Shares of Corcept Therapeutics (NASDAQ:CORT) fell over 18% today after the Southern Investigative Reporting Foundation (SIRF) published a report about it. The report criticized the $1.4 billion company for exploiting regulatory loopholes, charging patients an excessive price for its lone drug product, and touting evidence for the drug's effectiveness that -- according to SIRF -- doesn't exist.
It's just the latest blow for Corcept Therapeutics. Wall Street was already worried that its only drug product, Korlym, approved to treat Cushing's Syndrome, would struggle to stave off encroaching generic competition. Now, analysts will have a number of other worries.
As of 3:15 p.m. EST on Friday, the stock had settled to a 12.1% loss.
It's important for investors to know that SIRF is an investigative reporting foundation covering various topics in the financial sector. The board of directors includes well-known journalists such as William Cohan, the author of Money and Power, and Bethany McLean, who exposed fraud at Enron. The report published today about Corcept Therapeutics is not a short-seller report -- it's real journalism.
The SIRF report laid out a detailed case questioning the effectiveness of Korlym, including a regulatory rejection in Europe that went unanswered by Corcept for "strategic business reasons." The report also questioned the drug's safety, citing 37 deaths in the first nine months of 2018 reported to the Food and Drug Administration's adverse-events reporting system. It has been linked to 103 patient deaths since 2012.
Shareholders of Corcept Therapeutics, or any investors thinking that today's drop might be a buying opportunity, simply must read the investigative report. It sheds light on a host of very serious issues at the company that will need to be addressed by management. Whether or not the report leads to action from regulatory bodies such as the FDA or the Securities and Exchange Commission remains to be seen, but it is enough of a red flag to steer investors away from the stock.