Corcept Therapeutics Inc. (CORT) filed Quarterly Report for the period ended 2009-06-30.
Corcept Therapeutics Incorporated is a pharmaceutical company focused on developing drugs for treating severe psychiatric and neurological diseases. Corcept\'s lead product CORLUX is in Phase clinical trials for treating the psychotic features of PMD. The drug is administered orally to PMD patients once per day for seven days. CORLUX a potent GR-II antagonist appears to reduce the effects of the elevated and abnormal release patterns of cortisol seen in PMD. The company has also initiated a proof-of-concept study to evaluate the ability of CORLUX to mitigate weight gain associated with the use of olanzapine. Corcept Therapeutics Inc. has a market cap of $55.2 million; its shares were traded at around $1.11 with and P/S ratio of 264.3.
Highlight of Business Operations:
Research and development expenses remained level at approximately $3.3 million for the three-month period ended June 30, 2009 and the comparable period in 2008. For the six-month period ended June 30, 2009, research and development expenses increased 23% to $7.5 million from $6.1 million for the six-month period ended June 30, 2008. The increase in expenses reflects clinical trial cost increases of approximately $1.2 million for the year-to-date period as compared to the same period of 2008, related to the clinical trials that commenced enrollment during 2008 in Cushing’s Syndrome, psychotic depression and the mitigation of weight gain caused by Risperdal. During the three- and six-month periods ended June 30, 2009, as compared to the same periods in 2008, there were also increases of approximately $670,000 and $925,000, respectively, in costs related to research and preclinical work with our selective new GR-II antagonists, including CORT 108297 as work progresses on preparations for the submission of the IND later this year. During the second quarter and first half of 2009, as compared to the same periods in 2008, there were also increases in staffing costs of approximately $125,000 and $240,000, respectively, and consulting expenses of approximately $40,000 and $120,000, respectively, to provide the resources necessary to support the increasing activities. Offsetting these increases, during the three- and six-month periods ended June 30, 2009, as compared to the same periods in 2008, there was a decrease in manufacturing expenses related to CORLUX of approximately $755,000 and $1.1 million, respectively, due to the acquisition and manufacture during 2008 of the initial supply of materials for the CORLUX clinical trials and completion of certain manufacturing process development activities related to CORLUX.
General and administrative expenses increased 10% to $1.5 million for the three-month period ended June 30, 2009 from $1.4 million for the comparable period in 2008. For the six-month period ended June 30, 2009, general and administrative expenses increased 10% to $2.9 million from $2.6 million for the six-month period ended June 30, 2008. The increase in costs between years was primarily related to increases in staffing costs of approximately $110,000 and $230,000, respectively for the three- and six-month periods of 2009, as compared to the same period of 2008, due primarily to the recruitment of a new chief financial officer, who commenced work with us in November 2008. The increases in staffing costs included net increases in stock-based compensation of $55,000 and $70,000, respectively for the three- and six-month periods of 2009, as compared to the same period of 2008, which reflect the cost of stock options granted to the new chief financial officer, other employees and directors. Increases in consultancy costs of approximately $65,000 and $95,000, respectively, for the three- and six-month periods of 2009, as compared to 2008, primarily related to the costs associated with periodic filings with the SEC and the initial year of auditor attestation of the effectiveness of our internal control in accordance with Sarbanes Oxley (SOX) section 404 were offset by decreases in legal costs of approximately $50,000 and $100,000, respectively, for these periods.
Interest and other income, net — Interest and other income, net of investment management fees, was approximately $6,000 and $92,000, respectively, for the three- and six-month periods ended June 30, 2009, as compared to $300,000 and $455,000, respectively, for the comparable periods in 2008. Interest income for the three- and six-month periods ended June 30, 2008 included approximately $110,000 and $120,000, respectively, that was earned on the note receivable issued in connection with the March 2008 financing, which was collected in February 2009. The remainder of the decrease was attributable to lower yields on the investment portfolio and a lower level of invested funds.
Other expense — Other expense was approximately $2,000 and $4,000, respectively for the three- and six-month periods ended June 30, 2009, as compared to $7,000 and $11,000, respectively, for the same periods in 2008 and is comprised of interest expense on capitalized leases and state tax on capital which is based on our projected capital and asset positions as of each year-end.
At June 30, 2009, we had cash, cash equivalents and investments balances of $14.4 million, compared to $18.3 million at December 31, 2008. Net cash used in operating activities for the six-month period ended June 30, 2009, was approximately $9.9 million, which was comparable to that used in the same period of 2008. The use of cash in each period was primarily a result of our research and development activities and amounts incurred to support our administrative infrastructure. We expect cash used in operating activities during the remainder of 2009 will be approximately the same as during that period of 2008 as the increased spending on the continuation of Cushing’s Syndrome study and the development of our selective GR-II antagonists will be offset by the decreased spending in psychotic depression and weight gain mitigation. We expect our requirements for funds for operating activities will increase during later years due to the continuation and expansion of our development programs for Cushing’s Syndrome, psychotic depression and our selective GR-II antagonists, research activities, commercialization activities and general and administrative expenses.
On March 25, 2008, we entered into a Committed Equity Financing Facility (CEFF) with Kingsbridge Capital Limited (Kingsbridge), a private investment group. Under the terms of the agreement, Kingsbridge has committed to provide up to $60 million of capital in exchange for newly-issued shares of our common stock for a period of up to three years after the Securities and Exchange Commission declares effective the registration statement filed by us covering the resale of the shares of common stock issuable in connection with the CEFF and the shares of common stock underlying the warrant issued to Kingsbridge. The maximum number of shares that can be sold by us under this agreement is approximately 9.6 million shares. Under the terms of the agreement, the determination of the exact timing and amount of any CEFF financings will be made solely by us, subject to certain conditions. The agreement currently requires a minimum stock price of $1.50 per share to allow us to issue shares to Kingsbridge under the CEFF. Our share price is unpredictable and if it does not increase above $1.50 per share we may not be able to access funds from Kingsbridge under the CEFF unless we are able to lower the minimum share price requirement. Based on the volume weighted average price on the NASDAQ Capital Market for our common stock for the period from March 25, 2008, the date of the signing of the Kingsbridge CEFF, through August 7, 2009, the maximum amount of net proceeds that could be raised under the CEFF is approximately $16 million. Over the 60 trading day period ended August 7, 2009, the price for our common stock on the NASDAQ Capital Market has ranged from $0.75 to $1.32. The actual amount of funds that can be raised under this agreement will be dependent on the number of shares actually sold under the agreement and the market value of our stock during the pricing periods of each sale.
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