The news for investors in Corcept Therapeutics (CORT) today is downright depressing. And not, interestingly enough, because of the company’s Q1 earnings report, which was released prior to the opening bell this morning.
No, the reason the stock’s plummeting on Wednesday is because a 226-patient phase III trial for its depression drug mifepristone has been halted after an independent safety committee analyzed data and concluded that it was unlikely to produce results.
This was the fourth Phase-III trial testing mifepristone’s effectiveness in treating patients with psychotic major depression (PMD), and it’s now the fourth failure to produce a positive result. Small-cap biotech firm Corcept’s treatments are focused on how the naturally produced steroid cortisol affects the body. From the company’s website:
“Since our founding in May 1998 we have been focused on the impact of cortisol and the potential benefits of developing glucocorticoid receptor antagonists. About 80 percent of the tissues in the body have receptors for cortisol, and the effects of excess cortisol are severe and often life-threatening.”
Mifepristone is intended to work by blocking the glucocorticoid receptor type II to stop the proliferation of cortisol. It’s already used to treat Cushing’s syndrome under the name Korlym. Cushing’s syndrome is a rare endocrine disorder that affects about 20,000 patients in the United States, and Corcept has been commercializing the treatment since receiving FDA approval in 2012.
"Although the interim results of our psychotic depression study are disappointing, our own research and the research of academic investigators has shown that glucocorticoid receptor antagonism has therapeutic potential in many serious diseases," said CEO Joseph Belanoff. "... In addition, many other clinical studies are underway at leading academic institutions to test the effectiveness of mifepristone and our newer compounds in various indications. We expect that 2014 will be a busy and productive year."
The bad news sent shares plummeting about 50 percent on heavy volume. This came despite an earnings report that showed a nearly 160 percent year-over-year increase in revenues in Q1, from $1.7 million in 2013 to $4.4 million in 2014, and raised its projections for the revenue Korlym should raise in the United states this year from $24-$28 million to $25-$29 million.
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