Crinetics Pharmaceuticals Inc

NASDAQ:CRNX

Earnings Call Analysis

Crinetics Showcases Positive Results and Financial Health

In the second quarter of 2024, Crinetics Pharmaceuticals shared promising Phase II data for atumelnant in congenital adrenal hyperplasia and Cushing's disease, and progress on paltusotine's PATHFNDR Phase III acromegaly program. Financially, Crinetics remains robust with $863 million in cash and investments, enough to plan operations into 2028. Research and development expenses rose to $58.3 million from $40.6 million a year ago, while general and administrative expenses increased to $24.8 million from $13.3 million. A net loss of $74.1 million was reported compared to last year's $51 million. The company aims for a 2025 paltusotine launch.

Pivotal Advancements in Clinical Development

Crinetics Pharmaceuticals experienced substantial progress in the second quarter of 2024, particularly in the development of its leading candidate, paltusotine. Highly encouraging data from the Phase II trials of atumelnant in congenital adrenal hyperplasia (CAH) and Cushing's disease were presented at the Endocrine Society Annual Meeting. This excited confidence in atumelnant being a first-in-class treatment. The company has also set a clear path towards regulatory milestones with the filing of the paltusotine New Drug Application (NDA) for acromegaly set for 2024, marking a significant potential revenue stream.

Financial Positioned With Strong Liquidity

Crinetics reported a net loss of $74.1 million for the quarter, which is a significant increase compared to the $51 million loss the previous year. Despite the losses, the company ended the period with approximately $863 million in cash and investments, a solid buffer expected to sustain operations until 2028. The company anticipates ongoing cash burn of about $50 million to $60 million per quarter for the rest of the year, highlighting the need for continuous investment in its pipeline.

Market Positioning and Commercial Readiness

Crinetics is strategically positioning itself to disrupt the acromegaly treatment landscape, which has not seen any new oral therapies in over a decade. The commercial strategy hinges on three pillars: collaboration with healthcare practitioners, empowering patient advocacy, and streamlining access to therapies. Initial discussions with major payers have yielded positive feedback. The company is poised to leverage current trends to capture market interest, particularly with paltusotine's differentiation as a convenient oral treatment.

Clinical Pipeline and Future Potential

Looking ahead, Crinetics is focused on transitioning multiple drug candidates into clinical development, including a candidate for hyperparathyroidism and an SST3 agonist for treating autosomal dominant polycystic kidney disease (ADPKD). The company’s proactive steps in health economics studies bolster its strategy to enhance paltusotine’s value proposition in acromegaly treatment. Furthermore, the Company expects to initiate Phase III trials for carcinoid syndrome by the end of 2024, marking another potential growth area.

Building Relationships for Patient Access

To ensure the successful market entry of paltusotine, Crinetics is enhancing its connectivity with medical professionals and patient communities, recognizing the need for awareness about acromegaly’s burden. Engaging with over 1,500 healthcare providers through campaigns like acromegalytruth.com reflects the company's commitment to patient-centered care, which could drive prescriber support and patient demand for paltusotine upon its launch.

Challenges and Risks

Despite the excitement surrounding its pipeline and potential for commercial success, Crinetics faces challenges, particularly the ongoing losses. With a substantial burn rate, investors should monitor how cash reserves are managed. Furthermore, external factors such as pricing strategies and competition upon launch will significantly influence revenue outcomes. Any delays in regulatory approvals could also impact the company’s financial health and market reputation.

Earnings Call Transcript 2024-Q2

[Operator]

Good day, everyone, and welcome to the Crinetics Pharmaceuticals Second Quarter 2024 Earnings Conference Call. [Operator Instructions] Please note, this call may be recorded. [Operator Instructions] It is now my pleasure to turn the program over to Gayathri Diwakar.

[Unknown Executive]

Thank you, operator. Hello, everyone, and welcome to Crinetics Earnings Call. Joining me today are Dr. Scott Struthers, Founder and Chief Executive Officer; Dr. Dana Pizzuti, Chief Medical and Development Officer; Jim Hassard, Chief Commercial Officer; and Marc Wilson, Chief Financial Officer. Also joining us for the Q&A portion of the call is Dr. Alan Krasner, Chief Endocrinologist.

Our press release announcing the second quarter 2024 financial results was issued today and is also available on our corporate website. We will be using slides for today's presentation, which can be viewed on the Investor Relations section of the Crinetics website. As a reminder, we'll be making forward-looking statements, and I invite you to learn more about the risks and uncertainties associated with these statements as disclosed in our SEC filings. Such forward-looking statements are not a guarantee of performance, and the company's actual results could differ materially from those stated or implied in such statements due to risks and uncertainties associated with the company's business.

These forward-looking statements are qualified in their entirety by the cautionary statements contained in today's news release, the company's other news releases and Crinetics SEC filings, including its annual report on Form 10-K. I would also like to specify that the content of this conference call contains time-sensitive information that is accurate only as of the date of this live broadcast, August 8, 2024. Crinetics takes no obligation to revise or update any forward-looking statements to such events or circumstances after the date of this conference call.

With that, I'll hand the call over to Scott.

[R. Struthers, executive]

Thank you, Gayatri. Good afternoon, everyone, and thank you for joining us on our second quarter 2024 results call. I'll begin by spending a few moments summarizing our recent accomplishments. Then I will hand the call over to Dr. Dana Pizzuti, our Chief Medical and Development Officer, who'll provide a regulatory update. Jim Hassard, our Chief Commercial Officer, will share our plans to bring our lead candidate paltusotine to patients; and Marc Wilson, our Chief Financial Officer, will wrap up with a thrilling financial update. .

The second quarter of 2024 was extremely productive for Crinetics. The Endocrine Society Annual Meeting in June proved to be an impactful meeting for us. We were thrilled to share highly encouraging initial results from the ongoing Phase II studies of our second development candidate atumelnant in both congenital adrenal hyperplasia and Cushing's disease. These unprecedented data were very well received by the endocrinology community. This reinforced our already strong confidence in the potential of atumelnant to be a best-in-class and first-in-class agent in both indications.

Patients need better therapeutic options, and we are committed to realizing atumelnant's full potential as a revolutionary new treatment paradigm for people suffering from CAH and Cushing's disease. Crinetics team is working hard to move development of atumelnant[indiscernible] in both indications and bring this potential therapy to people around the world. We also presented data from paltusotine's PATHFNDR Phase III acromegaly program at Endo. The new analysis from PATHFNDR-1 highlights results -- highlighted results from an exploratory analysis using patient-reported outcomes captured in the acromegaly symptom diary or ASD. These data showed that patients on monthly standard-of-care injections were defined as biochemically controlled, actually experienced variability in system control.

In contrast, once-daily paltustine treatment was associated with stable biochemical control and low rates of breakthrough symptoms. Dana and Jim will speak more on our progress of bringing paltusotine to patients, but I'm incredibly excited about its potential to transform the future of acromegaly treatment and define a new standard of care. Overall, our 2024 plans remain on track. Our next steps this year include filing the paltusotine NDA for acromegaly, engaging with regulators to align on the initiation of a Phase III program in carcinide syndrome, completing the Phase II studies of atumelnant in CAH and Cushing's and transitioning multiple new drug candidates from our discovery efforts into preclinical and IND-enabling development.

Along these lines, we've continued to make meaningful progress on our early-stage pipeline. First, we've identified a parathyroid hormone or PTH receptor antagonist development candidate for our hyperparathyroidism program. Preclinical data demonstrates that this candidate reduces both PTH and PTH-related protein-induced hypercalcemia in rodent models and it possesses a favorable drug-like profile. This profile is likely consistent with once per day dosing in humans. We've begun IND-enabling studies and anticipate filing an IND in 2025. We've also selected an SST3 agonist development candidate to explore a completely new mechanism for the treatment of autosomal dominant polycystic kidney disease, or ADPKD.

ADPKD is one of the most common genetic diseases and affects over 140,000 people in the U.S. Preclinical data for this candidate are very promising, and we are pursuing options to advance this program to clinical studies, either with a partner or independently. Our discovery programs for Graves' disease -- discovery program for Graves' disease, including thyroid eye disease and obesity, continue to make great progress, and we look forward to announcing optimized candidates for these programs in the near future.

As a reminder, our pipeline also includes novel molecules and technologies that are being developed by our partners. For example, several years ago, we developed a novel non-peptide radiotheranostics program that could be used in multiple oncology indications. With this, we created a company around the technology called Radionetics Oncology and entered into a collaboration and license agreement with the company. Radionetics announced on July 1 that it entered into a strategic relationship with Eli Lilly and Company. Under the terms of the agreement, Radionetics received $140 million upfront and Lilly obtained a warrant for the exclusive right to purchase Radionetics for $1 billion.

Crinetics currently owns approximately 25% of Radionetics. If Lilly were to exercise its right to purchase Radionetics, Crinetics would receive its pro rata share of the $1 billion purchase price. Crinetics is also entitled to single-digit royalties and commercialization milestones for the 3 programs currently in development at Radionetics. We believe this transaction is a great validation of the strength of our discovery platform and has the potential to generate nondilutive funding for Crinetics in the future. We also have a partnership with [indiscernible] in which we licensed another one of our targeted somatostatin molecules to extend the lifespan and health span of dogs. The company -- the entire company is hard at work executing our strategy to help more patients with endocrine-related diseases and to build long-term value for Crinetics shareholders.

Lastly, as you may have seen in our press release, Marc, our Chief Financial Officer, will be leaving the company for personal reasons. The Crinetics executive team and Board are grateful for Marc's contributions to the company as he has been an invaluable member of the Crinetics team since before the IPO. His leadership was instrumental in the success of all our public market activities, which we have -- which have put Crinetics on a strong financial footing. We've initiated a search for a successor, and Marc will remain in his current position until a successor is onboarded to ensure a seamless transition.

With that, I'll hand it over to Dr. Dana Pizzuti, to discuss our clinical and regulatory progress in more detail. Dan?

[Dana Pizzuti, executive]

Thank you, Scott. I'll start with our lead candidate paltusotine. As Scot just mentioned, we remain on track to submit our NDA for paltusotine in its first indication acromegaly this year. As we have discussed, the Phase III PATHFNDR program was designed to evaluate the safety and efficacy of paltusotine for the treatment of a broad spectrum of patients with acromegaly. Based on the success of both Phase III PATHFNDR studies, we intend to seek approval for all patients, including those switching from the standard of care injected SRLs to paltusotine as studied in PATHFNDR-1 and those who are not currently treated as studies in PATHFNDR-2.

In parallel with our Phase III program, we have laid the foundation to streamline and accelerate the NDA filing. We have held 2 productive pre-NDA interactions with the FDA to align on clinical, nonclinical, CMC and quality topics. The FDA confirmed that our proposed package support submission for both the treatment and maintenance of acromegaly. This robust package includes data from our 2 PATHFNDR Phase III studies as well as dose-response analysis, data from our long-term safety studies and patient outcomes from the acromegaly symptom diary, which showed significant improvements in patient-reported symptoms in both of our studies.

We look forward to updating you as we continue towards the NDA filing. In addition, we are diligently conducting health economics and outcome studies to further demonstrate the value proposition of paltusotine in acromegaly. This work supports the commercial team's efforts as they engage with payers, physicians and patients. We are also making progress in paltusotine's second indication carcinoid syndrome. As previously reported, our Phase II study showed highly statistically significant results demonstrating the potential of paltusotine to treat people living with carcinoid syndrome.

Importantly, the patients who elected to participate in the ongoing, open-label extension continue to benefit from paltusotine. Building on this success, we are preparing to discuss the Phase II results with the FDA and align on the design of a Phase III protocol. We expect to initiate the Phase III trial by the end of 2024. Turning now to atumelnant, we are excited about the progress and potential of atumelnant in both CAH and Cushing's disease. As Scott mentioned, the initial results from the open-label Phase II studies, which were featured at Endo have exceeded our expectations.

The 3 cohorts evaluating different doses of atumelnant in the CAH Phase II study are now fully enrolled. We anticipate additional data will be available this year, and we are excited to advance this program. We also expect to share additional data from the ongoing study in ACTH-dependent Cushing's syndrome later this year. Crinetics is fundamentally committed to placing patients at the forefront of everything we do. This patient-centric approach is deeply ingrained in the development activities for each of the programs in our pipeline. We actively seek patient input throughout the drug development process. We've gained valuable insights by sharing data with patients, particularly from our acromegaly program. These insights validate our commitment to developing treatments that improve patients' quality of life, such as offering convenient dosing regimens. We have also routinely partnered with patient advocacy groups to obtain patient input on clinical trial design. Patients are enthusiastic about the potential of paltusotine recognizing that it not only delivers the desired biochemical control but can also improve the symptom of the burden associated with their condition.

We invested considerable effort to develop the acromegaly symptom diary and are supporting that with psychometric analysis to help document the impact of paltusotine on patients' quality of life. The positive feedback we have received so far indicates that our patient-focused approach will help us develop better therapies that make a meaningful difference to patients. I'll now hand the call over to Jim to review commercial readiness strategy and current progress.

[James Hassard, executive]

Thank you, Dana. For many years, Crinetics has been a committed member of the endocrinology community. We participated in many medical conferences and learned from countless listening sessions with both patients and health care providers alike. We're now on the verge of filing the paltusotine NDA, an opportunity to establish a new standard of care in the treatment of acromegaly for patients, health care practitioners and payers. Acromegaly is the first indication for paltusotine. Our launch preparation activities are laying the foundation of a fully integrated organization that can be leveraged for future indications, including carcinoid syndrome as well as other drug candidates in our pipeline.

Our overarching strategy is to disrupt the established acromegaly marketplace, which has not seen any new molecules in over a decade. We are bringing a clinically differentiated, once-daily oral medication to market with our commercial infrastructure and differentiated support services. Our commercial strategy is guided by 3 underlying pillars. First, extending Crinetics partnership with health care practitioners; second, empowering patients; and third, streamlining access to therapy. The first pillar is extending our partnership with the endocrinology community. We will be launching into a concentrated prescriber base of approximately 200 health care practitioners who are responsible for the vast majority of prescriptions.

These providers can be reached with a small sales force of approximately 25 to 30 sales representatives, in conjunction with other activities across the organization, including medical affairs. As we deepen our relationships with prescribers, we are building awareness of the patient experience and burden associated with the current standard of care. We've conducted multiple lines of market research, and one common theme is a disconnect between what physicians perceive and what their patients actually experience. For example, we found that endocrinologists believe 2/3 of their acromegaly patients on pharmacotherapy are well-controlled, biochemically and symptomatically.

However, in our patient surveys, we found that 79% of acromegaly patients report breakthrough symptoms. Now these are symptoms that often reemerge toward the end of their monthly treatment cycle. Patients have indicated that the treatment burden and breakthrough symptoms can be detrimental to their lives, but patients may not mention this during their physician appointments. So if doctors aren't asking and patients aren't volunteering this information, the disconnect is not being addressed.

Health care practitioners are always seeking the best treatment for their patients. And today, they don't always have complete visibility into their patients' experience. We at Crinetics are dedicated to providing an option that addresses the limitations of the current standard of care. We want to bridge the frequent disconnect and dialogue and help health care practitioners become more aware of the patient experience, including the pain and challenges associated with intramuscular and deep subcutaneous injections and the breakthrough symptoms that can occur at the end of the somatostatin receptor ligand injection cycle.

We believe paltusotine may provide a better treatment option for patients as it was designed to address the limitations of today's standard of care. Our commercial team has recently launched acromegalytruth.com, our disease awareness campaign for endocrinologists treating patients with acromegaly, which you can see on Slide 7. More than 1,500 providers have already interacted with this site so far. Acromegalytruth.com includes perspectives from patients on injectable SRLs, including injection site reactions, GI side effects, breakthrough symptoms and emotional impact of treatment.

In addition, we believe that positive data from the acromegaly symptom diary, which was one of the secondary endpoints used in the PATHFNDR Phase III program will help health care practitioners understand the clinical benefits of paltusotine, which go well beyond biochemical control. In fact, we have already shared some of this data from the acromegaly symptom diary at Endo this past June. We hope this data will help physicians understand the potential transformative impact of paltusotine for their patients.

We already have strong relationships with academic key opinion leaders in the pituitary treatment centers. As another example of our commercial execution, we are looking to expand our relationship with endocrinologists in the community setting. To that end, we've assembled an initial team of thought leader liaisons who are in the field deepening our relationships with clinical endocrinologists who are managing patients day in and day out. The second pillar of our commercial plan is empowering patients to ask for better care and improved control of their symptoms.

We recognize the vital role patients play in advocating for their diagnosis, managing their disease and seeking optimal treatment. To this end, we plan to launch next year an expanded disease awareness campaign targeted towards patients with acromegaly. The goal is to help patients realize that better control of their acromegaly symptoms and the lower treatment burden may be possible. Ultimately, we want to empower patients to ask their health care practitioner for paltusotine once approved. As Dana mentioned, our patient advocacy team has been engaging with the acromegaly patient organizations since early in clinical development. We are continuing to strengthen our relationship with the patient community to ensure we are addressing the needs of patients.

The third pillar of our commercial plan is to ensure optimal patient access to our best-in-class therapy. The national account team responsible for all payer interactions is in place and onboarded. We have had discussions with the top commercial and government payers covering the majority of lives in the country and initial feedback from those payer advisory meetings has been encouraging. We are finalizing a highly differentiated patient support center to help streamline the prescribing, dispensing and reimbursement process. This support center is being designed based on our ongoing market research and discussions with patients to develop best practices and close the gaps in the current reimbursement processes. We have also finalized our distribution channel. We look forward to sharing more details at our next earnings call.

In addition to establishing the commercial foundation for a successful launch, our medical affairs team is engaging in robust scientific discussions throughout the medical community. We've hired Dr. [ Bob Cathie ], an experienced endocrinologist who has dedicated much of his career to treating patients, including those with acromegaly and has built and led medical affairs functions at other organizations such as Janssen, Sanofi and Amgen.

In conclusion, Crinetics continues our evolution to ensure that we are in the best position to execute our launch strategy following approval. The paltusotine data that have been generated to date puts us in a unique position to demonstrate a highly differentiated clinical profile across multiple dimensions, including biochemical control, symptom control, tolerability and the overall patient experience. We know what is important to patients, to the physicians who treat them and to the health care system.

And we believe in the value proposition of paltusotine, which serves each of these constituencies well. Over the coming months, leading up to the expected launch in 2025, we will continue to implement our commercial strategy and share updates along the way. I believe in the transformative potential of paltusotine for patients with acromegaly and I'm excited to be leading our commercial team to launch this therapy. We are laying the foundation for a fully integrated pharmaceutical company that will be prepared for future paltusotine indications as well as other products in the Crinetics pipeline.

With that, I will now hand it over to Marc to review the financials.

[Marc J. Wilson, executive]

Thank you, Jim. As Scott mentioned, I will be stepping down from my role as CFO at Crinetics for personal reasons. Crinetics is in very capable hands with its deep bench of leaders across the organization. I am proud of all we have accomplished during my tenure and I look forward to the company's continued success as it evolves into a fully integrated endocrinology franchise.

With that, I'll now review the second quarter financial results. Crinetics continues to be in a strong financial position, having ended the second quarter with approximately $863 million in cash and investments. Our solid financial foundation is projected to fund our current operating plan into 2028. This includes plans to commercialize paltusotine for acromegaly, the initiation of multiple later-stage clinical trials in additional indications with paltusotine and atumelnant as well as continued investment in our pipeline.

With respect to the second quarter financial results, research and development expenses were $58.3 million for the quarter ended June 30, 2024 compared to $40.6 million for the same period in 2023. The increase was primarily attributable to higher personnel costs and manufacturing and development activities, both of which were driven by the advancement of our clinical programs and the expansion of our preclinical portfolio.

For the quarter ended June 30, 2024, general and administrative expenses were $24.8 million compared to $13.3 million for the same period in 2023. The change was primarily due to an increase in personnel costs and an increase in outside services as we continue to build the infrastructure to support our growing pipeline. Net loss for the quarter ended June 30, 2024, was $74.1 million compared to a net loss of $51 million for the same period in 2023.

Revenues were $0.4 million for the quarter ended June 30 compared to $1 million for the same period in 2023. Revenues during the current year's quarter were derived from the paltusotine licensing arrangement with our Japanese partner, SKK, Net cash used for operating activities for the quarter ended June 30, 2024, was $45.6 million. We expect our cash burn to be approximately $50 million to $60 million per quarter for the remainder of 2024.

I will now hand it back to Scott for closing remarks before we begin Q&A.

[R. Struthers, executive]

Thank you, Marc. Looking to the rest of 2024 and '25, we'll continue to build on the strong progress to date. We look forward to upcoming clinical and regulatory milestones from paltusotine and atumelnant and continued advancement of our deep pipeline of emerging candidates. Crinetics continues to be well positioned to become the premier, fully integrated endocrine-focused pharmaceutical company. Thank you all for your attention. Operator, we're ready to take questions. For folks on the call, we'd appreciate it if you could limit yourself to 1 question. We have a lot of analysts on the call. I want to ensure that we can provide each of you with a thoughtful response.

[Operator]

[Operator Instructions] We'll take our question from first question from Jessica Fye of JPMorgan.

[Jessica Fye, analyst]

And Marc, it's been great working with you over the years. I was wondering how we should think about what additional insights we could expect to gain from the Phase II updates in CAH and Cushing's coming later this year? And what venue or venues we should look for those at.

[R. Struthers, executive]

Thank you, Jess. Let me hand it over to Alan to give you a brief.

[Alan Krasner, executive]

Yes. We will have final top line results in CAH and Cushing's disease, hopefully, and we will be able to sort of continue to support the messages I believe that we have already communicated at the Endocrine Society [indiscernible]. This appears to be a uniquely effective agent in each disease states in terms of biomarker responses. I think with higher sample sizes, we'll have a greater variety, a greater number of patients evaluated and will have most importantly, probably from a regulatory standpoint is the dose response relationship fully described. And I think that's what will trigger -- that's the information we need to really fully design our Phase III program and go forward in development.

[R. Struthers, executive]

Yes. And maybe as a quick reminder to those not as close to it as us, that we now have the 40, 80 and 120-milligram cohorts enrolled and the data from those groups will be available later this year.

[Operator]

We'll take our next question from Yasmeen Rahimi of Piper Sandler.

[Yasmeen Rahimi, analyst]

Marc, we're going to greatly miss you. It's been really a pleasure working with you, and you've done a tremendous job. So we will definitely miss you and hope the search continues for a little longer, so we can continue working with you. I wanted to ask just a question on carcinoid, if you could provide some color around engagement with the agency, where are you in terms of the sign-off and what's sort of left to do to kick off the registrational study, and I'll jump back into the queue.

[R. Struthers, executive]

Thanks, Yas. Dana, do you want to handle that one?

[Dana Pizzuti, executive]

Well, yes, we've just completed all the analyses that we needed to do and are essentially ready to start the process of engaging with them. So it shouldn't take too long to get that squared away. As we mentioned, we're expecting to get the trial up and running by the end of the year. So we have not yet completed the discussions with them. So we're sort of actively involved.

[Operator]

We'll take our next question from Jeff Hung of Morgan Stanley.

[Lee Hung, analyst]

Best wishes to Marc. You mentioned that you may advance your ADPKD program with a partner independently. What would be the deciding factors for Crinetics to go with one strategy versus the other? And is that only relevant to this program? Or are there specific early-stage programs that you would not be open to partnering?

[R. Struthers, executive]

Well so there's a couple of considerations. Thanks for the question, Jeff. A couple of considerations. One is we've built a remarkably strong team in the endocrinology area. And we would need to start building out our kidney capabilities, our nephrology capabilities in order to do justice for this program. That being said, I think that's quite a reasonable thing for us to do. As a reminder, the polycystic kidney program and the PTH antagonist program, both address nephrology populations.

So there would be some synergy there. On the other hand, there may be groups out there that are further advanced than us in the field and could do better justice to this program more rapidly. And I'll also just say that given the productivity of our discovery group and the depth of our pipeline, I want to make sure that from an internal perspective, we can grow adequately to give each program it's due resources and attention. And so that growth of the company is a factor as well. We're in a very fortunate position to be able to have to make choices like this.

[Operator]

We'll take our next question from Dennis Ding of Jefferies.

[Yuchen Ding, analyst]

Maybe if I can ask one on acromegaly. Curious how you're thinking about the pricing strategy once you guys [indiscernible] get approved next year if you plan a price at a premium given you're an oral.

[R. Struthers, executive]

Thanks, Dennis. I'll let Jim handle that one.

[James Hassard, executive]

Thanks, Dennis. Still too early to talk about pricing. We are engaged with -- as we mentioned, we are engaged with payers and sharing the value proposition. And again, it has been some encouraging conversations to date. But again, we just need to have a deeper look at a number of factors before we disclose pricing probably next year.

[Operator]

Our next question is from Joseph Schwartz of Leerink Partners.

[Joseph Schwartz, analyst]

Best wishes to Marc, of course, it's been great to work with you. Are specific clinical outcomes being systematically measured in [indiscernible]? Or was the observation of 2 patients who resumed menstruation something that was just noticed, I'm just wondering if there are other clinical benefits that might arise when you report top line data in the second half.

[R. Struthers, executive]

Alan, would you like to answer, Joe's?

[Alan Krasner, executive]

Yes. So in addition to our standard endocrine biomarkers to assess disease state in CAH, there's a large number of clinical parameters that are observed in part of -- as part of any clinical trial. But in particular, this one, we do follow certain things very carefully, particularly menstrual function. We have menstrual diaries in these trials, for example. We also look at metabolic control in other ways, using various kinds of blood testing. And we know that, for example, glucose is an important parameter in these patients and other like measures. There's actually going to be a large number of, what I would call, patient-reported outcomes and also physician-reported outcomes, both in Phase II, but even more importantly, in Phase III, when we have larger numbers of patients to assess of both genders.

[Operator]

We'll take our next question from Gavin Clark Gartner of Evercore ISI.

[Gavin Clark-Gartner, analyst]

I just wanted to ask more specifically on the carcinoid regulatory feedback as we're getting close to that. What's your desired base case or expectation on primary endpoint, confidence that a placebo comparator arm will be viable? And also just reconfirm you're looking at both switch and new starts and confirming those would be within the same one trial.

[Dana Pizzuti, executive]

Okay. As far as the patient population, we're definitely intending to include both previously treated and naive patients. I think that we have looked at a lot of different ways to estimate efficacy. And since there's no real sort of guidance is from FDA in this indication, it's a little bit sort of ours to propose, right? So I think that we'd rather kind of have the discussions first and then disclose where we're going after we've designed the trial. Is there anything else, Gavin, that you asked.

[Gavin Clark-Gartner, analyst]

I just reconfirming whether placebo or an active comparator arm may be required.

[Dana Pizzuti, executive]

Our plan is that a placebo trial will be required.

[Operator]

Our next question is from Ryan Skorney of Baird.

[Charles Moore, analyst]

This is Charlie on for Brian. So just thinking about the profile of paltusotine we've seen so far, do you have any plans to investigate in the treatment of neuroendocrine tumors in the future?

[R. Struthers, executive]

We are using it to treat neuroendocrine tumors in those patients that experience the symptoms of carcinoid syndrome. So perhaps, you're referring to understanding the antitumor activity that's well described as part of somatostatin receptor ligands on these tumor types. And so we are thinking that as part of our Phase III, we will be observing tumors, both in the Phase III study in itself and in open-label extensions. But we're not designing the trial to measure antitumor activities as we think we've got a wide range of other areas we should be investing in.

And that the treatment of patients with neuroendocrine tumors is moving more and more to somatostatin analogs for symptom control and other modalities are coming in play for treatment of the tumor growth itself. And I think you'll hear more from us in the coming quarters about some of these details.

[Operator]

We'll take our next question from Catherine Novack of Jones Research.

[Catherine Novack, analyst]

If I can just 1 about the pipeline again about -- curious about the role of SST3 agonism in ADPKD. You can just talk about your decision to go into ADPKD and how this approach might differentiate from earlier studies that looked at [indiscernible] drugs would seem to reduce kidney volume but not necessarily improve kidney function per se.

[R. Struthers, executive]

Yes. No. Thanks, Catherine. And that question could justify a half a day conversation about the science here. But it's fairly remarkable that as we were looking through the literature, just in our day-to-day scientific reading, we noticed that the people studying ciliopathies, of which polycystic kidney is one of the manifestations of the ciliopathies. That everybody was using an antibody against SST III as a cytologic marker for immunostaining of the cilia. So SST 3 has expressed very cleanly in cilia. And we know that the ciliopathies that are caused by mutations in [indiscernible], which results in an imbalance of the cyclic AMP and calcium ratio in the cilia and with too much cyclic AMP. And all somatostatin analogs are acting -- all somatostatin receptors are acting to decrease cyclic AMP levels in cells and in this case, in the primary cilia.

So we'll be coming out with more and more data around this, but we've developed animal models in genetically engineered mice. We've done CIS models and dispersed kidney cells, we've done signaling. We've done a variety of things to begin to shore up the hypothesis that activating the SST-3 will be effective in polycystic kidney disease. But of course, the real test is to get it into patients and see what it does. So that's what we're trying to figure out how to get there, whether either ourselves or through partners but a huge unmet need. And just as a hint, we don't expect, based on the location in the renal tubules, that this will cause the type of very high year-end volumes that you see with the vasopressin antagonist like tolvaptan. And that's one of the major limiting tolerability issues around the use of tolvaptan.

[Catherine Novack, analyst]

Well, thanks, Scott. Definitely looking forward to hearing more from that program in the future.

[R. Struthers, executive]

Super exciting. Very high unmet need.

[Operator]

We'll take our next question from Jon Wolleben of Citizens JMP.

[Jonathan Wolleben, analyst]

Best wishes to Mark. I was hoping you guys could talk a little bit about how you're thinking about next steps, specifically in CAH if you think you'd have enough information to move forward to a pivotal trial and then how you think about integrating younger patients into the program as well.

[R. Struthers, executive]

Well, thanks so much for the question. yes, those are definitely key areas for us in the future. As Alan mentioned and Scott mentioned before that, we're really encouraged by the data so far for CAH. And we think that once we have the full complement of patient data, we'll definitely be able to talk to the FDA about the design of Phase III. So I think the data that you generate from those 3 cohorts in that trial will certainly be enough to go talk to the agency about our Phase III design.

And as far as the pediatric program, we're also actively putting together protocol designs to evaluate that in Phase II and then be able to use that to very quickly move into Phase III because that obviously is a significant unmet medical need with profound morbidity for those kids. So we're very focused on that.

[Operator]

We'll take our next question from Leland Gershell of Oppenheimer.

[Leland Gershell, analyst]

Marc, it's been great working with you and best of luck in the future. Scott, I wanted to ask on your thyrotropin receptor program, you'd mentioned recent calls that you've been moving nicely along with potential candidates. Just wondering where you may be there? Could we see a clinical candidate nominated in the next few months or perhaps in 2025?

[R. Struthers, executive]

Yes. Thanks, Leland. It's always hard to say when you're going to get there. The process of drug discovery is very much an asymptote you just keep getting closer and closer and closer to what you think is an ideal candidate, and at a certain point, you say that's good enough. And I got to say that in a TSH antagonist, where 1% to 2% of the population can have this disease. And I just saw the news this morning that one of my favorite characters Ray in Star Wars was just diagnosed with Grave's disease. But this molecule needs to be really high quality. So we are working hard on that. I can tell we're really close. But whether that's this quarter, next quarter or early next year, I don't know for sure, but it's right around the corner.

[Operator]

We'll take our next question from Douglas Tsao of H.C. Wainwright.

[Douglas Tsao, analyst]

I'll join the chorus of people on saying how much we've enjoyed working with Marc over the years. I guess, maybe a question for Jim. Since you mentioned the fact that patients often have a very different experience with acromegaly than clinicians realize, so I guess in terms of driving adoption, how do you plan to get around that? Because I think that has been a factor that has hampered, there was the launch of [indiscernible] in terms of converting that product. And I know that the paltusotine profile is very different. You have much, much stronger data. But just how do you from a tactical standpoint plan to address that aspect of the launch

[James Hassard, executive]

Thanks, Doug. And I think I'll start where you left off, which is, yes, we've got a great product in paltusotine. And that's something that does differentiate us certainly from most recent launches. But however, it is true that even with such a great product, what we hear from physicians is, if it's not broken, I'm not going to fix it. And that's exactly the purpose and the rationale behind our disease state campaign, acromegalytruth.com. So already, there's a small contingent of endocrinologists that are behind a lot of the data in this area of, again, trying to address this discord in dialogue.

And it is really making sure that physicians are aware of the patient experience and then ensuring that as we get closer to launch, that we really do empower patients to have that discussion with their endocrinologists. Based on the research that we've done, Doug, it's a powerful message. And I know that the physicians have reacted well to the awareness. And I will tell you that patients even react better to it when they see the campaign and realize that, yes, this is the kind of discussion. These are the kinds of symptoms that they're feeling. This is what they want -- this is the kind of discussion they want to have with their endocrinologists. So more to come, and we'll be providing details as to how impactful this is and what the metrics are from the campaign. But it is really that the underpinning of a great product is the awareness around the problem.

[Operator]

And we'll take a question from Corey Jubenvill of LifeSci Capital.

[Cory Jubinville, analyst]

Congrats on all the progress. And Marc, congrats on everything you've helped build over the years. We'll definitely be sad to see you go, but of course, wish you well in whatever comes next. But I guess, can you help give us a bit of context in how your launch efforts in acromegaly could potentially help support a launch in carcinoid syndrome down the line, thinking about these prescriber groups as almost like a Venn diagram, how might a carcinoid patient -- how often might a carcinoid patients be coming in contact with an endocrinologist that might have had previous experience with paltusotine-treating acromegalics in -- while it's certainly been several [ eras ] ago, are there any learnings you're taking from the expansion of octreotide or lanreotide into these patient groups from acromegaly to carcinoid syndrome or [indiscernible] that can be applied to your strategy with paltusotine.

[James Hassard, executive]

thanks , Cory. We have already started to look at the overlap in terms of the customer base. And I'll tell you where we see a great deal of overlap is in the pituitary treatment center. So the same academic centers, there are about 45 of these pituitary treatment centers. And there is a good deal of overlap with, for example, the NCCN cancer network, the national comprehensive cancer network. So like Memorial Sloan Kettering. Dr. [ Aliza Gear ] is at MSK. That's also obviously a cancer institution. And as well, to your point, there are specific endocrinologists that are very much involved in neuroendocrine tumors as well. So there is also an overlap. It will be the -- it will be a new indication for us to get into and oncologists are going to be a new audience for us. But again, where they're located is a lot of co-location and a great opportunity for us.

[R. Struthers, executive]

And maybe I'll just add to that, Corey, that beyond the actual practicing physicians and their staffs, launching your first drug is an exercise in building out a range of different capabilities relationships with those institutions, the pharmacies at those institutions, relationships with the payers. And as I mentioned, just our internal capabilities. So there's a huge amount of synergy between this and then the second launch. And then that, of course, also support the third launch and fourth launches with Atumelnant and then many, many other launches we anticipate with other things coming out of the pipeline.

[Operator]

Thank you. And there are no further questions at this time. I'd be happy to return the call to our host for any closing comments.

[R. Struthers, executive]

Thank you all for being here and listening to us. And those of you who have such affection for Marc, he's not going anywhere right away and you know how to find him, and I'm sure he'd be happy to have a drink or launch or ice cream and catch up some time.

Thank you all for listening.

[Operator]

This does conclude today's Crinetics Pharmaceuticals Second Quarter 2024 Earnings Conference Call. Thank you for participating. You may now disconnect your lines, and have a great day.