District Court for the Northern District of California. On September 30, 2019, a purported shareholder derivative complaint was filed in the United States District Court for the District of Delaware by Lauren Williams, captioned Lauren Williams v. G. Leonard Baker, et al. , Civil Action No. 1:19-cv-01830.
In September 2019, a purported shareholder derivative complaint was filed in the United States District Court for the District of Delaware by Lauren Williams, captioned Lauren Williams v. G. Leonard Baker, et al. , Civil Action No. 1:19-cv-01830. The complaint named our board of directors, Chief Executive Officer and current Chief Business Officer as defendants, and us as nominal defendant.
The complaint named our board of directors, Chief Executive Officer and current Chief Business Officer as defendants, and us as nominal defendant. The complaint alleges breach of fiduciary duty, violation of Section 14(a) of the Exchange Act, insider selling, misappropriation of insider information and waste of corporate assets and seeks damages in an amount to be proved at trial.
The complaint alleges breach of fiduciary duty, violation of Section 14(a) of the Exchange Act, insider selling, misappropriation of insider information and waste of corporate assets and seeks damages in an amount to be proved at trial. In October 2019, this action was stayed pending a resolution of our motions to dismiss the Melucci litigation.
On February 8, 2023, we reached an agreement in principle (the “Proposed Settlement”) to resolve all claims in the Melucci litigation. Under the Proposed Settlement, we have agreed to make a one-time payment of $14.0 million, which will be covered in full by our insurers.
Under the Proposed Settlement, we have agreed to make a one-time payment of $14.0 million, which will be covered in full by our insurers. The Court granted preliminary approval of the Proposed Settlement on January 4, 2024, following which we paid $14.0 million into escrow. Our insurers reimbursed us in full.
On November 20, 2019, the PTAB agreed to initiate the PGR, and on November 19, 2020 issued a decision upholding the validity of the ’214 patent in its entirety. Teva appealed its loss to the Federal Circuit Court of Appeals, which on December 7, 2021, ruled in our favor.
The PTAB agreed to initiate the PGR, and in November 2020, issued a decision upholding the validity of the ’214 patent in its entirety, which decision the Federal Circuit Court of Appeals upheld. This matter is closed. In D.N.J., the parties completed briefing on cross-motions for summary judgment regarding infringement of the ’214 patent in July 2021.
The District Court 26 consolidated our lawsuits against Teva into a single action and set a trial date of February 2, 2021, which it later vacated. A new trial date has not been set. On May 7, 2019, Teva submitted to the Patent Trial and Appeal Board (“PTAB”) a petition for post-grant review (“PGR”) of the ’214 patent.
In May 2019, Teva 25 submitted to the Patent Trial and Appeal Board (“PTAB”) a petition for post-grant review (“PGR”) of U.S. Patent No. 10,195,214 (the “’214 patent”).
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On July 6, 2018, we filed an amended complaint, and on February 8, 2019, we filed a separate lawsuit against Teva, asserting infringement of several patents, including U.S. Patent No. 10,195,214 (the “ ʼ 214 patent”). On December 13, 2019, we filed a third lawsuit against Teva, asserting infringement of U.S. Patent Nos. 10,500,216 (the “ ʼ 216 patent”).
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On February 27, 2023, the Court denied both motions without prejudice. The patents currently at issue are the ʼ214 patent and U.S. Patent No. 10,842,800 (the “’800 patent”). Trial was held from September 26, 2023 through September 28, 2023 before Judge Renee Marie Bumb.
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The time for Teva to appeal or seek reconsideration of these adverse decisions has passed. This matter is closed. This lawsuit against Teva currently asserts the ‘214 patent and the ‘216 patent. The parties have completed briefing cross-motions for summary judgment regarding infringement of the ’214 patent. On February 27, 2023, the Court denied both motions without prejudice.
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On December 29, 2023, Judge Bumb issued a ruling finding that Teva’s proposed generic product would not infringe either the ‘214 or ‘800 patent. We have appealed that decision to the Federal Circuit Court of Appeals. Teva has announced the launch of its generic product.
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(“Hikma”) had submitted an ANDA to the FDA seeking authorization to manufacture, use or sell a generic version of Korlym in the United States. The Notice Letter contains Paragraph IV certifications against certain of our patents related to Korlym, alleging that these patents will not be infringed by Hikma’s proposed product, are invalid and/or are unenforceable.
Added
Patent Nos. 10,842,801. On December 7, 2022, we entered into an agreement with Hikma resolving this litigation.
Added
With respect to these allegations, we have stated, from the beginning, that we have done nothing wrong. On February 8, 2023, we reached an agreement in principle (the “Proposed Settlement”) to resolve all claims in the Melucci litigation.
Added
The Proposed Settlement does not include admission of liability on our part. The Proposed Settlement is subject to the final approval of the Court. The Court has issued its preliminary approval and has scheduled a hearing with respect to final approval on June 6, 2024.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeWe have elected to use the Nasdaq US Benchmark TR Index and Nasdaq Biotechnology Index (consisting of a group of 120 companies in the biotechnology sector, including us) for purposes of the performance comparison that appears below, which shows the cumulative stockholder return assuming the investment of $100 and the reinvestment of any dividends and is based on the returns of the component companies weighted according to their market capitalizations.
Biggest changeWe have elected to use the Nasdaq US Benchmark TR Index and Nasdaq Biotechnology Index (consisting of a group of 120 companies in the biotechnology sector, including us) for purposes of the performance comparison that appears below.
The return shown in the graph below for our common stock is not necessarily indicative of future performance. We do not make or endorse any predictions as to future stockholder returns. 29 Five-Year Cumulative Total Returns of our Common Stock (CORT), the Nasdaq US Benchmark TR Index (NQUSBT) and the Nasdaq Biotechnology Index (NBI) ITEM 6. [RESERVED] 30
The return shown in the graph below for our common stock is not necessarily indicative of future performance. We do not make or endorse any predictions as to future stockholder returns. 28 Five-Year Cumulative Total Returns of our Common Stock (CORT), the Nasdaq US Benchmark TR Index (NQUSBT) and the Nasdaq Biotechnology Index (NBI) ITEM 6. [RESERVED] 29
(2) We paid $0.7 million to satisfy the tax withholding obligations associated with the net-share settlement of these cashless option exercises.
(2) We paid $0.5 million to satisfy the tax withholding obligations associated with the net-share settlement of these cashless option exercises.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information Our common stock is traded on The Nasdaq Capital Market under the symbol “CORT.” Stockholders of Record and Dividends As of February 21, 2023, we had 107,899,316 shares of common stock outstanding held by 28 stockholders of record.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information Our common stock is traded on The Nasdaq Capital Market under the symbol “CORT.” Stockholders of Record and Dividends As of February 6, 2024, we had 103,517,388 shares of common stock outstanding held by 379 stockholders of record.
Repurchases of Securities The following table contains information relating to the purchases of our common stock in the three months ended December 31, 2022 as part of the cashless net exercises of stock options (in thousands, except average price per share): Fiscal Period Total Number of Shares Purchased (1) Average Price Per Share Total Purchase Price of Shares (2) October 1, 2022 to October 31, 2022 19 $ 27.75 $ 536 November 1, 2022 to November 30, 2022 81 25.74 2,079 December 1, 2022 to December 31, 2022 24 22.55 532 Total 124 $ 25.45 $ 3,147 (1) In October 2022, we issued 29,584 shares of common stock as part of net-share settlement of cashless option exercises, of which 19,306 shares were surrendered to us in satisfaction of related exercise cost and tax obligations.
Repurchases of Securities The following table contains information relating to the purchases of our common stock in the three months ended December 31, 2023 as part of the cashless net exercises of stock options (in thousands, except average price per share): Fiscal Period Total Number of Shares Purchased (1) Average Price Per Share Total Purchase Price of Shares (2) October 1, 2023 to October 31, 2023 1 $ 28.34 $ 22 November 1, 2023 to November 30, 2023 43 25.65 1,114 December 1, 2023 to December 31, 2023 76 29.50 2,240 Total 120 $ 28.10 $ 3,376 (1) In October 2023, we issued 1,250 shares of common stock as part of net-share settlement of cashless option exercises, of which 783 shares were surrendered to us in satisfaction of related exercise cost and tax obligations.
In November 2022, we issued 120,595 shares of common stock as part of net-share settlement of cashless option exercises, of which 80,770 shares were surrendered to us. In December 2022, we issued 60,480 shares of common stock as part of net-share settlement of cashless option exercises, of which 23,590 shares were surrendered to us.
In November 2023, we issued 62,115 shares of common stock as part of net-share settlement of cashless option exercises, of which 43,435 shares were surrendered to us. In December 2023, we issued 161,773 shares of common stock as part of net-share settlement of cashless option exercises, of which 75,914 shares were surrendered to us.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

50 edited+16 added−21 removed28 unchanged
Biggest changeIn the comparable periods in 2021 and 2020, we spent $318.8 million and $11.0 million, respectively, acquiring shares of our common stock, offset by $16.2 million and $23.2 million received from the exercise of stock options, respectively, resulting in net cash used in financing activities of $302.6 million for the year ended and net cash provided by financing activities of $12.2 million for the year ended December 31, 2020.
Biggest changeIn the year ended December 31, 2023, we spent $154.5 million acquiring shares of our common stock, comprised of $145.4 million pursuant to our tender offer, $7.4 million acquiring shares of our common stock in connection with the net exercise of employee and director stock options and $1.7 million to satisfy tax withholding requirements from vesting of restricted stock grants, offset by $3.8 million received in connection with our ESPP and $2.0 million net cash received from the exercise of stock options, resulting in net cash used in financing activities of $148.7 million.
The cash in our bank accounts and our marketable securities could be reduced or our access to them restricted if the financial institutions holding them were to fail or severely adverse conditions were to arise in the markets for public or private debt securities. We have never experienced a lack of access to cash or material realized losses.
The cash in our bank accounts and our marketable securities could be reduced or our access to them restricted if the financial institutions holding them were to fail or severely adverse conditions were to arise in the markets for public or private debt securities. We have never experienced a material lack of access to cash or material realized losses.
Benefits of orphan drug designation by the EC are similar, but also 31 include protocol assistance from the European Medicines Agency (“EMA”), access to the centralized marketing authorization procedure in the European Union (“EU”) and, if we obtain approval, ten years of exclusive marketing rights in the EU for the treatment of patients with Cushing’s syndrome.
Benefits of orphan drug designation by the EC are similar, but also include protocol assistance from the European Medicines Agency (“EMA”), access to the centralized marketing authorization procedure in the European Union (“EU”) and, if we obtain approval, ten years of exclusive marketing rights in the EU for the treatment of patients with Cushing’s syndrome.
Relacorilant is also expected to treat the patients’ Cushing’s syndrome generated by their tumors’ excess production of cortisol. Relacorilant in Patients with Prostate Cancer . Androgen deprivation is the standard treatment for prostate cancer because androgens stimulate prostate tumor growth. Tumors often escape androgen deprivation therapy when cortisol’s activity at the GR stimulates tumor growth.
Relacorilant is also expected to treat the patients’ Cushing’s syndrome generated by their tumors’ excess production of cortisol. 31 Relacorilant in Patients with Prostate Cancer . Androgen deprivation is the standard treatment for prostate cancer because androgens stimulate prostate tumor growth. Tumors often escape androgen deprivation therapy when cortisol’s activity at the GR stimulates tumor growth.
We are providing relacorilant and placebo for the study and have licensed patents covering the use of relacorilant combined with anticancer agents such as enzalutamide in the treatment of patients with this indication. 32 Amyotrophic Lateral Sclerosis (“ALS” ) ALS, also known as Lou Gehrig’s disease, is a devastating neuromuscular illness.
We are providing relacorilant and placebo for the study and have licensed patents covering the use of relacorilant combined with anticancer agents such as enzalutamide in the treatment of patients with this indication. Amyotrophic Lateral Sclerosis (“ALS” ) ALS, also known as Lou Gehrig’s disease, is a devastating neuromuscular illness.
We provide financial assistance to eligible patients whose insurance policies have high deductibles or co-payments and deduct the amount of such assistance from gross revenue. We determine the assistance we provide each patient by applying our program guidelines to that patient’s financial 36 position and their insurance policy’s co-payment and deductible requirements.
We provide financial assistance to eligible patients whose insurance policies have high deductibles or co-payments and deduct the amount of such assistance from gross revenue. We determine the assistance we provide each patient by applying our program guidelines to that patient’s financial position and their insurance policy’s co-payment and deductible requirements.
To help us achieve that goal, we fund our own patient support programs and donate money to independent charitable foundations that help patients pay for all aspects of their Cushing’s syndrome care, whether or not that care includes taking Korlym. Relacorilant .
To help us achieve that goal, we fund our own patient support programs and donate money to independent charitable foundations that help patients pay for all aspects of their Cushing’s syndrome care, whether or not that care includes taking Korlym.
Our selective cortisol modulator dazucorilant improved motor performance and reduced neuroinflammation and muscular atrophy in animal models of ALS. Following these compelling results, in October 2022 we initiated a Phase 2 trial of dazucorilant (the “DAZALS” trial) in patients with ALS.
Our selective cortisol modulator dazucorilant improved motor performance and reduced neuroinflammation and muscular atrophy in animal models of ALS. Following these compelling results, we initiated a Phase 2 trial (“DAZALS”) of dazucorilant in patients with ALS in October 2022.
Cost of sales – Cost of sales includes the cost of API, tableting, packaging, personnel, overhead, stability testing and distribution. Cost of sales was $5.4 million for the year ended December 31, 2022, compared to $5.3 million and $5.6 million for the years ended December 31, 2021 and 2020, respectively.
Cost of sales – Cost of sales includes the cost of API, tableting, packaging, personnel, overhead, stability testing and distribution. Cost of sales was $6.5 million for the year ended December 31, 2023, compared to $5.4 million and $5.3 million for the years ended December 31, 2022 and 2021, respectively.
The primary endpoint is PFS, with overall survival as a key secondary endpoint. Patients in ROSELLA will have received prior bevacizumab therapy, which is the standard of care in the United States for patients with platinum-resistant ovarian cancer.
The primary endpoint is PFS; overall survival is a key secondary endpoint. Patients in ROSELLA will have received prior bevacizumab therapy, which is the standard of care for patients with platinum-resistant ovarian cancer.
Relacorilant shares Korlym’s affinity for the glucocorticoid receptor (“GR”), but, unlike Korlym, has no affinity for the progesterone receptor (“PR”), and so is not the “abortion pill” and does not cause other effects associated with PR affinity, including endometrial thickening and vaginal bleeding.
Relacorilant shares Korlym’s affinity for the glucocorticoid receptor (“GR”), but, unlike Korlym, has no affinity for the progesterone receptor (“PR”), and so is not the “abortion pill.” It does not cause other effects associated with PR affinity, including endometrial thickening and vaginal bleeding.
If successful, we expect GRACE to provide the basis for a new drug application (“NDA”) for relacorilant as a treatment for patients with any etiology of endogenous Cushing’s syndrome. Our second Phase 3 trial of relacorilant, GRADIENT, is studying patients whose Cushing’s syndrome is caused by a benign adrenal tumor.
If successful, GRACE will provide the basis for a new drug application (“NDA”) for relacorilant as a treatment for patients with any etiology of endogenous Cushing’s syndrome. 30 Our second Phase 3 trial of relacorilant, GRADIENT, is studying patients whose Cushing’s syndrome is caused by a benign adrenal tumor.
Combining a cortisol modulator with an androgen modulator may block this escape route. Our collaborators at the University of Chicago plan to initiate a randomized, placebo-controlled Phase 2 trial of relacorilant plus enzalutamide in patients with prostate cancer, pre-prostatectomy.
Combining a cortisol modulator with an androgen modulator may block this escape route. Our collaborators at the University of Chicago have initiated a randomized, placebo-controlled Phase 2 trial of relacorilant plus enzalutamide in patients with prostate cancer, pre-prostatectomy.
NASH is an advanced form of nonalcoholic fatty liver disease that afflicts millions of patients and is a leading cause of liver-related mortality.
Nonalcoholic steatohepatitis (“NASH”) is an advanced form of nonalcoholic fatty liver disease that afflicts millions of patients and is a leading cause of liver-related mortality.
We are conducting two Phase 3 trials (named GRACE and GRADIENT) of our proprietary, selective cortisol modulator, relacorilant, as a treatment for patients with Cushing’s syndrome. Relacorilant was well-tolerated in its Phase 1 and Phase 2 trials.
We are conducting two Phase 3 trials (“GRACE” and “GRADIENT”) of our proprietary, selective cortisol modulator, relacorilant, as a treatment for patients with Cushing’s syndrome. Relacorilant was well-tolerated in its Phase 1 and Phase 2 trials.
Women with a history of tumors that do not respond to initial platinum-based treatments (i.e., women with “primary platinum-refractory” disease) and those who have received more than three prior lines of therapy will be excluded.
Women with a history of tumors that do not respond to initial platinum-based treatments (i.e., women with “primary platinum-refractory” disease) and those who have received more than three prior lines of therapy will be excluded. Relacorilant in Patients with Adrenal Cancer with Cortisol Excess .
Because many people who suffer from Cushing’s syndrome are undiagnosed or inadequately treated, we have developed and continue to refine and expand programs to educate physicians and patients about screening for hypercortisolism and the role Korlym can play in treating patients with the disorder. We also have a field-based force of medical science liaisons.
Because many people who suffer from Cushing’s syndrome are undiagnosed or inadequately treated, we have developed and continue to refine and expand programs to educate physicians and patients about screening for hypercortisolism and the role Korlym can play in treating patients with the disorder.
Patients who exhibit pre-specified improvements in hypertension and/or glucose metabolism enter a 12-week, double-blind, “randomized withdrawal” phase, in which half of the patients continue receiving relacorilant and half receive placebo.
In the GRACE trial, each patient receives relacorilant for 22 weeks. Patients who exhibit pre-specified improvements in hypertension and/or glucose metabolism enter a 12-week, double-blind, “randomized withdrawal” phase, in which half of the patients continue receiving relacorilant and half receive placebo.
Research and development expense – Research and development expense includes the cost of (1) recruiting and compensating development personnel, (2) clinical trials, (3) drug product and preclinical studies in support of clinical trials and regulatory submissions, (4) discovery research and (5) the development of drug formulations and manufacturing processes.
Research and development expense – Research and development expense includes the cost of (1) clinical trials, (2) recruiting and compensating development personnel, (3) manufacturing investigational drug product (4) preclinical studies, (5) drug discovery research and (6) the development of new drug formulations and manufacturing processes.
In April 2021, we suspended our Phase 2a trial of our selective cortisol modulator miricorilant as a potential treatment for NASH after four of the five patients who received miricorilant exhibited both elevated liver enzymes and large rapid reductions in liver fat. Liver enzyme levels in all affected patients returned to baseline or below baseline after miricorilant was withdrawn.
In April 2021, we suspended our Phase 2a trial of our selective cortisol modulator miricorilant as a potential treatment for NASH after four of the five patients who received miricorilant exhibited both elevated liver enzymes and large rapid reductions in liver fat.
Cost of sales includes the cost of manufacturing Korlym, including materials, third-party manufacturing costs and indirect personnel and other overhead costs, based on the number of Korlym tablets for which we recognize revenue, as well as costs of stability testing, logistics and distribution.
We destroy expired inventory and recognize the related costs as cost of sales in that period’s statement of income. 35 Cost of sales includes the cost of manufacturing Korlym, including materials, third-party manufacturing costs and indirect personnel and other overhead costs, based on the number of Korlym tablets for which we recognize revenue, as well as costs of stability testing, logistics and distribution.
Research and development expense was $131.0 million for the year ended December 31, 2022, compared to $113.9 million for the comparable period in 2021. The increase was primarily due to the advancement of our development programs and increased spending on employee compensation expenses.
Research and development expense was $184.4 million for the year ended December 31, 2023, compared to $131.0 million and $113.9 million for the years ended December 31, 2022 and 2021, respectively. The increase for the year ended December 31, 2023 compared to 2022 was primarily due to increased spending on our development programs and employee compensation expenses.
The trial’s primary endpoint is the rate and degree of relapse of hypertension in patients receiving placebo measured against the rate and degree of relapse of hypertension in those continuing relacorilant. GRACE has a planned enrollment of 130 patients with Cushing’s syndrome at sites in the United States, Canada, Europe and Israel.
The trial’s primary endpoint is the rate and degree of relapse of hypertension in patients receiving placebo measured against the rate and degree of relapse of hypertension in those continuing relacorilant. GRACE has enrolled 152 patients at sites in the United States, Canada, Europe and Israel. Enrollment is now complete.
To determine the appropriate amount to reserve against these rebates, we identify Korlym sold to patients covered by government-funded programs, apply the applicable government discount to these sales, then estimate the portion of total rebates we expect will be claimed.
To determine the appropriate amount to reserve against these rebates, we identify Korlym sold to patients covered by government-funded programs, apply the applicable government discount to these sales, then estimate utilization of such programs by government payors.
Selling, general and administrative expense was $152.8 million for the year ended December 31, 2022, compared to $122.4 million for the comparable period in 2021. The increase was primarily due to increased sales and marketing activities, employee compensation expenses, and legal fees.
Selling, general and administrative expense for the years ended December 31, 2023, 2022 and 2021 was $184.3 million, $152.8 million and $122.4 million, respectively. The increase for the year ended December 31, 2023 compared to 2022 was primarily due to increased employee compensation expenses and legal fees.
In the year ended December 31, 2022, we spent $21.7 million acquiring shares of our common stock in connection with the net exercise of employee and director stock options and vesting of restricted stock grants, offset by $4.4 million received from the exercise of stock options and purchases through our Employee Stock Purchase Plan, resulting in net cash used in financing activities of $17.3 million.
For the year ended December 31, 2022, we spent $21.7 million acquiring shares of our common stock, offset by $4.4 million received from the exercise of stock options, resulting in net cash used in financing activities of $17.3 million.
In the United States, relacorilant’s orphan designation confers tax credits, reduced regulatory fees and, provided we obtain approval for the treatment of patients with Cushing’s syndrome, seven years of exclusive marketing rights.
The United States Food and Drug Administration (“FDA”) and the European Commission (“EC”) have designated relacorilant as an orphan drug for the treatment of Cushing’s syndrome. In the United States, relacorilant’s orphan designation confers tax credits, reduced regulatory fees and, provided we obtain approval for the treatment of patients with Cushing’s syndrome, seven years of exclusive marketing rights.
However, multiple replicated pre-clinical results as well as the results of our double-blind, placebo-controlled trial (published in the Journal of Clinical Psychopharmacology (Hunt et al., 2021)) suggest that miricorilant has the potential to significantly reduce weight gain caused by the administration of olanzapine. Accordingly, we plan to further study miricorilant’s potential to prevent AIWG.
However, numerous replicated pre-clinical study results as well as the results of our double-blind, placebo-controlled trial in healthy subjects (published in the Journal of Clinical Psychopharmacology (Hunt et al., 2021)) suggest that miricorilant may significantly prevent weight gain caused by the administration of olanzapine.
As of December 31, 2022, we had cash, cash equivalents and marketable securities of $436.6 million, consisting of cash and cash equivalents of $66.3 million and marketable securities of $370.3 million, compared to cash, cash equivalents and marketable securities of $335.8 million, consisting of cash and cash equivalents of $77.6 million and marketable securities of $258.2 million as of December 31, 2021.
As of December 31, 2023, we had cash, cash equivalents and marketable securities of $425.4 million, consisting of cash and cash equivalents of $135.6 million and marketable securities of $289.8 million, compared to cash, cash equivalents and marketable securities of $436.6 million, consisting of cash and cash equivalents of $66.3 million and marketable securities of $370.3 million as of December 31, 2022.
Income tax expense – Income tax expense was $14.8 million for the year ended December 31, 2022, compared to $12.5 million for the comparable period in 2021. Income tax expense increased for the year ended December 31, 2022 from the comparable period in 2021 due to decreased excess tax benefits for stock option exercises compared to 2021.
Income tax expense – Income tax expense for the years ended December 31, 2023, 2022, and 2021 was $18.4 million, $14.8 million, and $12.5 million, respectively. The increase for the year ended December 31, 2023 compared to 2022 was due to decreased excess tax benefits for stock option exercises.
Safety and tolerability of relacorilant plus nab-paclitaxel were comparable to nab-paclitaxel monotherapy. In June 2022, we initiated a pivotal Phase 3 trial (“ROSELLA”) that seeks to replicate the positive results observed in our Phase 2 study. ROSELLA has a planned enrollment of 360 women with recurrent, platinum-resistant ovarian cancer, randomized 1:1 to receive either relacorilant plus nab-paclitaxel or nab-paclitaxel monotherapy.
In June 2022, we initiated a pivotal Phase 3 trial (“ROSELLA”) that seeks to replicate the positive results observed in our Phase 2 study. ROSELLA has a planned enrollment of 360 women with recurrent, platinum-resistant ovarian cancer, half of whom will receive 150 mg of relacorilant intermittently in addition to nab-paclitaxel, with the other half receiving nab-paclitaxel monotherapy.
We base our estimates on historical experience and on other assumptions we believe to be reasonable. Actual results may differ from our estimates. Our significant accounting policies are described in Note 1, Basis of Presentation and Summary of Significant Accounting Policies , of the Notes to Consolidated Financial Statements included in Part IV of this Annual Report on Form 10-K.
Our significant accounting policies are described in Note 1, Basis of Presentation and Summary of Significant Accounting Policies , of the Notes to Consolidated Financial Statements included in Part IV of this Annual Report on Form 10-K.
Interest and other income – Interest and other income for the years ended December 31, 2022, 2021 and 2020 was $3.6 million, $0.5 million and $3.4 million, respectively, and consisted primarily of interest income from marketable securities.
Interest and other income – Interest and other income for the years ended December 31, 2023, 2022 and 2021 was $17.3 million, $3.6 million and $0.5 million, respectively, and consisted primarily of interest income from marketable securities. The increase for the year ended December 31, 2023 compared to 2022 was due to market-wide increase in interest rates.
The increase was primarily due to increases in employee recruiting and compensation expenses, sales and marketing expenses and professional services. 34 We expect our selling, general and administrative expense to be higher in 2023 than in 2022 due to increased commercial and administrative activities, including litigation and administrative support for increased research and development and marketing efforts.
We expect our selling, general and administrative expense to be higher in 2024 than in 2023 due to increased commercial and administrative activities, including litigation and administrative support for increased research and development and marketing efforts.
Selling, general and administrative expense – Selling, general and administrative expense includes (1) compensation of employees, consultants and contractors engaged in commercial and administrative activities, (2) the cost of vendors supporting commercial activities and (3) legal and accounting fees.
Research and development spending in future years will depend on the outcome of our pre-clinical and clinical trials and our development plans. 33 Selling, general and administrative expense – Selling, general and administrative expense includes (1) compensation of employees, consultants and contractors engaged in commercial and administrative activities, (2) the cost of vendors supporting commercial activities and (3) legal and accounting fees.
The increase for the year ended December 31, 2021 compared to 2020 was primarily due to higher revenue. Net cash (used in) provided by investing activities for the year ended December 31, 2022, 2021 and 2020 was $(114.3) million, $136.1 million and $(119.3) million, respectively.
Net cash provided by (used in) investing activities for the years ended December 31, 2023, 2022 and 2021 was $90.9 million, $(114.3) million and $136.1 million, respectively.
Net cash provided by operating activities for the years ended December 31, 2022, 2021 and 2020 was $120.3 million, $167.9 million and $152.0 million, respectively. The decrease for the year ended December 31, 2022 compared to 2021 was primarily due to higher current income taxes resulting from the capitalization of research and development costs for tax purposes.
Net cash provided by operating activities for the years ended December 31, 2023, 2022 and 2021 was $127.0 million, $120.3 million and $167.9 million, respectively. The increase for the year ended December 31, 2023 compared to 2022 was primarily due to higher revenue.
In addition, clinical development is subject to government oversight and regulations that may change without notice. We expect our research and development expense to be higher in 2023 than in 2022 as our clinical programs advance. Research and development spending in future years will depend on the outcome of our pre-clinical and clinical trials and our development plans.
In addition, clinical development is subject to government oversight and regulations that may change without notice. We expect our research and development expense to be higher in 2024 than in 2023 as we add new clinical trials and our existing trials enroll more patients.
Overview We are a commercial-stage company engaged in the discovery and development of medications to treat severe endocrine, oncologic, metabolic and neurological disorders by modulating the effects of the hormone cortisol. Cushing’s Syndrome Korlym . We sell Korlym in the United States, using experienced sales representatives to call on physicians caring for patients with endogenous Cushing’s syndrome (hypercortisolism).
Overview We are a commercial-stage company engaged in the discovery and development of medications to treat severe endocrinologic, oncologic, metabolic and neurologic disorders by modulating the effects of the hormone cortisol. Since 2012, we have marketed Korlym ® for the treatment of patients suffering from Cushing’s syndrome.
Net Operating Loss Carryforwards See Note 9 , Income Taxes in our audited consolidated financial statements. Critical Accounting Policies and Estimates Our consolidated financial statements have been prepared in accordance with U.S. GAAP, which requires us to make estimates and judgments that affect the amount of assets, liabilities and expenses we report.
As of December 31, 2023, we had retained earnings of $402.5 million. 34 Net Operating Loss Carryforwards See Note 9 , Income Taxes in our audited consolidated financial statements. Critical Accounting Policies and Estimates Our consolidated financial statements have been prepared in accordance with U.S.
Some of our trials of indications not considered immediately life-threatening, such as Cushing’s syndrome, have experienced slower enrollment. In addition, some clinical sites have reduced the frequency with which physicians see study participants. Our trials in patients with immediately life-threatening diseases, such as our Phase 2 trial in women with platinum-resistant ovarian cancer, have not encountered delays.
The pandemic’s impact on our clinical development programs was variable. Some of our trials of indications not considered immediately life-threatening, such as Cushing’s syndrome, experienced slower enrollment and difficulty retaining patients. In addition, some clinical sites reduced the frequency with which physicians were able to examine study participants.
Cost of sales as a percentage of revenue was 1.3 percent, 1.4 percent and 1.6 percent for the years ended December 31, 2022, 2021 and 2020, respectively. The decreases in cost of sales as a percentage of revenue are due to reduced manufacturing costs and increased price of Korlym.
Cost of sales as a percentage of revenue was 1.3 percent for each of the years ended December 31, 2023 and 2022.
Relacorilant also does not appear to cause hypokalemia (low potassium), a potentially serious condition that is a leading cause of patients stopping treatment with Korlym. Forty-four percent of patients in Korlym’s pivotal trial experienced hypokalemia. In the GRACE trial, each patient receives relacorilant for 22 weeks.
There is no evidence that relacorilant causes hypokalemia (low potassium), a potentially serious condition that is a leading cause of patients stopping treatment with Korlym. Forty-four percent of patients in Korlym’s pivotal trial experienced hypokalemia. Unlike all other medications used to treat Cushing’s syndrome, relacorilant does not prolong the heart’s QT interval, a potentially deadly off-target effect.
The change for the year ended December 31, 2022 compared to 2021 was primarily due to allocation of cash generated from our operating activities towards marketable securities rather than share repurchases.
The change for the year ended December 31, 2023 compared to 2022 was primarily due to allocation of cash proceeds from maturities of marketable securities towards cash equivalents in anticipation of the closing of our tender offer in April 2023 and in anticipation of our share buyback program announced in January 2024.
Year Ended December 31, 2022 2021 2020 (1) (in thousands) Development programs: Oncology $ 20,987 $ 17,984 $ 34,207 Cushing’s syndrome 30,031 28,639 26,821 Metabolic diseases 24,270 20,594 20,408 Pre-clinical and early-stage selective cortisol modulators and ALS 26,084 21,924 14,726 Unallocated activities, including manufacturing and regulatory activities 16,819 10,617 7,380 Stock-based compensation 12,800 14,106 11,222 Total research and development expense $ 130,991 $ 113,864 $ 114,764 (1) Beginning in the first quarter of 2021, expenses for the year ended December 31, 2020 previously allocated to oncology and endocrinology were re-allocated between Cushing's syndrome, metabolic diseases and pre-clinical development programs.
Year Ended December 31, 2023 2022 2021 (in thousands) Development programs: Oncology $ 41,433 $ 20,987 $ 17,984 Cushing’s syndrome 41,196 30,031 28,639 Metabolic diseases 36,104 24,270 20,594 Pre-clinical and early-stage selective cortisol modulators and ALS 30,852 26,084 21,924 Unallocated activities, including manufacturing and regulatory activities 19,366 16,819 10,617 Stock-based compensation 15,402 12,800 14,106 Total research and development expense $ 184,353 $ 130,991 $ 113,864 It is difficult to predict the timing and cost of development activities, which are subject to many uncertainties and risks, including inconclusive or negative results, slow patient enrollment, adverse side effects and difficulties in the formulation or manufacture of study drugs and lack of drug-candidate efficacy.
COVID-19 Pandemic Public health restrictions put in place to reduce the impact of the global COVID-19 pandemic, as well as measures voluntarily undertaken by patients, physicians, hospitals and medical clinics, have reduced our revenue growth and make it difficult to grow our Korlym business. The pandemic’s impact on the pace of our clinical development programs has been variable.
In October 2023, we initiated a double-blind, placebo-controlled, Phase 1 trial to further study miricorilant’s potential to prevent AIWG. COVID-19 Pandemic Public health restrictions and measures voluntarily undertaken by patients, physicians, hospitals and health clinics to reduce the impact of COVID-19 reduced our revenue growth and made it difficult to grow our Korlym business.
For the years ended December 31, 2022 and 2021, sales 33 volume accounted for 54.6 percent and 20.7 percent of the increases, respectively. Increases in the average price of Korlym accounted for the remaining growth due to price increases effective January 1, 2022 and March 1, 2021.
Net product revenue was $482.4 million for the year ended December 31, 2023, compared to $401.9 million and $366.0 million for the years ended December 31, 2022 and 2021, respectively. Higher sales volume accounted for 57.4 percent of the increase for the year ended December 31, 2023, with the remaining growth due to a price increase effective January 1, 2023.
In the United States, six million people take antipsychotic medications such as olanzapine and risperidone to treat illnesses such as schizophrenia, bipolar disorder and depression. While these drugs are very effective, they often cause rapid and sustained weight gain, other metabolic disturbances and, ultimately, cardiovascular disease.
While these drugs are very effective, they often cause rapid and sustained weight gain, other metabolic disturbances and, ultimately, cardiovascular disease. Patients taking these medications experience a 10 to 25-year reduction in life expectancy, due largely to increased cardiovascular events, such as heart attacks and strokes.
While our core effective tax rate has remained relatively consistent throughout the years, the tax rate can vary based upon the timing of provisions related to discrete tax items, including current and future excess tax benefits from stock-based compensation. Liquidity and Capital Resources Since 2015, we have relied on revenues from the sale of Korlym to fund our operations.
Liquidity and Capital Resources Since 2015, we have relied on revenues from the sale of Korlym to fund our operations.
The IRA includes provisions imposing a 1% excise tax on share repurchases that occur after December 31, 2022 and introduces a 15% corporate alternative minimum tax (“CAMT”) on adjusted financial statement income. The CAMT will be effective for us beginning on January 1, 2024. We do not expect the CAMT to have a significant effect on our consolidated financial statements.
The IRA also permits CMS to negotiate prices for certain high-expenditure Medicare Part B or Part D drugs, imposes a one percent excise tax on certain share repurchases and introduces a 15 percent corporate alternative minimum tax on adjusted financial statement income. The corporate alternative minimum tax became effective for us on January 1, 2024.
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The planned enrollment for this study is 130 patients. Many of the clinical sites in GRACE are participating in GRADIENT. The United States Food and Drug Administration (“FDA”) and the European Commission (“EC”) have designated relacorilant as an orphan drug for the treatment of Cushing’s syndrome.
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Discussions of 2021 items and year-to-year comparisons between 2022 and 2021 are not included, and can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2022.
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In our Phase 2 trial, women who met the entry criteria for ROSELLA and received relacorilant intermittently experienced significantly improved PFS (median: 7.3 months versus 3.7 months, hazard ratio: 0.40; p-value: 0.005) and OS (median: 17.9 months versus 12.6 months, hazard ratio: 0.38; p-value: 0.011) relative to patients in the comparator arm.
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Our portfolio of proprietary selective cortisol modulators consists of four structurally distinct series totaling more than 1,000 compounds. Cushing’s Syndrome Korlym . We sell Korlym in the United States, using experienced sales representatives to call on physicians caring for patients with hypercortisolism (“Cushing’s syndrome”). We also have a field-based force of medical science liaisons.
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The patients in the intermittent arm also experienced a significant improvement in DoR relative to those in the comparator arm (median: 5.6 months versus 3.1 months, hazard ratio: 0.29; p-value: 0.016). Relacorilant in Patients with Adrenal Cancer with Cortisol Excess .
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We have initiated a Phase 4 study (“CATALYST”), to determine the prevalence of Cushing’s syndrome in patients with difficult-to-control diabetes (HbA1c of 7.5 percent or higher) despite receiving standard treatment. In CATALYST’s first phase, 1,000 patients will be evaluated.
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Our ongoing Phase 1b dose-finding trial in patients with presumed NASH has identified a range of doses that appear to cause large reductions in liver fat without causing excessive liver irritation. We plan to start a Phase 2 trial in the fourth quarter of 2023. Antipsychotic-Induced Weight Gain (“AIWG” ).
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Those found to have Cushing’s syndrome may elect to enter the second phase of the study, in which patients will be randomized to receive either Korlym or placebo for 24 weeks. We expect that data from CATALYST will help physicians better identify patients with Cushing’s syndrome and determine their optimal treatment. Relacorilant .
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Patients taking these medications experience a 10 to 25-year reduction in life expectancy, due largely to increased cardiovascular events, such as heart attacks and strokes. Patients in our two double-blind, placebo-controlled, Phase 2 trials of miricorilant (GRATITUDE and GRATITUDE II) did not experience reversal of AIWG.
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Safety and tolerability of relacorilant plus nab-paclitaxel were comparable to nab-paclitaxel monotherapy. The final analysis from our Phase 2 trial was published in the Journal of Clinical Oncology (Colombo et al., 2023), the premiere journal of the American Society of Clinical Oncology (ASCO).
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We expect that pandemic-related impediments to our business will continue so long as there are COVID-19 public health restrictions and/or risk-reducing behavior by physicians and patients.
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Liver enzyme levels in all affected patients returned to baseline or below baseline (i.e., to healthier levels) after miricorilant was withdrawn. Our Phase 1b study has identified a dosing regimen that effectively reduced liver fat, improved liver health and key metabolic and lipid measures and was well-tolerated.
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Please see “COVID-19 Pandemic” under Item 1 of this Annual Report and the risk factor under Item 1A of this Annual Report, “The COVID-19 pandemic has adversely affected and is continuing to adversely affect our business.” Inflation Reduction Act of 2022 The Inflation Reduction Act of 2022 (“IRA”) was enacted on August 16, 2022.
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Following these compelling results, we initiated a Phase 2b trial (“MONARCH”) of miricorilant in patients with NASH in October 2023. MONARCH has a planned enrollment of 150 patients, randomized 2:1 to receive either 100 mg of miricorilant twice weekly or placebo for 48 weeks.
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Results of Operations Net Product Revenue – Net product revenue is gross product revenue from sales to our customers less deductions for estimated government rebates and chargebacks. Net product revenue was $401.9 million for the year ended December 31, 2022, compared to $366.0 million and $353.9 million for the years ended December 31, 2021 and 2020, respectively.
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The primary endpoint is reduction in liver fat, with NASH resolution and fibrosis improvement as key secondary endpoints. Antipsychotic-Induced Weight Gain (“AIWG” ). In the United States, six million people take antipsychotic medications such as olanzapine and risperidone to treat illnesses such as schizophrenia, bipolar disorder and depression.
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Research and development expense was $113.9 million for the year ended December 31, 2021, compared to $114.8 million for the comparable period in 2020.
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Patients in our two double-blind, placebo-controlled, Phase 2 trials (“GRATITUDE” and “GRATITUDE II”) of miricorilant with already existing weight gain stimulated by anti-psychotic medication did not exhibit weight loss.
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The decrease was primarily due to a decline in spending on our oncology program due to timing and completion of patient enrollments in our clinical trials, partially offset by increased spending on employee recruiting and compensation expenses and the advancement of our other development programs.
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Trials in patients with immediately life-threatening diseases, such as our Phase 2 trial in women with platinum-resistant ovarian cancer, did not encounter delays. Although the impact of COVID-19 on our business is now significantly reduced, some physicians and hospitals continue to limit interactions with sales representatives and medical science liaisons, which makes growing our business more difficult.
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It is difficult to predict the timing and cost of development activities, which are subject to many uncertainties and risks, including inconclusive or negative results, slow patient enrollment, adverse side effects, difficulties in the formulation or manufacture of study drugs and the lack of drug-candidate efficacy.
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Inflation Reduction Act of 2022 The Inflation Reduction Act of 2022 (“IRA”) was enacted on August 16, 2022. The IRA includes provisions requiring manufacturers to pay a rebate to the Centers for Medicare & Medicaid Services (“CMS”) if the price of a Medicare Part B or Part D drug increases faster than the rate of inflation.
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Selling, general and administrative expense was $122.4 million for the year ended December 31, 2021, compared to $105.3 million for the comparable period in 2020.
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In addition, beginning in 2025, the IRA will also shift a significant portion 32 of the Medicare beneficiary costs currently borne by the government and beneficiaries to manufacturers. We anticipate this provision will significantly limit the revenue we receive from Medicare patients and may materially reduce our profits.
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Settlement expense and insurance recovery related to Melucci litigation – In connection with the Proposed Settlement of the Melucci litigation, we recorded a settlement expense of $14.0 million and corresponding insurance recovery of $14.0 million in Operating Expenses on our Consolidated Statement of Income in the fourth quarter of 2022.
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We do not expect it to significantly affect our consolidated financial statements.
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Interest and other income increased for the year ended December 31, 2022 from the comparable periods in 2021 and 2020 due to a higher cash and investment balance and market-wide increases in interest rates.
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Please see the risk factor under Item 1A of this Annual Report on Form 10-K, “ New laws, government regulations, or changes to existing laws and regulations could make it difficult or impossible for us to obtain acceptable prices or adequate insurance coverage and reimbursement for Korlym, which would adversely affect our results of operations and financial position. ” Results of Operations Net Product Revenue – Net product revenue is gross product revenue from sales to our customers less deductions for estimated government rebates and chargebacks, patient co-pay assistance program, discounts provided to our specialty distributor for prompt payment and reserves for expected returns.
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Income tax expense was $12.5 million for the year ended December 31, 2021, compared to $25.6 million for the comparable period in 2020. Income tax expense decreased for the year ended December 31, 2021 from the comparable period in 2020 primarily due to increases in excess tax benefits for stock option exercises compared to 2020.
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Net cash used in financing activities was $148.7 million, $17.3 million and $302.6 million for the years ended December 31, 2023, 2022 and 2021, respectively.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK The primary objective of our investment activities is to preserve capital. As of December 31, 2022, the fair value of our cash and cash equivalents and marketable securities was $436.6 million. Our marketable securities consisted of corporate notes, commercial paper, asset-backed securities, U.S.
Biggest changeITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK The primary objective of our investment activities is to preserve capital. As of December 31, 2023, the fair value of our cash and cash equivalents and marketable securities was $425.4 million. Our marketable securities consisted of corporate notes, commercial paper, asset-backed securities, U.S.
Due to the short-term nature and high liquidity of these instruments, an increase or decrease in market interest rates by 25 basis points would not have a material impact on the total value of our portfolio as of December 31, 2022. ITEM 8.
Due to the short-term nature and high liquidity of these instruments, an increase or decrease in market interest rates by 25 basis points would not have a material impact on the total value of our portfolio as of December 31, 2023. ITEM 8.

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