Corcept Therapeutics Inc.
) were down 50.5% after the company announced that it will
discontinue the study on Korlym (study 14) for the treatment of
psychotic depression after an interim analysis (n=226) revealed
that the study has failed to meet its primary endpoint, which was a
rapid and sustained reduction in the patients' psychotic symptoms
with statistical significance.
Hence, the independent data monitoring committee recommended
Corcept that the study is unlikely to generate a statistically
significant result even after full enrollment.
Concurrent with the study results, Corcept reported first
quarter 2014 results. Corcept posted a loss per share of 14 cents
in the first quarter of 2014, wider than the Zacks Consensus
Estimate of a loss of 10 cents and a loss of 12 cents in the
Corcept generated revenues of $4.4 million in the first quarter
of 2014, missing the Zacks Consensus Estimate of $5.0 million.
Revenues jumped 156.5% y/y.
In Apr 2012, Corcept launched its drug, Korlym, in the U.S.
Korlym is approved in the U.S. and the EU 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.
Selling, general and administrative expenses were $9.8 million
in the first quarter of 2014, up 17.0% from the year-ago
Research and development expenses surged 71.1% in the first
quarter to $7.3 million. The increase was mainly attributable to
increased enrolment in Study 14 and additional spending for the
development of the company's next-generation selective GR-II
2014 Outlook Upped
Corcept now expects revenues of $25 million-$29 million in 2014,
up from the previous guidance of $24 million-$28 million. The Zacks
Consensus Estimate of $26.0 million was well within the new
guidance provided by the management.
Even though we are encouraged by the increase in 2014 guidance,
the discontinuation of the phase III study on Korlym was a major
setback. Corcept has only one approved drug in its portfolio,
Korlym. The label expansion of Korlym for additional indication
would have boosted the top line.
Corcept currently carries a Zacks Rank #3 (Hold). Right now,
Johnson & Johnson
) look attractive. All three carry a Zacks Rank #2 (Buy).
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