Wider-than-Expected Loss at Corcept

Zacks

Corcept Therapeutics Inc. (CORT) posted a loss per share of 11 cents in the first quarter of 2013, wider than the Zacks Consensus Estimate of a loss of 10 cents. In the year-ago quarter, Corcept reported a loss of 13 cents.

Corcept generated revenues of $1.7 million in the first quarter of 2013, missing the Zacks Consensus Estimate of $3.0 million.

In Apr 2012, Corcept began offering its first product, Korlym (mifepristone) 300 mg tablets after getting approval from the US Food and Drug Administration (:FDA) in Feb 2012.

Korlym, is approved in the US as a once-daily oral medication for the treatment of hyperglycemia secondary to hypercortisolism in adults suffering from endogenous Cushing’s syndrome, who have type II diabetes or glucose intolerance.

We note that Corcept enjoys orphan drug designation for Korlym from the FDA for the approved indication. This implies that the drug enjoys marketing exclusivity for the indication in the US until Feb 2019. Korlym was also approved by the European Commission for the treatment of endogenous Cushing’s syndrome in Oct 2011.

Selling, general and administrative expenses were $8.4 million in the first quarter of 2013, up 12.0% from the year-ago quarter. The increase was mainly due to higher staffing, consultancy and other professional services costs related to the commercialization of Korlym.

Research and development expenses in the first quarter were $4.2 million, up from 20.2% from the year-ago quarter. The increase was mainly due the expansion of the phase III trial mifepristone, the active ingredient in Korlym, for the treatment of psychotic depression along with the development of the company’s next-generation selective GR-II antagonists.

We believe that the key objective for Corcept in 2013 will be the successful commercialization of Korlym.

Corcept currently carries a Zacks Rank #3 (Hold). Pharma stocks, which currently look attractive, include Santarus, Inc. (SNTS), Onyx Pharmaceuticals, Inc. (ONXX) and WuXi PharmaTech (Cayman) Inc. (WX). All three carry a Zacks Rank #1 (Strong Buy).

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