Corcept Therapeutics Incorporated (CORT -2.83%) is definitely on a roll. The drugmaker's stock is up nearly 70% so far in 2017. Corcept's share price has has more than doubled over the past 12 months. And over the last three years, the company's market cap has nearly quadrupled.
What's behind Corcept's tremendous performance? The following three charts show why the company has been so successful.
Image source: Getty Images.
1. Impressive revenue and earnings trends
Since winning Food and Drug Administration approval in 2012 for Cushing's syndrome drug Korlym, Corcept's financial results have looked very good. Sales for Korlym have steadily increased, helping the company to become profitable last year.
CORT Revenue (Quarterly). Data by YCharts.
Corcept is by no means an overnight success, though. In 1998, the company began developing a compound to control the effects of cortisol in the body by acting as a competitive antagonist at the glucocorticoid receptor (GR). The effects of excess cortisol are severe and often life-threatening. That compound, mifepristone (later branded as Korlym), eventually proved to be both effective at controlling cortisol.
2. Great expectations for earnings growth
Can Korlym continue to drive Corcept Therapeutics' earnings even higher? Wall Street analysts definitely think so.
Data source: Yahoo! Finance. Chart by author.
Corcept is expected to achieve tremendous earnings growth over the next few years. An estimated 20,000 Americans have Cushing's syndrome, with around 3,000 new patients diagnosed with the condition each year. However, a large number of of individuals who suffer from Cushing's syndrome remain undiagnosed.
Korlym does have some competition, however. Novartis (NVS 0.80%) gained FDA approval in December 2012 for Signifor in treating Cushing's disease. Around 70% of patients with Cushing's syndrome have Cushing's disease. Novartis is also developing another drug, osilodrostat, targeting treatment of Cushing's disease.
Also, Strongbridge Biopharma (SBBP) is evaluating Recorlev in a late-stage study for treating Cushing's syndrome. Preliminary results from this study should be on the way within the next few months.
3. Pipeline potential
Although an analyst from Janney Montgomery doesn't think highly of Corcept's pipeline, the company does have more possibilities than just Korlym. Corcept has a solid candidate with CORT125134 and a couple of experimental drugs that should advance to phase 1 clinical studies.
Data source: Corcept Therapeutics. Chart by author.
CORT125134 is a selective cortisol modulator. Corcept thinks that the drug could provide patients the same benefits as Korlym in treating Cushing's syndrome but without the side effects associated with Korlym's affinity for the progesterone receptor.
Corcept is also conducting a phase 1/2 clinical study of CORT125134 with Celgene's (CELG) Abraxane. This study is targeting solid tumors, including breast cancer and ovarian cancer. Although this study is being done without Celgene's collaboration, the big biotech is funding another study of Korlym in combination with Abraxane in treating breast cancer and prostate cancer. This other study is being led by researchers at the University of Chicago.
Robert Fishman, Corcept's chief medical officer, said in May that experimental drug CORT118335 will move forward to a phase 1 study as a potential treatment for metabolic disorders such as fatty liver disease and antipsychotic-induced weight gain. He also stated that CORT125281 will advance to a phase 1 study targeting castration-resistant prostate cancer.
Looking ahead
The prospects for Corcept Therapeutics appear to be pretty good. Momentum for Korlym should continue. CORT125134 seems to have solid potential.
Investors should like Corcept's growth potential. My colleague Sean Williams recently noted that Corcept is one of the cheapest biotech stocks on the market based on its PEG ratio, which factors in estimated growth. I suspect that the stock still has plenty of room to run.
