Corcept Plunges After FDA Rejects Key Cushing's Syndrome Drug
Shares fall over 12% as U.S. regulators issue a Complete Response Letter for relacorilant, citing an unfavorable benefit-risk profile and demanding more data.
Shares of Corcept Therapeutics (CORT) fell sharply in Tuesday trading, dropping over 12% after the U.S. Food and Drug Administration (FDA) rejected the company's New Drug Application (NDA) for its lead drug candidate, relacorilant.
The sell-off, which saw the stock trading at $70.19, was prompted by the FDA's issuance of a Complete Response Letter (CRL) for the drug, intended to treat hypercortisolism, a severe metabolic disorder also known as Cushing's syndrome. According to Corcept, the agency determined it could not approve the application in its current form, citing an unfavorable benefit-risk profile and requesting additional efficacy data.
The decision is a significant setback for the Redwood City-based biopharmaceutical company. Relacorilant was widely seen as the heir apparent to Corcept's flagship product, Korlym, which also treats Cushing's syndrome and currently accounts for the vast majority of its revenue. The rejection clouds the company's growth trajectory and its strategy to transition patients to a new, potentially more refined therapy.
In a statement released Tuesday morning, the company revealed the FDA's concerns despite its pivotal Phase 3 GRACE trial meeting its primary endpoint. In that study, relacorilant demonstrated statistically significant improvements in controlling both blood pressure and blood sugar, key symptoms of hypercortisolism. However, the FDA's letter indicates that meeting the primary endpoint was not sufficient to outweigh perceived risks or to fully establish the drug's net benefit.
"The FDA has requested additional evidence of efficacy to support a favorable benefit-risk assessment for relacorilant for the treatment of hypercortisolism," the company stated, adding it plans to request a meeting with the agency to discuss the path to approval.
Market reaction was swift and severe. After an initial premarket plunge that at one point exceeded 30%, the stock settled to a loss of 12.06% during regular market hours on more than triple its average trading volume. The move pushed the company’s market capitalization down to approximately $8.7 billion.
The rejection forces a significant re-evaluation of the investment thesis for Corcept, according to market analysts. Before the announcement, Wall Street was broadly positive on the company's prospects, with a consensus analyst price target of $127.20, implying strong confidence in relacorilant's approval and commercial potential. This FDA roadblock introduces significant delays and costs, as conducting further clinical trials could take years and millions of dollars.
Corcept's reliance on a single product, Korlym, has long been a key risk for investors. While profitable, Korlym faces its own challenges, including potential generic competition. Relacorilant was designed to be a non-abortifacient alternative that does not carry some of Korlym's side effects, which the company hoped would secure its franchise in the hypercortisolism market for the next decade.
As of its latest financial reports, Corcept held a strong cash position, which will be crucial as it navigates the next steps. The company's future now hinges on its upcoming discussions with the FDA and its ability to generate the additional data required to finally secure approval for relacorilant.