Corcept Therapeutics Incorporated — FY 2022 Form 10-K
Reporting period: Fiscal year ended December 31, 2022. This is an annual filing, not a quarterly report; the supplied text does not provide a clear standalone fourth-quarter income statement or cash-flow summary. Corcept is a commercial-stage biopharmaceutical company whose marketed product is Korlym, for certain adults with endogenous Cushing’s syndrome. Its pipeline focuses on selective cortisol modulators.
Financial performance and liquidity
| Metric | FY 2022 | FY 2021 | Change |
|---|---|---|---|
| Net product revenue | $401.9 million | $366.0 million | +9.8% |
| Income from operations | $112.6 million | $124.5 million | -9.5% |
| Net income | $101.4 million | $112.5 million | -9.9% |
| Diluted EPS | $0.87 | $0.89 | -2.2% |
| Cash provided by operating activities | $120.3 million | $167.9 million | -28.3% |
- Cost of sales was $5.4 million, or 1.3% of revenue; gross margin was approximately 98.7%. Operating margin was approximately 28.0%, and net margin approximately 25.2%.
- Research and development expense increased 15.0% to $131.0 million. Selling, general and administrative expense increased 24.9% to $152.8 million.
- Cash, cash equivalents and marketable securities totaled $436.6 million at year-end, up from $335.8 million. Current assets were $499.3 million and current liabilities $72.5 million.
- The balance sheet presents no borrowings or other debt balance. Total liabilities were $81.6 million. The company says it expects current resources and Korlym revenue to fund operations and planned R&D for the next 12 months and beyond without additional financing.
- Investing activities used $114.3 million, primarily reflecting purchases of marketable securities. Financing activities used $17.3 million, including cash paid for share withholding and netted option exercises. FY 2021 financing cash use was $302.6 million, including a $207.5 million tender offer and $88.5 million of repurchases.
Material changes versus the prior year
- Revenue growth reflected higher sales volume and Korlym price increases. Management attributed 54.6% of the 2022 revenue increase to sales volume and the remainder to price increases effective January 1, 2022.
- Despite higher revenue, operating income and net income declined as R&D and SG&A spending rose. R&D growth reflected advancing development programs and employee compensation; SG&A growth reflected commercial activity, compensation and legal fees.
- Operating cash flow fell to $120.3 million, primarily due to higher current income taxes following the capitalization of R&D costs for tax purposes. Cash taxes paid rose to $39.7 million from $9.1 million.
- Basic and diluted weighted-average shares fell to 106.8 million and 116.0 million, respectively, from 115.7 million and 126.0 million, following substantial 2021 repurchases.
Outlook, business developments and risks
- Management expects R&D and SG&A expenses to be higher in 2023 as clinical, commercial and administrative programs advance. The filing provides no specific 2023 revenue or earnings guidance.
- Relacorilant is in Phase 3 trials for Cushing’s syndrome and a Phase 3 trial for platinum-resistant ovarian cancer. Dazucorilant entered a Phase 2 ALS trial in October 2022. The company planned a Phase 2 NASH trial for the fourth quarter of 2023; this is a stated plan, not a reported outcome.
- Corcept suspended a Phase 2a NASH trial of miricorilant after four of five treated patients developed elevated liver enzymes, which returned to baseline or below after treatment stopped. Two Phase 2 trials did not show reversal of antipsychotic-induced weight gain; the company plans to study prevention of that weight gain.
- COVID-19-related limits on patient visits and clinical-site activity had constrained Korlym growth and slowed some trials. Management said impacts could continue while restrictions or risk-reducing behavior persist.
- Generic competition is a central commercial risk. Teva has FDA approval for a generic Korlym product, and litigation remained ongoing; the filing says Teva could elect to market its product. Corcept settled with Hikma, granting it the right to sell a generic beginning October 1, 2034, or earlier under customary settlement conditions. The settlement was subject to government review.
- A U.S. Attorney’s Office investigation into Korlym sales and promotion, healthcare-professional relationships and payments, prior authorizations, and reimbursement remained ongoing. The company said it was cooperating and was not then considered a defendant.
- The proposed $14.0 million settlement of the Melucci securities class action was recorded in FY 2022 with an equal insurance recovery; the company stated the payment would be covered in full by insurers. Court approval remained pending.
- Other risks include dependence on Korlym, one API supplier and one specialty pharmacy; reimbursement and drug-pricing changes, including the Inflation Reduction Act; clinical and regulatory uncertainty; potential product side effects; and patent challenges. The auditor reported unqualified opinions on the financial statements and internal controls. Inventory excess and obsolescence estimates were identified as a critical audit matter.
Important facts for investors to verify
- Korlym prescription volume, net pricing, payer mix and rebate/chargeback assumptions underlying revenue growth.
- Whether Teva markets its generic product, the status and outcome of the remaining patent litigation, and the effective dates and terms of generic-entry settlements.
- Progress, enrollment, safety findings and results for the relacorilant Phase 3 trials and the dazucorilant ALS trial; confirm the status of the planned NASH trial.
- Developments in the U.S. Attorney’s Office investigation and final court approval and insurance payment of the Melucci settlement.
- Future operating cash flow and tax payments under R&D capitalization rules, and whether spending increases remain consistent with management’s stated funding outlook.