Corcept Therapeutics Inc. (NASDAQ:CORT) continues to make its investors happy. The Menlo Park, Calif., biotech company beat earnings estimates in its first-quarter report last week. Revenue for the quarter was $93.2 million, an increase of 44% from the same quarter last year. While the effects of the COVID-19 pandemic have led some companies to forgo guidance, Corcept reaffirmed its revenue estimates of $355 million to $375 million for the year. 

Pill bottles on a medicine shelf.

IMAGE SOURCE: GETTY IMAGES

The company has a well-defined mission and performs it well, developing drugs to treat metabolic, oncologic, and psychiatric disorders by regulating the effects of the stress hormone cortisol. Cortisol is known as the "fight or flight" hormone, and it's needed for several basic body functions.

Corcept's revenue the over the past five years has the classic "upward staircase" look that you want to see in a growing company. And it still appears to be a good buy, with a trailing-12-month P/E ratio of 15.3, far superior to the industry average. 

CORT Revenue (Annual) Chart

CORT Revenue (Annual) data by YCharts

The biggest concern is its battle with generic competition

Corcept's only drug on the market is Korlym, which primarily reduces excess glucose in the bloodstream of patients with Cushing's disease (excess cortisol) who also have diabetes or glucose intolerance.

Corcept owns 10 patents related to Korlym. Last year, however, Teva Pharmaceuticals Industry Ltd. (NYSE:TEVA) and Sun Pharmaceuticals brought new drug applications (NDA) for generic versions of Korlym.

These are not the first patent fights Corcept has had. In February, the company prevailed in a case before the U.S. Patent Office Trial and Appeals Board (PTAB) regarding a challenge by Neptune Generics to the validity of a patent covering Korlym. 

There's a lot riding on the outcome of these cases. If Corcept prevails, any potential generics will be halted at least until 2037, when Korlym's patent is due to expire. The case with Teva is scheduled to begin Feb. 2, 2021, and a pretrial hearing in the Sun case is scheduled for November, so no court date has been set for that. In the meantime, the longer these cases spend wending their way through the system, the more money the company will make, regardless of the outcomes.

"We will be ready whether there are delays or not," said Charles Robb, Corcept's chief financial officer. "We are confident in our intellectual property and look forward to putting our case before a judge." 

The company has other potential blockbusters in its pipeline

Corcept has had positive phase 2 trials regarding uses for relacorilant, a nonsteroidal compound used to treat various Cushing's disease-related ailments, including by patients who developed the disease internally and those who developed it as a byproduct of a tumor. Relacorilant's phase 3 trials have been slowed because of the COVID-19 pandemic. The company suggests that relacorilant will have fewer significant side effects than Korlym.

Another key drug going through trials is miricorilant, used to treat weight gain in patients taking the antipsychotic olanzapine and those with non-alcoholic steatohepatitis (NASH), the most severe form of nonalcoholic fatty liver disease. The company is also working on compounds to treat amyotrophic lateral sclerosis (ALS, also known as Lou Gehrig's disease) and  post-traumatic stress disorder (PTSD). 

Corcept is in a strong financial position

Despite potential patent clouds, it's hard not to like Corcept, especially looking at the next couple of years. The company has no debt, and its cash and investments are worth $349 million. It has the war chest to fuel its patent fights, and even if it loses, it already has promising results for relacorilant, which could ultimately replace Korlym.

A good sign of the company's strength is how well the share price has done despite the COVID-19 pandemic. Since a low of $10.95 on March 11, the stock has risen by more than 20% to trade at more than $13.50 on Monday. Interested healthcare investors should still find this an opportune time to jump in.