Corcept Therapeutics Inc

NASDAQ:CORT

Earnings Call Analysis

Corcept's strong growth and legal updates

Corcept Therapeutics announced a 39% increase in Q2 revenue, reaching $163.8 million, and raised its 2024 revenue guidance to $640-$670 million. Net income improved to $35.5 million. They reported significant growth in their endocrinology division driven by increased Korlym prescriptions and patient numbers. The CATALYST study revealed higher-than-expected hypercortisolism prevalence in type 2 diabetes patients. Legal proceedings against Teva over Korlym patents continue, with a decision expected by Q1 2025. Cash and investments stood at $492.5 million at the end of June.

Overview of Financial Performance

In the second quarter of 2024, Corcept Therapeutics reported a revenue of $163.8 million, marking a 39% increase compared to the same quarter of the previous year. This strong performance has led the company to revise its annual revenue guidance upward to between $640 million and $670 million. Net income for the quarter was $35.5 million, up from $27.5 million in the second quarter of the prior year. As of June 30th, cash and investments stood at $492.5 million.

Legal Battles and Patent Appeal

Corcept has been embroiled in a legal dispute with Teva Pharmaceuticals since March 2018 to prevent the marketing of a generic version of Korlym, which allegedly infringes on Corcept’s patents. Despite a trial court ruling against Corcept in December, the company has appealed the decision. If Corcept prevails, Teva would be required to remove its product from the market until the expiration of Corcept's patents in 2037. Oral arguments are expected in the fourth quarter of 2024, with a decision likely in the first quarter of 2025.

Clinical Developments and CATALYST Study

The CATALYST study has underscored the prevalence of hypercortisolism among patients with difficult-to-control type 2 diabetes, revealing that about one in four patients has this condition. The study, which is the largest of its kind, indicates a higher prevalence of hypercortisolism than previously assumed. Preliminary results have been significant enough to encourage broader screening and treatment. The second portion of the study, which includes a randomized treatment trial with Korlym or placebo, will provide crucial data by the end of the year.

Relacorilant Progress and NDA Submission

Corcept is advancing its selective cortisol modulator, relacorilant. The GRACE study has demonstrated promising efficacy and safety results, leading Corcept to plan for a New Drug Application (NDA) submission in the fourth quarter of 2024. The GRADIENT study, which focuses on patients with Cushing's syndrome due to adrenal adenoma or hyperplasia, is also expected to yield valuable data in the fourth quarter.

Oncology and Broader Implications

Corcept's oncology program is targeting platinum-resistant ovarian cancer with relacorilant, aiming to enhance the efficacy of chemotherapy treatments. The ongoing ROSELLA study, which involves 381 women, aims to replicate the success of an earlier phase II trial by extending progression-free survival. The company is also exploring relacorilant’s potential in treating prostate and adrenal cancers, hoping to disrupt important tumor growth pathways through cortisol modulation.

MASH and ALS Programs

The MONARCH study is investigating the effects of miricorilant on liver fat reduction and other key metabolic indicators in patients with metabolic dysfunction-associated steatohepatitis (MASH). Early results are promising, with significant reductions in liver fat and improvements in metabolic markers. Meanwhile, the DAZALS trial for ALS, which uses dazucorilant, is fully enrolled and results are expected by year-end. This compound aims to improve motor performance and reduce neuroinflammation.

Future Outlook and Market Dynamics

Corcept continues to grow its commercial business, driven by increased awareness and treatment of Cushing's syndrome. Despite the presence of generic versions of Korlym, the company’s robust support services and ongoing clinical successes have helped sustain its market position. Pricing strategies for future products like relacorilant will be carefully considered based on their efficacy, safety profiles, and market size.

Earnings Call Transcript 2024-Q2

[Operator]

Hello. Thank you for standing by. Welcome to Corcept Therapeutics conference call. [Operator Instructions] I would now like to turn the call over to Atabak Mokari. You may begin.

[Atabak Mokari, executive]

Hello, everyone. Good afternoon, and thank you for joining us. Today, we issued a press release announcing our financial results for the second quarter and providing a corporate update. A copy is available at corcept.com. Our complete financial results will be available when we file our Form 10-Q with the SEC. Today's call is being recorded. A replay will be available at the Investors Past Events tab of our website.

Statements during this call, other than statements of historical fact, are forward-looking statements based on our plans and expectations that are subject to risks and uncertainties, which might cause actual results to be materially different from those such statements expressed or implied. These forward-looking statements are described in today's press release and the risks and uncertainties that may affect them are described in the press release and in our annual report on Form 10-K and our quarterly reports on Form 10-Q. Please refer to those documents for additional information. We disclaim any intention or duty to update forward-looking statements.

Our revenue in the second quarter of 2024 was $163.8 million, an increase of 39% compared to the second quarter of the prior year. We expect our revenue growth to continue and have increased our 2024 revenue guidance to $640 million to $670 million. Net income was $35.5 million in the second quarter compared to $27.5 million in the second quarter of the prior year. Our cash and investments at June 30 was $492.5 million.

I will now turn the call over to Charlie Robb, our Chief Business Officer. Charlie?

[Gary Robb, executive]

Thanks, Atabak. I don't have much to report this quarter. As many of you know, in March 2018, we sued Teva to stop it from marketing a generic version of Korlym in violation of our patents. In December last year, the trial court ruled against us. We've appealed that decision to the Federal Circuit Court of Appeals. Briefing in the matter is complete. The documents are available at the government's page or website, if anyone would like to review them, and the next step is for the Federal Circuit to schedule oral argument. The timing of oral argument and issuance of an opinion are entirely up to the Federal Circuit and can't be known with certainty.

As I said before, a reasonable expectation will be for oral arguments to take place in the fourth quarter, perhaps late in the third quarter of this year, with the decision issuing in the first quarter of 2025, possibly very late in the fourth quarter of 2024. If we prevail, Teva would lose FDA approval of its product and have to remove it from the market, at least until the expiration of our patents in 2037. As I've said before, we're eager to advance this appeal. We strongly believe that our position is correct and the Federal Circuit, with its deep expertise in patent law, will agree.

I'll now turn the call over to Joe Belanoff, our Chief Executive Officer. Joe?

[Joseph K. Belanoff, executive]

Thank you, Charlie, and thank you, everyone, for joining us this afternoon. This has been an extremely active period at Corcept. Our commercial business continues to be very strong, and we are making progress in all of our clinical development programs. The past quarter marked several significant milestones for our endocrinology division. I will take a few minutes to elaborate on each area of progress. Individually, they are of great importance and collectively even more so.

The commercial growth in our endocrinology division was driven by another record number of new Korlym prescribers and by a record number of patients receiving Korlym. As physicians become increasingly aware that hypercortisolism is much more prevalent than previously assumed, they are screening and treating more patients. When Korlym is prescribed, we use the expertise and infrastructure that we have developed and refined over many years to support physicians and patients.

We have known for some time that there were more patients who would benefit from screening for Cushing's syndrome and ultimately from treatment that was commonly recognized. The findings from the prevalence portion of the CATALYST study make it clear that there are many more patients with hypercortisolism than was previously recognized.

CATALYST is the largest and most rigorous clinical study ever conducted to examine the prevalence of hypercortisolism in patients with difficult-to-control type 2 diabetes. Of the first 1,055 patients enrolled in the CATALYST study, 1 in 4 were found to have hypercortisolism. This is a far higher prevalence rate than was assumed with large implications for patient care.

Hypercortisolism was even more common in patients in this study with already recognized cardiovascular disease, particularly in those who needed 3 or more medications to manage their hypertension. More than 1/3 of this group of patients had hypercortisolism.

The CATALYST study was led by the top diabetologists in the United States and the results from the prevalence portion of the study were presented at the American Diabetes Association's Annual Scientific Sessions in Orlando last month. Much has subsequently been written about this presentation.

The second portion of the CATALYST study is ongoing. In this part of the study, patients are randomized to receive either Korlym or placebo. The study results will be available at the end of this year. As the awareness of Cushing's syndrome increases, we are simultaneously working to advance our proprietary selective cortisol modulator, relacorilant. Relacorilant has unique characteristics and our confidence in its efficacy and safety profile has increased with the results of the GRACE study.

As you recall, GRACE has 2 parts. In the open-label phase, 152 patients with Cushing's syndrome and either hypertension, hypoglycemia or both received relacorilant for 22 weeks. Patients who met prespecified improvements were given the opportunity to enter the trial's randomized double-blind withdrawal phase, in which half of the patients continue to receive relacorilant and half received placebo for 12 weeks.

Patients in the open-label phase of GRACE exhibited clinically meaningful and statistically significant improvements in hypertension, hyperglycemia, weight, lean muscle mass, waist circumference, cognition, Cushing's quality of life score and other measures of clinical importance. 63% of the patients with hypertension met the study's response criteria. Patients who enter the randomized withdrawal phase of grace, experience mean systolic and diastolic blood pressure improvements of 12.6 and 8.3 millimeters of mercury, as measured by 24-hour ambulatory blood pressure monitoring. The p-value on their change from baseline was less than 0.0001. 50% of the patients with hyperglycemia met the study's response criteria. The hyperglycemic group consisted of patients with diabetes and those with impaired glucose tolerance or prediabetes.

For the patients who entered the randomized withdrawal phase, a reduction in mean hemoglobin A1c of 0.7%, p-value less than 0.0001 and a reduction in mean fasting glucose of 25.2 milligrams per deciliter, p-value of 0.006 was achieved. In the randomized withdrawal phase, which compare patients taking relacorilant to those taking placebo, GRACE met its primary end point of maintenance of blood pressure control. The odds ratio, which is the primary end point in the statistical analysis plan in place with the FDA, was 0.17 with a p-value of 0.02.

Patients taking relacorilant were 6x more likely to maintain their blood pressure response compared to those taking placebo. In addition, patients who continue to take relacorilant in the randomized withdrawal phase maintained the broad range of improvements observed in the open-label phase, while those who received placebo experienced a significant worsening of their symptoms.

In both phases of GRACE, relacorilant was well tolerated, consistent with its known safety profile. Due to its unique mechanism of action, there were no relacorilant-induced instances of hypokalemia. In addition, there were no cases of drug-induced endometrial hypertrophy, no cases of adrenal insufficiency and no cases of QT prolongation, which was independently confirmed.

In June, we presented results from GRACE at the Endocrine Society Annual Meeting in Boston and the Heart in Diabetes Conference in Philadelphia. GRACE's clearly positive results are a welcome development for patients with Cushing's syndrome and constitute a significant step forward towards our new drug application for relacorilant, which we plan to submit in the fourth quarter. GRACE is not our only Phase III trial of relacorilant in patients with hypercortisolism.

GRADIENT is a randomized double-blind, placebo-controlled study in 137 patients whose hypercortisolism is caused by an adrenal adenoma or adrenal hyperplasia. Patients with this etiology of Cushing's syndrome often experience a less rapid decline, but their health outcomes are poor and include a significantly higher risk of premature death. We expect GRADIENT to produce valuable data about the treatment of an etiology of Cushing's syndrome that affects many patients. Enrollment is complete, and we expect data in the fourth quarter of this year.

As you know, we are also setting relacorilant as a treatment for different types of cancer mediated by cortisol activity. Our most advanced oncology program is in platinum-resistant ovarian cancer. We completed enrollment of 381 women in our pivotal ROSELLA study and expect to have enough events to analyze the primary end point of the study, progression-free survival by year-end. Women with platinum-resistant ovarian cancer are in urgent need of new treatment options. The goal of using relacorilant in this context is to resensitize ovarian tumors to the effects of chemotherapy by blending the anti-apoptotic effect of the patient's excessive cortisol activity.

Our goal for ROSELLA is to replicate our successful 178-patient controlled Phase II trial, which showed that women who received relacorilant intermittently, the day before, the day of and the day after they received nab-paclitaxel, exhibited a statistically significant improvement in progression-free survival and duration of response compared to the group who received nab-paclitaxel monotherapy.

Women in the relacorilant group also lived longer than those in the comparator arm. 29% of the patients who took intermittent relacorilant were alive 2 years after study start versus only 14% who took nab-paclitaxel alone. Importantly, the women who received relacorilant plus nab-paclitaxel experienced no additional side effect burden compared to those who received nab-paclitaxel alone. Results from the study were published in the Journal of Clinical Oncology in June 2023 with an accompanying editorial and presented at multiple U.S. and European medical conferences.

The design of ROSELLA closely tracks our previous Phase II trial. Women were randomized to 1:1 to receive either relacorilant plus nab-paclitaxel or nab-paclitaxel alone. The primary end point of ROSELLA is progression-free survival with overall survival a key secondary end point. We are conducting this study in collaboration with leading clinicians from the Gynecological Oncology Group, or GOG, in the United States and the European Network of Gynecological Oncology Trials, or ENGOT Group, in Europe and deeply appreciate their enthusiasm and support.

In anticipation of a successful outcome, Roberto Vieira has joined us as President of our Oncology division, and we have begun to make a number of other critical hires to ensure that we can move as quickly as possible following the conclusion of ROSELLA to bring relacorilant to the women who can benefit from it. We are also evaluating relacorilant as a treatment for prostate cancer and adrenal cancer by exploring 2 different mechanisms of action, leading academic researchers and clinicians hypothesize that cortisol modulation may block an important tumor growth pathway in prostate cancer.

Cortisol stimulation is thought to be a major reason why patients with prostate cancer treated with a widely prescribed androgen receptor antagonist, enzalutamide, eventually experience resurgent disease. Deprived of androgen stimulation, their tumor switched to cortisol activity to stimulate growth. Adding a cortisol modulator to androgen depravation therapy could close this tumor escape route. Our collaborators at the University of Chicago are currently enrolling a randomized placebo-controlled Phase II trial of relacorilant plus enzalutamide in patients with prostate cancer before these patients have had an initial prostatectomy.

In adrenal cancer, patients' tumors produce excess cortisol in about 50% of cases. Unfortunately, patients with this form of adrenal cancer virtually never respond to immunotherapy. Sadly, adrenal cancer usually progresses rapidly and is almost always a deadly disease. Because cortisol suppresses the immune system, it may blunt the effectiveness of cancer therapies intended to stimulate the immune system.

Our hypothesis is that adding a cortisol modulator to immunotherapy, such as checkpoint inhibitors, may enhance their effectiveness. We enrolled 14 patients with advanced adrenal cancer with tumors that produce excess cortisol in a Phase Ib trial of relacorilant plus the PD-1 checkpoint inhibitor, pembrolizumab. As hoped for, treatment with relacorilant produced an improvement in these patients' Cushing's syndrome and their quality of life. However, it did not result in an observed change in tumor progression in this end-stage group. We are evaluating next steps to further understand the role of cortisol modulation in combination with immunotherapies and this and other types of cancer.

Our research team has developed a library of more than 1,000 selective cortisol modulators with distinct pharmacodynamic properties. Some are more potent at modulating cortisol activity across many tissue types. Some are tissue specific. Some are very potent in oncologic models. Some less so. Some get into the brain. Some don't.

One of the compounds discovered by our scientists that is highly effective at getting into the brain is dazucorilant. We have advanced dazucorilant into clinical studies based on compelling data that showed improved motor performance and reduced neuroinflammation and muscular atrophy in a commonly used mouse model of ALS.

Our randomized double-blind placebo-controlled Phase II DAZALS trial of dazucorilant is fully enrolled and ongoing at clinical sites in Europe, the United States and Canada. 249 patients with ALS have been randomized to receive dazucorilant or placebo for 24 weeks. The primary end point utilizes the ALS Functional Rating Scale. We expect data by year-end.

Finally, I'll turn to our program in MASH, which stands for metabolic dysfunction-associated steatohepatitis. MASH is a serious liver disease that affects millions of patients in the United States. Cortisol modulation may serve as an effective treatment for MASH because cortisol activity has been implicated in both the initial development and progression of this disease.

Our Phase Ib dose-finding study of miricorilant found that patients who received 100 milligrams orally twice a week for 12 weeks experienced a 30% reduction in liver fat and improvements in liver enzymes, markers of fibrosis and key metabolic and lipid measures such as HOMA-IR, serum triglycerides and LDL. Importantly, miricorilant was also very well tolerated with no apparent GI side effects.

We hope to expand on these encouraging results with our randomized double-blind placebo-controlled Phase IIb MONARCH study. We are enrolling 2 cohorts in this study. The first cohort has a planned enrollment of 120 patients with biopsy-confirmed MASH, randomized 2:1 to receive either 100 milligrams of miricorilant twice weekly or placebo for 48 weeks.

The primary end point for this cohort of the MONARCH study is reduction in liver fat with mass resolution and fibrosis improvement as key secondary end points.

The second cohort has a planned enrollment of 75 patients with presumed MASH based on non-invasive diagnostic tests. Patients in this cohort will be randomized 2:1 to receive either 100 milligrams miricorilant twice weekly for 6 weeks, followed by 200 milligrams of miricorilant twice weekly for 18 weeks or placebo for 24 weeks. In this cohort, the primary end point is also reduction in liver fat.

This is an extremely exciting time at Corcept. We are rapidly approaching transformational milestones for the company and more important for patients in need. Our commercial business is strong and growing. The prevalence results from our CATALYST trial make it clear that there are far more patients with Cushing's syndrome than was previously assumed. The GRACE trial results demonstrate that we developed a clearly superior treatment for patients with Cushing's syndrome. By the end of this year, we expect data from our GRADIENT and CATALYST studies in Cushing's syndrome, our pivotal ROSELLA study in ovarian cancer and our DAZALS study in ALS.

Every employee at Corcept and the partners and collaborators with whom we work understands the significance of the work we do. Collectively, we are driven and guided by a sense of urgency to support patients with Cushing's syndrome and all of the other disorders where cortisol modulation can make a difference.

Operator, let's proceed now to questions.

[Operator]

[Operator Instructions] Our first question comes from the line of Matt Kaplan with Ladenburg.

[Matthew Kaplan, analyst]

And congrats on the strong quarterly results. Joe, you mentioned in your prepared remarks that the screening -- you've seen an increase in screening and treatment in terms of use of Korlym. I guess where are we in terms of the awareness of the prevalence of hypercortisolism in the endo community now and in terms of the increase in screening?

[Joseph K. Belanoff, executive]

Thank you, Matt, and good to hear from you. I really think we're just at the beginning of that. I think that the results that you're seeing in the second quarter really are not a function of what the results were released in the CATALYST study in late June. But in July, we certainly have started seeing a pickup in interest. I think that's going to continue through the year. And I think ultimately, the treatment portion of the CATALYST study will also be very meaningful. But the short answer to your question is I think we're really just at the beginning of that expansion.

[Matthew Kaplan, analyst]

Okay. That's helpful. And then just staying on Korlym for a moment. What are you seeing in terms of generic Korlym in the marketplace now?

[Joseph K. Belanoff, executive]

Okay. I'm going to pass you over just to reintroduce you to Sean Maduck, who is the President of our Endocrinology division.

[Sean Maduck, executive]

Matt, thank you for the question. I guess, I'll answer it 2 ways. The first question is what are you seeing in the marketplace. The Teva product has been available in the channel for many months. So it's out there, but it has had very little impact on our business.

[Matthew Kaplan, analyst]

Okay. Okay. And just one more question maybe before I jump back in the queue. I guess following the presentation of the GRACE open label and randomized withdrawal results at the recent conferences, what's been the feedback you've been getting from the endo community so far?

[Joseph K. Belanoff, executive]

Again, I'd like to introduce you -- reintroduce you to Bill Guyer, who is our Chief Development Officer. Bill?

[William Guyer, executive]

All right. Great. Thank you for that question. Well, the reception from investigators and clinicians has been outstanding, to be honest. They were excited about all of the relacorilant results because we have a positive study. So we hit our primary end point. But beyond that, we've seen that relacorilant hit almost every secondary and exploratory end point because we see a broad improvement across the broad range of signs and symptoms of Cushing's syndrome. And these positive results give clinicians insight into what they should expect in their patients.

And another key piece is that promise of what we had hoped to improve on the safety profile, and they take away that due to relacorilant's unique mechanism of action, the robust and broad efficacy was seen without relacorilant-induced AEs like hypokalemia, vaginal bleeding with endometrial thickening, no adrenal insufficiency and no Q2 prolongation. So when you put that package all together, the clinicians were very pleased to see that what we promised within relacorilant being unique and its selectivity has borne out to show that in the GRACE study.

[Matthew Kaplan, analyst]

Very helpful. And I guess maybe just one more, Bill, while I have you. I guess as we look forward to the DAZALS results, what would be a clinically meaningful change in the ALSFRS as we look to that?

[William Guyer, executive]

Yes. So in talking with ALS experts, we feel that the Functional Rating Scale -- the ALS Functional Rating Scale, we are powered to see 2.4 point difference in the Functional Rating Scale. And we believe that, that is, and [ federal ] investigators and clinicians, that's a clinically meaningful change in the ALS Functional Rating Scale. So we are powered to detect that difference, and it will be a clinically significant difference.

[Operator]

Our next question comes from the line of David Amsellem with Piper Sandler.

[David Amsellem, analyst]

So just had a few. First, regarding the Korlym AG, can you talk about your thought process for bringing an AG into the marketplace? And how does that play into your thinking regarding the potential for 1 or 2 more generic entrants, in other words, Sun or Hikma. Just wanted to get your thought process there on the AG. That's number one.

And then secondly, in terms of the new prescribers, are these coming from squarely in the endocrinology community or maybe adjacent to the endocrinology community, in other words, diabetologists? Or maybe a better way of asking is are you getting a lot of traction among diabetologists who historically have not prescribed the drug and have not screened for Cushing's. So that's number two.

And then lastly, as you think about the evolution of this space, with the prevalence being wider than what the community had thought it to be, how does that play into how you're thinking about the pricing of relacorilant? I know it might be early to ask that, but I think it's a fair question just given that the prevalence of this space and our understanding of it is evolving.

[Joseph K. Belanoff, executive]

Thank you, David, and thanks for those questions. I think all of them really fall right in Sean Maduck's house, so I'm going to pass it over to him.

[Sean Maduck, executive]

Yes. Thanks, David. So I'm going to try to break these down. That's a lot of questions together. So I may have to check in, but I think I covered it. So your first question was around the AG and sort of what drove our thinking around that. And the reality is, is that, over time, given the availability of a generic in the market, that payers may mandate that their patients receive a generic drug. And making the AG available allows us, of course, to ensure that these patients and their prescribing physicians have continuity care and are still able to access the robust patient support services and physician support services that we provide.

The second part of your question then was how does -- I believe you asked how does this influence what might happen with other potential generics entering the market. I can't speak to what their specific plans are, but I will remind everybody that Teva announced their launch on January 19. And by statute, any additional filer or any second filer can enter 6 months after the first filer have launched provided that they have FDA approval. And the earliest possible date was July 19 and that date has passed. And as far as we know, no -- neither Sun nor Hikma has FDA approval.

[ All right ]. The third part of the question was around new prescribers. And I guess, a widely distributed are those across specialties. And I can tell you that we've continued to promote broadly to endocrinologists and to other patients that we believe could be seeing patients with hypercortisolism within their practices. So we educate through our field force and through other initiatives, and we've seen new prescribers emerge in the diabetology space, the endocrinology space as well as others.

And then the last question was specifically about pricing. Can you please maybe restate what the specific question was around pricing?

[David Amsellem, analyst]

Yes, sure. And I apologize. I know it was mouthful. In terms of the pricing, just with this space having a wider prevalence, how does that impact how you're thinking about pricing of relacorilant. I guess what I'm trying to ask is pricing of relacorilant going to be somewhat below what you're seeing -- what the AG for Korlym is priced at or the brand. That's the most direct way I could ask it.

[Sean Maduck, executive]

That's a great question. Thank you. So right now, we expect that pricing will be roughly in line with Korlym. There are real arguments, however, that relacorilant could be priced at a premium to Korlym given its favorable efficacy and safety profile.

Now the crux of your question around the expansion of the population, I mean, we recognize that Korlym and on the future of relacorilant are high-priced drugs that's priced for right now a smaller patient population. We know that each market has a price threshold, though, and the market with 2,000 patients is obviously different than 1 with 20,000 or 200,000. The hypercortisolism market is definitely still growing. And when we know where we're at, our price will accurately reflect that market. And that's our social contract. That's something that we firmly believe.

[Operator]

Our next question comes from the line of RK with H.C. Wainwright.

[Swayampakula Ramakanth, analyst]

So just on the quarterly revenue growth, I'm just trying to understand, you said that some of the uptake that you -- we could think about coming from endo was actually happening in July. So going from where we are now, how should we think about the mix? And also, what are you taking into account when you're changing your guidance or you're upping in your guidance from where it was at the end of first quarter?

[Sean Maduck, executive]

Yes. Thank you for the question. This is Sean again. I think your question is related to sort of CATALYST and diabetologists. The reality is there's been very little to no impact from CATALYST in our year-to-date results, and we have included a modest benefit in our updated guidance. That said, I do think that the results presented at the ADA that Joe had highlighted are going to be increasingly meaningful over time, and then we could see more patients in the second half of the year than was initially expected.

When the results of the treatment arm of the study are available at the end of the year, I think a very meaningful change could take place. So we have all -- we've taken all those factors into accounts. We take many factors into account when we look at our range, and the range that we stated is our best [indiscernible].

[Operator]

Our next question comes from the line of Joon Lee with Truist.

[Joon Lee, analyst]

Congrats on the strong quarter. We have 2 questions. First is what's the reason for the delay in relacorilant NDA submission to 4Q and what's the rate limiting step for that submission. And then the second question is regarding the Phase IV CATALYST trial. How important is the outcome of the Part 2 in expanding the TAM, specifically regardless of the outcome of Part 2 in managing glucose levels, would the patients still need to be treated for hypercortisolism?

[Joseph K. Belanoff, executive]

I'll answer just the second question first if you wouldn't mind, Joon. The answer is that we think that is very meaningful that we think that the problem with these patients -- just to sort of back up, the average hemoglobin A1c in patients who entered the CATALYST study was 8.8 and these are treatment -- patients who are treated by, really in my estimation but many others, the best diabetologists in the country using the best medications, including many who are taking GLP-1s and so forth. These patients clearly have another problem. And in 1/4 of them, it's hypercortisolism. I mean that clearly is an issue for them.

Now I think the treatment study is very meaningful. I think the question -- and we have really high hopes and expectations it's going to do -- the medicine is going to do exactly what we think it's going to do. But I really do think that showing that these patients exist, which has really already shaken the heads of these diabetologists and showing there's really something you can do about it, I think it's going to be very, very meaningful.

I'm going to pass just to -- Charlie can speak here. Charlie Robb, who is our Head of Regulatory and Chief Business Officer, will answer your first question.

[Gary Robb, executive]

Joon, yes, the -- in the course of -- I want just to back -- I guess just to back up a little bit, any company including ours, as you're preparing to submit an NDA, in regular conversation with the FDA and a lot of information is exchanged things are discussed, and after that back and forth, we decided that to include data from our GRADIENT trial, which is, to remind everyone, is fully enrolled, and we'll have that data in the fourth quarter. But we decided to include that in the NDA submission. And that data will be available in the fourth quarter, so that's when we'll be able to submit the NDA. That's all there is to it.

[Joseph K. Belanoff, executive]

Thank you, Joon. All right. Well, listen, it's a late summer afternoon for everyone. Thank you for dialing in, and we will speak to you in a quarter.

[Operator]

Ladies and gentlemen, this concludes today's conference call. Thank you for your participation. You may now disconnect. Goodbye.