What happened
Shares of Corcept Therapeutics (CORT 4.79%), a commercial-stage biopharmaceutical company, are surging following a recent patent approval that suggests a generic version of the company's lead product is a long way off. The stock finished Tuesday's session 32.3% higher.
So what
Corcept Therapeutics derives all its revenue from sales of Korlym, a cortisol receptor blocker approved to treat some patients with Cushing syndrome. Although it earned its first FDA approval back in 2000, sales of the drug are still on the rise and will probably continue rising. Generic drugmakers have a brand new U.S. patent covering improved methods for treating Cushing to tussle with.
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Korlym generated $184 million in revenue for Corcept during the first nine months of the year, and the company's operating profit more than doubled compared to the same period last year, to $66.2 million. With another wall between the company's meal ticket and generic devastation, investors are expecting the growth to continue.
Now what
Corcept expects sales of Korlym to finish 2018 57% higher than a year earlier, but it's going to be a while before the company has a second treatment pulling in some revenue. Corcept's follow-up to Korlym, relacorilant, recently began a phase 3 study that isn't expected to wrap up until late 2020.
While today's new patent is a step in the right direction, Corcept has been trading at 9.0 times trailing sales. That gives the stock a long way to fall if we find out Korlym's patent-protected status isn't sewn up as tight as expected.
