Corcept: Tough Year Ahead – Corcept Therapeutics Incorporated (NASDAQ:CORT)

Corcept Therapeutics Inc. (CORT) is a commercial-stage company discovering and developing drugs to modulate the effects of the stress hormone cortisol, for the treatment of severe metabolic, oncologic and psychiatric disorders. Corcept has an approved drug, Korlym (mifepristone), for Cushing’s syndrome. However, a new drug, relacorilant, is being trialed in this indication, which is better than Korlym as well as competing drugs from the pipelines of a few other companies. However, these other competing drugs will hit the market sooner than relacorilant. That is the story we will investigate here using our IOMachine method.

Catalyst

Top line data is expected in 4Q-2020 from the ongoing phase 3 trial “GRACE” to study efficacy and safety of relacorilant in endogenous Cushing’s syndrome. Another notable event for the company is an Inter Partes Review (IPR) related to Korlym, with the next date of oral argument hearing set for November 14, 2019. Neptune Generics, LLC, backed by a U.K.-based litigation finance firm, Burford Capital Ltd., petitioned the U.S. Patent Trial and Appeal Board (PTAB) in August 2018, and the PTAB granted institution to the IPR in February 2019.

Product

Relacorilant is a small-molecule, glucocorticoid receptor antagonist designed by Corcept. The drug has been designated orphan drug for Cushing’s syndrome and is in the process of being designated orphan drug for pancreatic cancer by both the U.S. FDA and the EMA. The improvement or advantage in the new molecular entity relacorilant over the already approved Korlym is that it does not cause progesterone receptor (PR)-related side effects like vaginal bleeding, uterine thickening and pregnancy termination. It also does not cause hypokalemia (potassium deficiency), a serious adverse event (SAE) in patients taking Korlym.

Pipeline

The company has several trials ongoing at different stages for relacorilant as well as mifepristone alone or in combination with other drugs.

(Image Source: Company website)

Trials

A phase 2 trial of development candidate CORT125134 (later trade-named relacorilant) in patients with endogenous Cushing’s syndrome was completed in September 2018. The open-label study with two dose groups, each with a two-step dose escalation, was designed to evaluate the safety and efficacy of CORT125134 for the treatment of endogenous Cushing’s syndrome. 30 participants were recruited based on a confirmed diagnosis of endogenous Cushing’s syndrome, requiring medical treatment of hypercortisolemia, each having at least one of type 2 diabetes mellitus or impaired glucose tolerance or hypertension. CORT125134 was administered orally once daily for 16 weeks, with dose escalations occurring every 4 weeks. Two groups were given different levels of dosing. Group 1 was started at 100 mg/day, then escalated to 150 mg/day at 4 weeks and to 200 mg/day at 8 weeks. Group 2, also termed the “high-dose cohort,” was started at 250 mg/day, then escalated to 300 mg/day at 4 weeks and to 350 mg/day at 8 weeks. A data review committee reviewed PK and safety data generated at every dose level and recommended the final plan for dose escalation in Group 2.

Results from the study demonstrated better efficacy and safety of CORT125134 over currently approved treatments for Cushing’s syndrome. 50% of patients, the high-dose cohort, achieved improved glucose control. 64% patients in this high-dose cohort with hypertension exhibited reduced blood pressure. Patients in this cohort also met several secondary endpoints, including improvements in hypercoagulopathy, liver function, and cognition and decreased insulin resistance. CORT125134 also led to weight loss and improved additional health parameters, and had a general positive effect on quality of life. CORT125134 was generally well-tolerated in Phase 2, and there were no PR-related adverse events or instances of drug-induced hypokalemia. In effect, results similar to those achieved by 6 months of Korlym therapy were achieved with less than 3 months (12 weeks) of CORT125134, and that too without the known side effects of Korlym.

Market/competition

Endogenous Cushing’s syndrome mostly affects adults aged 20-50. An estimated 20,000 patients have Cushing’s syndrome in the U.S., with about 3,000 new patients being diagnosed each year. The global market is estimated to increase from about $251 million in 2017 to about $405 million by 2023.

The composition of matter patent covering Korlym’s active ingredient, mifepristone, has expired. Relacorilant is expected to take over Korlym’s market for Cushing’s syndrome, as well as its competition from Novartis’ (NVS) Signifor (pasireotide) injection. However, it may face competition from Strongbridge Biopharma’s (SBBP) levoketoconazole, a chiral form of ketoconazole, and Novartis’ osilodrostat, a cortisol synthesis inhibitor, both of which are in phase 3 testing in the U.S. and the EU, and will have top line data in 4Q-2019, much ahead of Corcept’s top line data from the GRACE phase 3 trial of relacorilant.

Financials

Q2 earnings beat market estimates. GAAP diluted net income for 1H-2019, or the 6 months ended 6/30/2019, was $0.31 per share. While releasing 2Q-2019 results, the company reaffirmed revenue guidance of $285-315 million for FY-2019. In the past 52 weeks, CORT share price has seen a high of $19.48 and a low of $9.14. 102.38 million shares float is available out of 113.69 million outstanding shares. Insiders hold 9.71%, and all insider sales in past 2 years have been options exercises. As of 6/30/2019, 178 institutions, of which 25 are hedge funds, hold 79.82% shares.

Risks

Except relacorilant, all other development candidates are in early stages. This is a major weakness in Corcept’s pipeline. The other is that relacorilant’s top line data will be a year behind the two competitors’ phase 3 data readout. So, between Korlym’s patent expiry and the new drug from Corcept, there will be other entrants to the market, not to mention the possibility of generic entrants.

Opinion

2020 will be a tough year for Corcept, with possible decrease of Korlym sales, and relacorilant would reach commercialization only in 2021, while competition goes to market. We would wait for some time to see further price reduction and then consider a position in 4Q-2019 or 1Q-2020.

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Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.