Corcept Therapeutics Is 'Fairly Valued,' Stifel Says In Downgrade

Stifel's bullish case for Corcept Therapeutics Incorporated CORT, a pharmaceutical company that focuses on drugs to treat severe metabolic, oncologic and psychiatric disorders by modulating the effects of cortisol, no longer applies.

The Analyst

Stifel's Adam Walsh downgraded Corcept Therapeutics from Buy to Hold with an unchanged $20 price target.

The Thesis

There are three key reasons to now think Corcept's stock is "fairly valued" at current levels, Walsh said in a note.

First, Teva Pharmaceutical Industries Ltd (ADR) ADR TEVA is expected to launch an ANDA for a generic version to Corcept's Korlym. While this may not happen until late 2020 as a lawsuit is underway, the likelihood of a competitive environment creates a "potential overhang" for Corcept.

Competitive read outs from rival pharmaceutical firms are due in the near-term, including Recorlev and osilodrostat, the analyst wrote. While there's no clear read through, the potential for positive outcomes from rival therapies adds another overhang as Corcept's current valuation is mostly derived from the Cushing's franchise.

Corcept is still expected to launch its relacorilant in fiscal 2023, but there exists the potential for the U.S. Food and Drug Administration to impose a placebo arm in pivotal trials, the analyst wrote. Nevertheless, further commentary on this topic is expected with Phase 2 high-dose cohort results in the bottom half of 2018.

Price Action

Shares of Corcept Therapeutics were trading lower by 5.5 percent to $18.60 at time of publication.

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