Corcept Therapeutics Inc

NASDAQ:CORT

Earnings Call Analysis

Corcept Posts Robust Q3 Growth, Raises 2023 Revenue Guide

In Q3 2023, Corcept Therapeutics' revenue surged by 22% to $123.6 million year-over-year, prompting an increase in the 2023 revenue guidance to $470 million - $480 million. Net income reached $31.4 million, with cash reserves amounting to $414.8 million. The company's legal battle with Teva Pharmaceuticals regarding Korlym's patents will likely extend until Q2 or Q3 2025. The primary driver of revenue growth, Korlym, is gaining traction due to expanding awareness of hypercortisolism. Corcept continues to invest in promising trials for diseases like Cushing's syndrome, prostate and adrenal cancers, ALS, and NASH. Impressive trial results have boosted confidence, with data from numerous Phase 3 and Phase 2 trials, including the pivotal ROSELLA ovarian cancer study, expected by the end of next year.

Revenue Growth and Financial Outlook

The company reported robust growth in the third quarter of 2023, with revenues reaching $123.6 million, marking a 22% increase compared to the same quarter of the previous year. Net income stood at $31.4 million, reflecting solid profitability. Buoyed by these strong results, they have raised their 2023 revenue guidance to a range of $470 million to $480 million, up from the previous forecast of $455 million to $470 million.

Legal Defense Against Generic Competition

A lawsuit against Teva Pharmaceuticals aims to protect the company's Korlym patents, with a trial having been conducted. The primary contention was over potential patent infringement by Teva's generic product. The matter is expected to reach a verdict in the first quarter of the next year, with potential appeals prolonging the resolution until possibly the second or third quarter of 2025.

Increasing Physician Awareness and Treatment Uptake

Increased physician awareness of hypercortisolism's impact and more common screening practices have driven up the prescription of Korlym, contributing to revenue growth. The medical community's acknowledgement of the undiagnosed patient population is expected to bolster the Cushing's syndrome business further. The company anticipates continued commercial growth from this trend.

Promising Clinical Development Programs

The company is enthusiastic about its portfolio of selective cortisol modulators, which are being assessed for a variety of disorders including cancers, ALS, and NASH. Clinical trials are ongoing, exploring different mechanisms in which these modulators could effectively treat various conditions while minimizing side effects.

Key Trial Updates and Regulatory Plans

In 2024, the company is slated to receive crucial data from multiple studies, including GRACE and GRADIENT for Cushing's syndrome, and ROSELLA for ovarian cancer. Additionally, a New Drug Application (NDA) for relacorilant in Cushing's syndrome is planned for submission. The company is also on pace to finish enrolling patients for the Phase 2b MONARCH study in NASH by the end of the year.

Advances in Ovarian Cancer Treatment

The cortisol modulator, relacorilant, has shown to enhance the effects of chemotherapy in patients with platinum-resistant ovarian cancer. The company aims to replicate these positive Phase 2 findings in the large-scale multinational Phase 3 ROSELLA trial, with results expected by the end of next year.

Exploring Additional Therapeutic Avenues

The company's research efforts are not confined to Cushing's syndrome and ovarian cancer. They are investigating cortisol modulation as a potential enhancement to androgen deprivation therapy in prostate cancer and to immunotherapies in advanced cancers. These studies could significantly improve the therapeutic landscape for these malignancies.

Promising ALS and NASH Trials

For ALS, dazucorilant, a selective cortisol modulator, is undergoing trials that are expected to provide data by the end of next year. Miricorilant, another modulator, has been well tolerated in NASH trials, with a large Phase 2b trial underway aiming to improve liver health in NASH patients.

Earnings Call Transcript 2023-Q3

[Operator]

Good day, and welcome to the Corcept Therapeutics conference call. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Atabak Mokari, CFO. Please go ahead.

[Atabak Mokari, executive]

Hello, everyone. Good afternoon, and thank you for joining. Today, we issued a press release announcing our financial results for the third 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 differ materially 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 and 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 third quarter of 2023 was $123.6 million, an increase of 22% compared to the third quarter of last year. We are raising our 2023 revenue guidance again to a range of $470 million to $480 million, up from $455 million to $470 million. Net income was $31.4 million or $0.28 per share in the third quarter. Our cash and investments at September 30 were $414.8 million, an increase of $51.5 million in the quarter. I will now turn the call over to Charlie Robb, our Chief Business Officer, to provide a legal update. Charlie?

[Gary Robb, executive]

Thanks, Atabak. In March 2018, we sued Teva Pharmaceuticals prevent it from marketing and generic version of Korlym in violation of our patents. This September 26 through 28, the case went Federal District Court in Camden, New Jersey. At trial, we asserted 2 patents against Teva, both of which concerned the co-administration of Korlym was a commonly prescribed class of medications known as strong SPIA inhibitors. Teva does not and cannot dispute the validity of our patents. That matter was settled in our favor by the post grant review proceeding, Teva have initiated and lost in 2019. Teva's only defense at trial, was to argue that their generic product would not infringe either of our patents. This was the sole issue infringement of either patents for the court.

With trial over, here is what will happen next. As is customary, each party has submitted a post-trial brief arguing that it should win given the applicable law in the facades trial. In about a week, we will each submit a short reply brief responding to the arguments and the primary briefs. These documents are publicly available at the government's Pacer website, that's Pacer P-A-C-E-R.

Once briefing is complete, the judge may or may not ask for oral argument. The vertical will follow, most likely in the first quarter of next year. Of course, the timing is entirely for discretion. The losing party is entitled to appeal any ever decision to the Federal Circuit Court of Appeals. Such an appeal will likely take between 12 and 18 months to complete. All in all, this dispute will likely not be completely resolved until the second or third quarter of 2025.

Those of you who have joined our prior calls have heard me say an increasingly emphatic that are confident in our case. I will say it again, we are confident in the strength of our case, supremely confident. We walked into court certain that belong the facts are on our side. We left even more certain that the law and the facts are on our side. We look forward to the judge's. I will now turn the call over to Joe Belanoff, our Chief Executive Officer. Joe?

[Joseph K. Belanoff, executive]

Thank you, Charlie. Our strong results in the third quarter reflect physicians increasing awareness of hypercortisolism and the harm it causes. A screening of our disease becomes more common, more physicians prescribe and more patients receive Korlym. This changing behavior has led to another record high in our quarterly revenue. We expect this trend in medical practice and with it, our commercial growth to continue. .

Korlym is an excellent treatment for patients with Cushing's syndrome and there are many eligible patients who have yet to receive it. Leading endocrinologists increasingly believe that there are considerably more patients with Cushing's syndrome than was once assumed. The results of our CATALYST study will likely provide further evidence to bolster this belief, which will in turn lead physicians to indensify and provide effective treatment for the large group of patients whose hypercortisolism currently goes undiagnosed and this advance in medical thinking our Cushing's syndrome business.

We are raising our 2023 revenue range again this time to $470 million to $480 million. We're also very excited by the potential of our clinical development programs. Since inception, our research and development efforts have built on the hypothesis, the cortisol modulation is a powerful therapeutic mechanism in many serious disorders. Our proprietary compounds modulate cortisol specs by binding to the glucocorticoid receptor or GR, the receptor which is activated and cortisol levels are high. They do not bind to the progesterone receptor and don't cost some of Korlym's our approved product, most serious off-target effects.

Interestingly, while all our compounds modulate cortisol activity, they produce distinct clinical effects some cross the blood brain barrier, others do not. Some perform best in models of solid tumors. Others are more potent models of metabolic disease. Some appear to be tissue specific, Others have more global events

These diverse qualities allow us to study a wide variety of disorders. Currently, we are conducting programs with 3 of our proprietary selective cortisol modulators, relacorilant, Dazaorland and miricorilant in ovarian, adrenal and prostate cancer ALS, NASH and, of course, Cushing's syndrome.

Additional compounds are in earlier stages of development. Important late-stage clinical development milestones are approaching. In 2024, we expect data from our Grace, GRADIENT, Catalyst, ROSELLA and DAZALS study. We also plan to submit an NDA for relacorilant syndrome and to complete enrollment of our Phase IIb MONARCH study in patients with NASH.

This is a very exciting time for Corcept. We are evaluating relacorilant for the treatment of hypercortisolism in 2 Phase III trials, GRACE and GRADIENT. Relacorilant is a selective cortisol modulator. Like Korlym, it achieves its effect by competing with cortisol at the glucocorticoid receptor.

Unlike Korlym, it does not bind to the progesterone receptor and so does not cause progesterone-related side effects. Relacorilant's Phase II efficacy and safety data were compelling. Patients experienced meaningful improvements in hypertension and glucose control as well as in the other signs and symptoms of Cushing's syndrome.

There were no relacorilant-induced instances of endometrial thickening or vaginal bleeding, progesterone-related side effects and no drug-induced hypokalemia, a leading cause of continuation. The Phase II trial results were published in New Journal Frontiers in endocrinology in July 2021.

We are focused on finishing our GRACE trial and preparing our NDA, which we plan to submit the second quarter of 2024. Relacorilant has tremendous promise as a treatment for patients with all ologies of endogenous Cushing's syndrome, and we are eager to make it available. Our second Phase III trial in hypercortisolism, GRADIENT is studying relacorilant effects in patients whose Cushing's syndrome is caused by an adrenal adenoma or adrenal hyperplasia.

Patients with this geology of Cushing syndrome often experience a less rapid decline, but their health outcomes are poor, including a significantly higher risk to premature death. While we do not expect our NDA in Cushing's syndrome to depend on data from GRADIANT, we do expect the study to produce valuable data about the treatment of etiology of Cushing’'s syndrome that affects many patients.

Our Phase IV CATALYST trial is the largest study ever conducted to establish the prevalence of hypercortisolism in patients with difficult to control diabetes. Many independent studies conducted over the last 15 years have found that the prevalence of hypercortisolism in patients with type 2 diabetes is substantially higher than in the general population.

The most prominent diabetologists in the United States helped us design and are participating in catalysts, which has the potential to become a landmark in guiding physicians' understanding of Cushing’ syndrome. We expect data from the prevalence phase of the CATALYST study early next year.

Our oncology program is testing 3 anticancer mechanisms, first postulated by investigators at the University of Chicago and later confirmed by other prominent researchers. One mechanism is increasing apoptisis the program cell death chemotherapy is meant to induce in solid tumors. Cortisol works against the beneficial effect of chemotherapy by suppressing. In our successful controlled Phase II trial in women with platinum-resistant ovarian cancer, the addition of our selective cortisol modulator relacorilant, enhance the effect of chemotherapy likely by blunting cortisol's anti-apoptotic effect.

Relacorilant provided a meaningful benefit to many of the women in our study. While these women's disease had progressed on 2 or more previous lines of treatment, including previous taxanes, relacorilant appear to resensitize their tumors to chemotherapy's beneficial effects. Those 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 intermittent relacorilant group also live longer than those of the comparator arm with a p-value that approached statistical significance. 29% of the patients who took intermittent relacorilant were alive 2 years after study start versus only 14% of those who took natpaclitaxel alone. Just as important, the women who received relacorilant plus nab-paclitaxel experienced no additional side effect burden compared to those who received nab-paclitaxel alone.

The results from this study were published in the Journal of Clinical Oncology in June of this year, results of have also been featured in podium presentations at the 2021 and 2022 European Society for Medical Oncology, ESMO meetings and at the 2022 American Society of Clinical Oncology, ASCO Annual Meeting.

ROSELLA, our pivotal multinational Phase III trial in platinum-resistant ovarian cancer is enrolling patients. ROSELLA's goal simply to replicate our positive Phase II results in a larger group. ROSELLA's designed closely tracks our Phase II study. Planned enrollment is 360 women randomized 1:1 to receive either relacorilant plus nab-paclitaxel or nab-paclitaxel alone.

The primary endpoint is progression-free survival with overall survival, a key secondary endpoint. We are conducting this study in collaboration with leading clinicians from the Gynecological Oncology Group in the United States and the Euro Network of Gynecological Oncology Trials Group in Europe.

We expect data by the end of next year. Leading gynecological oncologists have told us that relacorilant's potential benefit improved progression-free and overall survival without increased side effect burden. We constitute an important medical advance and the relacorilant plus nab-paclitaxel has the potential to become a new standard of care in women with platinum-resistant ovarian cancer.

A second mechanism by which cortisol modulation may prove useful is by blocking an important tumor growth pathway. Cortisol stimulation is a major reason why patients with prostate cancer treated with a widely prescribed androgen receptor antagonist enzalutamide, event experienced resurgent disease. The pride of androgen stimulation, their tumor switch to cortisol activity to stimulate -- our hypothesis is that adding a cortisol modulator to androgen deformation therapy will close this tumor escape route. Our collaborators at the University of Chicago have initiated a randomized placebo-controlled Phase II trial of relacorilant plus enzalutamide in patients with prostate cancer before these patients have had an initial prostatectomy. A third therapeutic mechanism seeks to treat tumors by enhancing the body's immune response. Cortisol suppresses the immune system, which may blunt the effectiveness of cancer therapies intended to stimulate the immune system.

Our hypothesis is that adding a cortisol modulator to immunotherapies such as checkpoint inhibitors, may enhance the effectiveness of those therapies. We are conducting a Phase Ib trial of relacorilant plus the PD-1 checkpoint inhibitor, pembrolizumab, in patients with advanced adrenal cancer whose tumors produce excess cortisol. Pembrolizumab is rarely affected as monotherapy in treating this form of adrenal cancer.

ALS, commonly known as disease is a devastating illness with an urgent need for better treatment. DAZALS, our 198-patient randomized double-blind placebo-controlled Phase II trial of dasicorilant in patients with ALS is enrolling patients briskly. Dazacorilan is a selective cortisol modulator that has shown great promise in animal models of ALS, improving motor performance and reducing neuroinflammation and muscular atrophy.

We are conducting this important study at sites in Europe and the United States. We expect data by the end of next year. Finally, I'll turn to our program in NASH, a serious liver disorder that afflicts millions of patients in the United States., an oral medication continues to demonstrate great promise as a treatment for NASH. In our prior NASH study, patients who received 600 milligrams or 900 milligrams of miricorilant daily exhibited large rapid reductions in liver fat, but also substantial albeit transient elevations of the liver enzymes, ALT and AST.

The improvement in liver fat in these patients was greater and occurred much more rapidly than we had expected and is rarely seen over any period of treatment. Our Phase Ib dose-finding study found that patients who received just 100 milligrams of miricorilant orally twice a week for 12 weeks experienced an approximately 30% reduction in liver fat and showed improvements in liver enzymes and markers of liver disease.

These patients also experienced improvements in key metabolic and lipid measures such as HOMA-IR, serum triglycerides and LDL. Importantly, miricorilant was very well tolerated with no apparent GI side effects. We will present these results at the upcoming AASLD meeting in Boston. We intend to build on the promising results of our Phase Ib study with our 150-patient randomized double-blind placebo-controlled Phase IIb MONARCH trial of miricorilant in patients with biopsy-confirmed NASH.

Since will receive either 100 milligrams of miricorilant or placebo twice weekly or 38 weeks. The primary endpoint is reduction in the liver fat with NASH resolution and fibrosis improvement as key secondary endpoints.

In conclusion, we are extremely optimistic about the future of cc. Our Kirstin syndrome business has tremendous growth potential and generate substantial profits even as we invest in our advancing development programs. We are again raising our 2023 revenue guidance and anticipate growth for years to come.

Data from our large CATALYST study will help physicians better identify and treat patients whose difficult to control diabetes is caused by hypercortisolism, a population whose Cushing's syndrome too frequently goes undiagnosed. Our development programs are generating increasing evidence that cortisol modulation has the potential to treat a wide range of diseases.

Cushing's syndrome, ovarian cancer, prostate cancer, ALS and NASH are current examples. There will be others. We have many more proprietary selective cortisol modulators in our portfolio with potentially very different clinical attributes. We will advance the most promising of these to the clinic. In 2024, we expect data from Grace, Gradient and CATALYST studies in Cushing's syndrome, our pivotal Rosella trial in ovarian cancer and our DASL study in ALS.

We expect to submit an NDA for relacorilant in CushING syndrome and to complete enrollment in our MONARCH Phase IIb study in NASH. As I have said, it is an exciting time for Corcept. Before we take questions, I want to take a moment to introduce the newest member of our executive team, Monica Toledo, whose first day at Corcept is today. Monica, as President of Emerging Markets, will be responsible for our newer therapeutic areas such as ALS and NASH. We look forward to her contributions. Monica, welcome to Corcept. Let's proceed now to questions.

[Operator]

Our first question comes from Matt Kaplan Ladenburg.

[Matthew Kaplan, analyst]

Congrats on a strong quarter. To delve into your pipeline a little bit and specifically in the midterm without that you have coming up in 2024. I guess specifically, First, can you talk a little bit more about the case study and the timing and endpoints down what you're looking to show in that pivotal study.

[Joseph K. Belanoff, executive]

Matt, I apologize. I really having trouble hearing your question, line isn't so good. Is it possible to either repeat it or call back in? .

[Matthew Kaplan, analyst]

A different way? Got better. .

[Joseph K. Belanoff, executive]

No, we're just not hearing you. I'm sorry. dial will .

[Operator]

Our next question comes from David Amsellem with Piper Sandler.

[David Amsellem, analyst]

I hope you can hear me well. So good. So a couple of questions. First, can you provide specifics on a year-over-year volume growth for Korlym? That's number one. And then I guess as part of that question, my understanding is third quarter last year was was somewhat weaker. So potentially, we're looking at more favorable year-over-year comps. So just talk about the volume growth dynamics I know there was also a pricing action earlier this year. Just -- so just help us understand the -- what was volume, what was price? And then in terms of your comments on screen for hypercortisolism and greater diagnosis and treatment starts. What does that mean going forward? I know you're not in a position to guide for '24, but is what we're seeing this seeming inflection. Is that something that you're looking at as sustainable?

[Joseph K. Belanoff, executive]

Okay. Thank you, David. I think we've got both of those questions. I first want to introduce everyone everyone to Sean Maduck, who is the President of our endocrinology division, and he can address your first question.

[Sean Maduck, executive]

David, thank you for the question. So in terms of year-on-year growth, we had 22% growth, 12% of that was driven by volume and 9% was driven by price. And I think your next question was sort of the sustainability through Q4. I mean that's built into our range. We expected the growth we experienced in Q3, and we expect that growth to continue for many quarters. We had more new physicians at existing physicians prescribed Korlym for patients across the country, and that's what drove our increased guidance range and the revenue

[Joseph K. Belanoff, executive]

Yes. And David, as a general answer to your second question, I think what we're really seeing out of the world is the recognition that hypercortisolism is considerably more common than I think people want to assume. While it's not -- they're not 1 million people at hypercortisolism, it's not the ultra-rare disease that people once thought it was. .

So we actually think that this expansion because of really screening is going to continue for a substantial period of time -- some of those patients will eventually fall to Korlym. Others will be treated in different ways. But the idea that this is an important medical therapeutic area that has really been under addressed, I think, has been an acceleration.

[Matthew Kaplan, analyst]

That's helpful. If I may sneak in a quick follow-up. In terms of the new starts and just the growth, are you getting a good chunk of that growth from physicians who are new to Korlym treatment?

[Joseph K. Belanoff, executive]

I'm going to pass you back to Sean. .

[Sean Maduck, executive]

Yes. Thank you for the questions. We're getting a mix of both the new prescribers every single month. every single quarter, and we also have business positions that have previously prescribed Korlym prescribed again for many subsequent patients potentially. So the short answer is yes, across both groups.

[Operator]

Our next question comes from Matt Kaplan with Ladenburg.

[Matthew Kaplan, analyst]

Can you hear me now?

[Joseph K. Belanoff, executive]

Much better.

[Matthew Kaplan, analyst]

Thank you, Matt. Great. Great. Great. Yes. So first off, congrats on a very strong quarter. I just wanted to Just wanted to focus a little bit on your pipeline. Obviously, 2024 is going to be a significant year for you guys with a lot of data readouts. And just in terms of the near-term readouts, can you give us a little bit more color on the GRACE study and what you're looking to show there, primary endpoint and, I guess, results should be potentially available in the first quarter given your desire to file an NDA in the second quarter.

[Joseph K. Belanoff, executive]

Thanks, Matt. We've heard all of that. I'm going to reintroduce the group to Bill Guyer or Bill runs all of our development programs he can answer your specific question.

[William Guyer, executive]

Great. Thanks, Matt. So let me remind you, the GRACE trial is that is an ongoing study with 2 parts in it. It's basically 2 studies in 1. The first part is the open label part of the study, where we're evaluating escalation of dosing from 100 milligrams up to the maximum dose of 400 milligrams. And for those who meet first criteria for diabetes and/or hypertension, both then get into the randomized withdrawal study, which is our primary endpoint of that study. We're going to share as you put it, top line results and overall results when there is material information within the first half of the year as we progress towards our NDA. When you think of a success, the success for this program would be treating patients with Cushing's suburban seeing their Cushing's syndrome improve dramatically.

I mean we're really treating very sick patients with Christine syndrome in the BRACE trial. -- and relacorilant is a key in that treatment because it modifies the underlying disease of Cushing's syndrome. -- success when you look at the primary endpoint would be to evaluate those patients who respond to relacorilant. And when they go into the randomized withdrawal part, they get switched to either staying on relacorilant or switching to placebo. And so we're evaluating the maintenance of their response to hypertension and or diabetes control. we're losing that response, and that's what we're going to be evaluating.

[Matthew Kaplan, analyst]

Okay. That's very helpful. And then if you could a little bit more color in terms of the data that you're expecting from the first part of the study where you're taking a look at the catalyst in terms of the prevalence what should you -- what should we be expecting as you announce the prevalence results in the first quarter?

[Operator]

Sure. Thank you for that second question. The goal for the CATALYST trial is pretty simple. It's to replicate and confirm the research from the past 15 years from publications of cohort studies, showing the patients with difficult to control diabetes we'll have a positive dexamethasone suppression test, and what we call a DST with a prevalence in the range of approximately 10% to 20%. And -- and so right now, we're well within that range for the CATALYST study. We look to complete that study by the end of this quarter and publicize that within the first quarter of next year.

[Unknown Attendee]

Our next question comes from Roanna Ruiz with Leerink.

[Roanna Clarissa Ruiz, analyst]

So first question. Curious if you could update us about your -- or remind us about your IP expectations for Korlym and relacorilant and endogenous Cushing. I was just curious if there are any implications that we should think about with the recent developments with your litigation with Teva there?

[Joseph K. Belanoff, executive]

Yes, I'm going to pass you back to Charlie Robb, who really is responsible for all of our legal legal issues. .

[Gary Robb, executive]

Yes. I guess I'll sort of take it into 2 parts, obviously. Our -- because our IP protections for Korlym and for relacorilant are really completely separate. As far as the developments go with respect to , as I mentioned, we had the trial at the end of September. And I really want to stress that there, the patents we are defending, we are asserting against Teva, really concerned the co-administration of Korlym with it really broadly prescribed class of drugs that are important drugs for everyone but also are commonly prescribed in patients with Cushing's syndrome. So the trial, I think, went very well. I think we made exactly the case we needed to make. And so in terms of commentary on our Orla IP, I feel very good about it. I think we've -- we brought it out into court, it performed very well, and I'm confident that it's now in the hands of the judge. .

That IP runs through 2027. So those 2 patents and there will or maybe further patents that come out of our work in the coming months and years with respect to Korlym. But right now, were protected through 2037. Now religions a novel proprietary compound unlike Korlym, which is the active ingredient is a generic compound. And so with respect to relacorilant, we have patents on its composition of matter. We have patents for a variety of uses for the compound and for sister compounds and a range of disorders, including the ones that we're studying now. And that protection runs past 24 -- so we have, I think, extremely robust sort of multilayered sort of piece surrounding relacorilant and there will be more being developed as our investigations continue to make new inventions that are worthy of path protection. So I hope that answers your question.

[Roanna Clarissa Ruiz, analyst]

Yes, that helps. And then a second 1 I had just tagging on about the GRACE trial reading out soon. I was just curious if you could explain what the statistical powering is for the endpoint there? And anything else we should think about in the data?

[Joseph K. Belanoff, executive]

Sure. I'll answer that question. So the distal powering is to look at the loss of response. We have 90% power to detect a loss of response of about a 50% difference between staying on relacorilant and maintaining that response or switching to placebo and losing their response.

[Operator]

our next question comes from June Lee with Linus Open.

[Unknown Analyst]

Congrats on the strong quarter. I have a question on timing of the NDA submission in the second quarter of next year. What do you want to wait for the GRADIENT study by midyear to submit more fuller picture of the drug? What's the rush there? And would the FDA want to see it? And the other question is what are the drivers of coal and franchise that keeps surprising you to the upside?

[Joseph K. Belanoff, executive]

Okay. 2 different questions. Let me -- give you first to Charlie for the NDA question.

[Leon Wang, analyst]

So yes, we're -- we I think that the most important demonstrator of embracive safety and for relacorilant safety and efficacy in Cushing syndrome will be the GRACE trial. We think that's sufficient to support our NDA. And so we're going to go with that. because it will be ready and ready first, ready to proceed and just continue to move our business forward as expeditiously as possible. We will be in a position just procedurally to submitting additional data to the FDA as gradient comes in, if that's important to pressing the NDA forward. So I think we retain some real optionality there without having to sacrifice the pace of our time lines.

[Atabak Mokari, executive]

And June, second question, would you please repeat that?

[Unknown Executive]

Yes, yes. So what are the drivers of that keep surprising you to the upside, you guidance, I think, 2 quarters in a row, not I'm not mistaken. So just curious what's the driver of that?

[Joseph K. Belanoff, executive]

Good. No, I understand the question, and I'm going to pass it back to Sean.

[Sean Maduck, executive]

Yes, June. Thank you for the question. I mean these results have been expected given this is where we have been investing. And in the past, I've talked a little bit about some of the initiatives we've been investing in to grow our business. And I thought I'd take a minute to update everybody on where those are at now. Before I do that though, I want to highlight, I think, an important fact. And that said, we have a very clear understanding now more so than in the past, but this is a multibillion-dollar market opportunity and the investments that we have made to grow our business and we will continue to make are highly leveraged, and we expect that they will both capture the opportunity and then yield a higher rate of return. So from an initiative standpoint, which is what we're talking about, there's 3 that we previously discussed on calls, the first being the expansion of our sales force -- the second is the increased effectiveness of that team. And then the third being the initiation of the CATALYST study, which Bill just spoke about.

Now in terms of the sales force and the size of that team, we're currently in the mid-60s, and we are continuing to add clinical specialists throughout the country. Our target right now is about 75, but we're unlikely to stop there, and we're going to continue to add top sales talent as we find it. And so part of the driver of the result is seeing that our -- both our existing clinical specialists and some of our newer clinical spaces that are starting to become more effective and produce more. The second initiative really has been around that productivity driver. And what we've done is strengthen and streamline our training program with the goal to do what I just touched on, make our existing people more effective and make our newer hires more effective more quickly.

And again, we're starting to see results from that effort. So the last piece is from an investment standpoint is CATALYST. Bill just talked through the historical studies in the 10% to 20% range. But what I want everyone listening to recognize is that catalyst is going to be the largest prospective study with Dubois group. And I believe personally and others do as well, that it will be the definitive study for this patient population, that's really going to cement these these findings from the studies that came before it. Now if we can replicate that 10% to 20% prevalence rate, it is going to be an extremely meaningful driver for our business. You have to recognize that there are still many physicians out there that think the prevalence in this patient population is near zero. So our growth today has been driven by slowly educating physicians to both screen and look for this disease. But we expect that with the addition of that data, we'll see that continue to evolve. So -- in summary, we have a lot of different initiatives in play, but we're at the very early stages of seeing the value from those. Many of them are just getting going, and we expect to see growth not just through the rest of this year but into 2024 and beyond.

[Unknown Analyst]

I'm looking forward to of the catalyst.

[Joseph K. Belanoff, executive]

All right. Well, listen, thank you all for tuning in this quarter. Happy day after Halloween. And we look forward to seeing you in 3 months with really progress once again bye now.

[Operator]

Thank you for your participation in today's conference. This does conclude the program. You may now disconnect.