What happened

After news broke that shares will soon be included in the S&P Small Cap 600 index, Corcept Therapeutics' (CORT 1.28%) stock price jumped by 10.8% today.

So what

The addition to the S&P 600 Small Cap Index means funds that track the index have to buy shares, but that doesn't necessarily make this company's stock a buy for the average investor. To determine that, investors need to better understand how the company's making its money now and how it plans to drive growth in the future. Currently, Corcept Therapeutics markets one drug: Korlym, a cortisol-targeting drug that treats endogenous Cushing's disease.

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Although Cushing's is a rare disease with a relatively small addressable patient population, sales have been building steadily. Korlym sales were $50 million in 2015 and $81 million in 2016, and they're expected to reach between $157 million and $162 million in 2017.

The company's spending $11.7 million per quarter on R&D right now, but sales are more than high enough for Corcept Therapeutics to turn a profit. In the third quarter, net income was $13.7 million, and year to date, net income is $30.8 million. 

Now what

Despite Corcept Therapeutics' improving financials, the stock's a little pricey. Shares have more than doubled this year, and that's increased its market cap to nearly $2 billion. As a result, the company's price-to-sales ratio is a whopping 15.4. However, its price-to-earnings ratio is around 20 based on next year's EPS estimates, and that's a bit more reasonable.

In the future, Corcept Therapeutics' success or failure is going to depend on whether competitors' Cushing's disease drugs make it to market and if its internal R&D pipeline can deliver additional successes.

The most advanced drug in its pipeline is relacorilant, which is being developed as a potential Korlym successor. Relacorilant is designed to provide similar efficacy to Korlym without the side effects caused by Korlym's interaction with the progesterone receptor. Relacorilant's phase 2 trial results are expected by the end of Q1 2018, and if those results are positive, then phase 3 trials will begin soon thereafter. The company's also evaluating whether combining its cortisol-targeting drugs with existing medicines in pancreatic cancer and prostate cancer can improve efficacy.

Overall, Corcept Therapeutics is an intriguing company, but it's a bit too rich for me to buy, especially given that it has only one drug on the market currently. If shares do retreat a bit more, however, it could be an interesting stock to tuck into growth portfolios.