Corcept Therapeutics Incorporated (CORT - Free Report) announced that its investors have exercised their warrants issued to purchase the company’s common stock.
Corcept had issued the warrants to accredited investors in two private placements – one in Mar 2008 and other one in Mar 2012. The exercise of these warrants generated gross proceeds of $17.2 million for the company.
The warrants that were issued in 2008 had an exercise price of $2.77 per share, while those issued in 2012 had an exercise price of $4.05 per share. Both sets expired in Mar 2015.
Although the exercise of the warrants will dilute Corcept’s share capital base, it will generate capital for the company. Corcept expects to use the proceeds from the warrants to develop its pipeline and further commercialize its lead drug, Korlym.
We note that Corcept’s lead drug Korlym was approved by the FDA in Feb 2012 as a once-daily oral medication for treatment of hyperglycemia secondary to hypercortisolism in adult patients with endogenous Cushing’s syndrome, who have type II diabetes mellitus or glucose intolerance.
Meanwhile, Corcept is conducting a phase I/II trial on Korlym in combination with chemotherapy as a potential treatment for triple-negative breast cancer. The company expects results from this study in the fourth quarter of 2015. Corcept is also evaluating cortisol modulator CORT125134 in a phase I study and will advance the compound to phase II in the first quarter of 2016 if the phase I study is successful.
We are positive on the growth prospects of Korlym and Corcept’s efforts on label expansion of the drug.
Corcept currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the health care sector include Salix Pharmaceuticals , Mallinckrodt (MNK - Free Report) and Lannett Company, Inc. (LCI - Free Report) . All three carry a Zacks Rank #1 (Strong Buy).