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Why Is Corcept (CORT) Down 8.9% Since Last Earnings Report?

Zacks Equity Research

It has been about a month since the last earnings report for Corcept Therapeutics (CORT). Shares have lost about 8.9% 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 drivers.

Corcept Earnings Beat in Q3, Korlym Boosts Sales

The company reported third-quarter 2019 earnings of 22 cents per share, surpassing the Zacks Consensus Estimate of 19 cents and also the year ago quarter’s figure of 14 cents.

Additionally, earnings included the impact of stock-based compensation and the utilization of deferred tax assets. Taking this into account, adjusted earnings came in at 31 cents per share compared with 22 cents in the year-ago quarter.

Revenues in the reported quarter rose 26.6% from the prior-year period to $81.5 million, primarily backed by higher sales and the strong uptake of Corcept’s Cushing’s syndrome drug Korlym. Sales also beat the Zacks Consensus Estimate of $78 million.

Research and development expenses increased 20.6% to $22.8 million. Selling, general and administrative expenses also escalated 13.6% to $24.2 million.

Pipeline Update

Corcept’s lead candidate relacorilant is being evaluated in the phase III GRACE study to treat Cushing’s syndrome. Dosing is currently ongoing in the above-mentioned study at sites across the United States, Canada and Europe.

Earlier, Cushing’s syndrome patients in a phase II study exhibited meaningful improvements in glucose control and hypertension. The GRACE study is being conducted to confirm relacorilant’s positive phase II results and provide the basis for its approval in the United States and Europe. The company plans to submit an NDA for relacorilant in the fourth quarter of 2021.

Corcept plans to commence a placebo-controlled study of relacorilant in the first quarter of 2020 in patients whose Cushing’s syndrome is caused by adrenal adenoma.

This apart, a phase II study on relacorilant and Celgene's Abraxane is currently underway for the treatment of ovarian cancer. Enrolment of patients in the same is on. Corcept also plans to start a phase III study on the same combo for metastatic pancreatic cancer and is seeking an FDA guidance regarding the fastest path to approval for that indication.

Corcept announced positive top-line results from the phase Ib study on another candidate called miricorilant for the reduction of weight-gain caused by antipsychotic. Data from the study showed that at the first dose level, healthy patients who received the combo of Eli Lily’s Zyprexa (olanzapine) and miricorilant gained less weight compared to those who received olanzapine + placebo.

Corcept is also advancing miricorilant as a treatment for NASH, a serious and widespread liver disorder, and plans to initiate a double-blind, placebo-controlled phase II study in 2020.

2019 Guidance

Corcept narrowed the lower end of its revenue guidance for 2019. The company now expects the same in the range of $300-$315 million compared with the previous view of $285-$315 million.

How Have Estimates Been Moving Since Then?

Fresh estimates followed an upward path over the past two months. The consensus estimate has shifted 22.84% due to these changes.

VGM Scores

At this time, Corcept has a strong Growth Score of A, a grade with the same score on the momentum front. Charting a somewhat similar path, 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 A. 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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