Is Corcept Therapeutics Stock A Buy? - Financhill

Is Corcept Therapeutics Stock A Buy?

Is Corcept Therapeutics Stock A Buy? Some of the world’s financial experts think this is biotech’s Golden Era. Advances in science are happening at a rapid rate – and this is good news for people who suffer from diseases and reactions to current treatments. The healing potential of new biopharmaceuticals have reimagined the future of health.

This Golden Era has also opened incredible opportunities to invest profitably in biotech stock trading. These investments could offer huge returns in the long run. But is biotech a good field to invest in, which biotech stock is the best? Here we ask the question is Corcept Therapeutics (CORT) stock a buy?

CORT is dedicated, in part, to treating the ailments people suffer from, sometimes at the hands of the pharmaceutical field meant to help them in the first place. So is CORT share price a buy? 

Corcept Drugs Regulate Cortisol (among other things)

Corcept Therapeutics is on the cutting edge of discovering, developing, and commercializing pharmaceuticals for the treatment of various ailments concerning metabolism, oncology, and psychiatry.

The company’s treatments focus on cortisol and how this stress hormone causes the above disorders. Corcept’s vast portfolio includes proprietary compounds meant to modulate how cortisol affects the body.

Corcept’s drugs engage in selective modulation – in other words, while regulating cortisol, the drugs are effectively able to allow the body’s progesterone to continue its function untouched.

Corcept owns the intellectual property rights to its proprietary compounds. These rights include the composition of its drugs and cortisol modulator usage in the treatment of several disorders.

The company’s mission is to discover, develop, and provide safe, effective treatment therapies for the individuals that need these treatments.

Is Corcept Therapeutics Stock A Buy?

Corcept, headquartered in Menlo Park, has consistently beat its earnings estimates. 2020 Q1 revenue was $93.2 million – an impressive 44% increase over 2019 Q1.

While the coronavirus has caused many companies to double back on revenue estimates, and some companies to quit providing guidance altogether, this isn’t so with Corcept.

In 2019, Corcept projected 2020 revenue of between $355-and $375 million – this figure was recently reaffirmed.

Aside from revenue estimates and predictions, the company itself is highly regarded for its pinpointed mission and its overall performance.

Corcept set out to design pharmaceuticals to help individuals suffering from “metabolic, oncologic, and psychiatric” ailments due to unregulated cortisol production – and the company has delivered.

Cortisol is a stress hormone – it’s the one our bodies produce when in a state of “fight or flight”. But our bodies also need cortisol – albeit in small doses – to perform several of our most basic bodily functions.

From an analyst standpoint, the company’s revenue is the classic staircase – upward trending, of course. And this is exactly what investors like to see in growing companies. Its trailing P-to-E ratio far outweighs the industry’s average.

Risks of Investing in CORT Stock

There are inherent risks with any investment. When it comes to pharmaceutical companies, investors like to see “eggs” spread across many “baskets” – in the case of Corcept, all their “eggs” are currently in just one – their proprietary drug, Korlym.

Korlym reduces surplus glucose in bloodstreams, assisting Cushing’s Disease patients. Cushing’s Disease primary marker is an overabundance of cortisol – in patients that have diabetes or another glucose intolerance, Korylm proves a welcome treatment.

Corcept Therapeutics possesses 10 patents for ingredients, compounds , and specifications for Korlym. But in 2019, two pharmaceutical companies (Teva and Sun) attempted to apply with the FDA to create generic versions.

This isn’t the first time Corcept has had to fight for their patents. Neptune Generics has also attempted – and failed – to challenge Corcept’s patent validity.

The outcome of Teva and Sun’s applications pose a potential threat to Corcept. But the good news is that Corcept’s patents aren’t due to expire until 2037 – so that’s in their favor currently. Teva’s case is scheduled for February 2021 and amended pleadings from both Sun and Corcept are due no later than November 23, 2020.

These may seem like roadblocks for the pharmaceutical company, but in all actuality if these cases are in favor of Corcept, no generics can be created until at least 2037 and, while these cases remain in the legal system, Corcept continues to make money.

Another item on the plus side for Corcept is the fact that the company is developing other potential game-changers in the pipeline.

Relacorilant is a non-steroid being developed for Cushing’s patients and various ailments caused by the disease. The first two trial phases for relacorilant have proven successful, although phase 3 was slowed due to COVID worries. Corcept expects relacorilant to have far fewer side effects than their current winner, Korlym.

One of the worst side effects for many patients of Cushing’s Disease is obtrusive weight gain. A Corcept drug still in trials, miricorilant, hopes to treat this side effect of Cushing’s Disease. Other drugs in the company pipeline include treatments for ALS and PTSD.

Will Corcept’s Competitors Beat It?

Contrary to what you might think based on its current legal battles, Corcept’s closest competitors are actually Strongbridge Biopharma and ViaCyte, which is currently privately held.

Corcept’s funding totals $90.3 million with revenue of $351.2 million. Strongbridge funding totals $318.6 million but only has revenue of $25.7 million.

ViaCyte’s funding totals $171.8 million and also has slow revenue of just $25 million.

Is Corcept Stock a Good Buy: The Bottom Line

The current analytical consensus is that Corcept Therapeutics is a buy. This buy rating has held firm since August 2020.

What do you think? Is now a good time to invest in biopharmaceuticals?

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The author has no position in any of the stocks mentioned. Financhill has a disclosure policy. This post may contain affiliate links or links from our sponsors.