Corcept Therapeutics Incorporated — Q3 2011 Form 10-Q
Reporting period: Quarter and nine months ended September 30, 2011. Financial statements are unaudited. Corcept was a development-stage pharmaceutical company with no commercial product revenue. Its lead candidate, Korlym, was under FDA review for endogenous Cushing’s Syndrome; the stated PDUFA review goal date was February 17, 2012.
Key financial results
Amounts below are in millions of dollars, except per-share data.
| Metric | Q3 2011 | Q3 2010 | Nine months 2011 | Nine months 2010 |
|---|---|---|---|---|
| Revenue | $0 | $0 | $0 | $0 |
| Research and development expense | $3.2 | $5.2 | $14.4 | $14.3 |
| General and administrative expense | $3.2 | $1.9 | $8.0 | $5.3 |
| Total operating expenses | $6.4 | $7.1 | $22.4 | $19.6 |
| Net loss | $6.4 | $7.1 | $22.4 | $18.9 |
| Net loss per share | $0.08 | $0.10 | $0.27 | $0.28 |
| Operating cash used | Not presented by quarter | Not presented by quarter | $21.1 | $16.8 |
- At September 30, cash and cash equivalents were $45.9 million, versus $24.6 million at December 31, 2010; working capital was $43.6 million. Total current liabilities were $2.7 million. The filing reports no debt balance.
- Cash increased by $21.3 million over the first nine months, principally reflecting $42.4 million of financing proceeds, including approximately $41.9 million net from a January public offering. The company had an accumulated deficit of $198.6 million.
- Margins are not meaningful because the company reported no revenue. Interest and other income was approximately $3,000 in the first nine months of 2011, compared with $758,000 in 2010, which included a $750,000 legal settlement.
Changes versus comparable periods
- Q3 R&D expense fell 38% year over year, mainly as clinical-trial and NDA-support study costs declined. Nine-month R&D expense was nearly flat: lower trial costs were largely offset by increased Korlym manufacturing, NDA-related staffing and consultancy, and development activity.
- G&A expense rose 71% in Q3 and 51% for the first nine months, reflecting commercialization preparation, added staffing and consultancy, stock-based compensation, and legal costs.
- Nine-month operating cash use increased to $21.1 million from $16.8 million. Net loss increased to $22.4 million from $18.9 million, partly because 2010 included the settlement income.
Outlook, management commentary and risks
- Management believed existing resources would fund planned operations through the end of 2012. It expected higher cash use during the remainder of 2011 and said additional funding would be needed beyond 2012 for commercialization and continuing or expanding development programs.
- Corcept was preparing for a potential U.S. Korlym launch, conditional on FDA approval. The FDA accepted the Cushing’s Syndrome NDA for filing in June 2011 and advised in August that no advisory committee meeting would be held. The company reported positive Phase 3 study endpoints, but approval was not assured.
- Korlym’s Phase 3 psychotic-depression study continued; the filing notes that three prior Phase 3 trials for that indication had failed to meet primary or key secondary endpoints. CORT 108297 was in Phase 1b/2a development.
- Key risks include FDA review outcomes or requests for further studies; continued losses and dependence on external financing; a single-source tablet manufacturer and the need to qualify a backup; clinical, regulatory and commercialization uncertainty; competition, reimbursement and market acceptance; and risks associated with mifepristone’s use in pregnancy termination.
- Commitments included approximately $2.0 million for Korlym active ingredient orders and, after quarter-end, approximately $1.1 million for two additional Korlym studies. The filing reports no material legal proceedings and no off-balance-sheet arrangements.
Investor facts to verify
- Whether FDA review met the February 17, 2012 goal date, and the approval, labeling and REMS outcome for Korlym.
- Actual cash burn, spending against management’s end-of-2012 runway estimate, and the timing and terms of any additional financing.
- Progress in qualifying the backup tablet manufacturer and securing adequate commercial supply.
- Enrollment and results for the psychotic-depression trial and CORT 108297 studies, including any changes to development plans or costs.
- Potential commercial uptake, pricing and reimbursement for Korlym if approved, and the effect of competing treatments or products.