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Corcept (CORT) Down 11.3% Since Last Earnings Report: Can It Rebound?

Zacks Equity Research
HealthStream (HSTM) delivered earnings and revenue surprises of 71.43% and 1.18%, respectively, for the quarter ended June 2019. Do the numbers hold clues to what lies ahead for the stock?

It has been about a month since the last earnings report for Corcept Therapeutics (CORT). Shares have lost about 11.3% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Corcept due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.

Corcept Q1 Earnings Beat Estimates, Revenues Miss

The company delivered adjusted first-quarter 2019 earnings of 20 cents per share, beating the Zacks Consensus Estimate of 18 cents. The bottom line also improved from the year-ago quarter’s 19 cents on higher revenues.

Although revenues in the quarter under review rose 12% from the prior-year peiod’s level to $64.8 million, the metric missed the Zacks Consensus Estimate of $68 million. However, the top line declined sequentially as insurance companies forced patients — receiving orphan medicines, such as Korlym — to re-authorize their insurance in the beginning of every year. On the first-quarter conference call, management stated that it is working with more physicians and shipping Korlym to more patients.

Research and development expenses increased 18.1% to $20.2 million. Likewise, selling, general and administrative expenses escalated 32.6% to $24.4 million.

Pipeline Update

Corcept’s lead compound for metabolic disorders is CORT118335. The company initiated dosing of CORT118335 in the placebo-controlled phase Ib study for the prevention of antipsychotic-induced weight gain. It also plans to begin the two phase II studies in the reversal of antipsychotic-induced weight gain during the second half of the year.

Another phase II program on CORT118335 as a treatment of non-alcoholic steatohepatitis (NASH) is also planned in the second half of 2019.

Corcept’s proprietary, selective cortisol modulator is relacorilant. Last November, Corcept dosed the first patient in the phase III GRACE analysis of relacorilant to treat Cushing’s syndrome. The company is continuing with dosing in the above-mentioned study at sites across the United States, Canada and Europe. Both FDA and the EMA designated relacorilant as an Orphan Drug for the treatment of Cushing’s syndrome.

Last June, Corcept announced positive data from a phase I/II probe on relacorilant in combination with Celgene's Abraxane (nab-paclitaxel) to treat patients with solid tumors. A phase II study on relacorilant plus Abraxane is currently ongoing for the treatment of ovarian cancer. The company plans to enroll 180 patients all over the United States and Europe.

Additionally, Corcept intends to present data from the phase I/II study of relacorilant plus Abraxane on a variety of solid tumors and metastatic pancreatic cancer at the meeting of American Society of Clinical Oncology this June.

Meanwhile, Corcept is administering medicinal doses to patients in its phase I/II investigation of CORT125281, a combined regime with Pfizer’s Xtandi, to address patients suffering metastatic castration-resistant prostate cancer. The company aims to determine the optimal dose in the second half of the current year.

2019 Guidance

Corcept reiterated its earlier reported quarter’s revenue guidance. The company expects the same in the range of $285-$315 million.

How Have Estimates Been Moving Since Then?

Fresh estimates followed a downward path over the past two months. The consensus estimate has shifted -5.26% due to these changes.

VGM Scores

At this time, Corcept has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.

Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Corcept has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.



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