Corcept's Devotion to Its Lead Drug

Since 2006, Corcept Therapeutics (Nasdaq: CORT  ) has been one of the down-but-not-out development-stage drugmakers whose lead drug has produced less than exciting results from clinical studies. Last week, Corcept released its year-end 2007 results and updated investors on the progress of this compound.

Corcept's lead drug is Corlux, which is designed to help patients with psychotic depression. Corlux was tested in three phase 3 studies that finished over the past two years. After it was shown that Corlux failed to help patients (in a statistically significant manner) with their psychotic symptoms of this duel disorder in the first of these studies in 2006, shares of Corcept were hammered and haven't fully recovered since.

Even with the failed studies, Corcept showed that it still has some life left. Last year, its collaboration with Eli Lilly (NYSE: LLY  ) to test whether Corlux could help patients taking Lilly's Zyprexa antipsychotic drug with their weight gain was a small success for Corcept.

In December, Corcept also initiated a phase 3 study of Corlux in an ultra-rare orphan disease called Cushing's Syndrome and plans to do more testing of Corlux's effects on weight control with other atypical antipsychotic drugs like AstraZeneca's (NYSE: AZN  ) Seroquel and Johnson & Johnson's (NYSE: JNJ  ) Risperdal.

Last week, Corcept even announced the start of a fourth phase 3 study of Corlux for psychotic depression. When the first of Corlux's psychotic depression studies failed in August 2006, Corcept blamed the results on an "unusually high" placebo effect. When the second phase 3 study failed a month later, Corcept also blamed a higher than expected placebo effect in the control group. When the third study came back negative last March, Corcept said the drug didn't reach some patient's bloodstreams.

This fourth phase 3 study is supposed to get past some of these problems. It's similar in size to the largest of Corcept's phase 3 trials, and that study took 2 and 1/2 years to produce clinical trial data. With a much smaller number of clinical trial sites (designed to improve the quality of patient enrollment and improve study tracking), it could take longer to enroll people for this phase 3 study.

Earlier in the week, Corcept raised another $25 million to give it $42 million in cash and investments on its balance sheet after burning through $11 million last year. With Corlux looking as promising as ever, even with multiple study failures, Corcept is showing that it isn't necessarily three strikes and you're out for a drug developer.


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