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Why is Corcept's Stock Up More Than 150% So Far This Year?

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Shares of Corcept Therapeutics Incorporated (CORT - Free Report) has soared 158.8% so far this year, massively outperforming the 9.5% growth registered by the industry. Here we analyze the factors that led to the rally.

Corcept’s only marketed drug, Korlym (mifepristone), is approved for the treatment of patients with Cushing's syndrome.

The company is striving to commercialize Korlym successfully by deploying medical liaisons and sales representatives. About 10-15 of every 1 million people are newly diagnosed with Cushing’s syndrome each year, which translates to more than 3,000 new patients annually in the United States. Increased awareness among physicians and patients about the drug and expanded sales efforts is likely to bolster sales.

Meanwhile, Corcept is currently working on developing the drug for additional indications. It is conducting a phase I/II safety and efficacy study on Korlym in combination with Eisai Co., Ltd.’s anti-cancer drug Halaven for the treatment of Triple-Negative Breast Cancer (TNBC). Enrolment in the study is complete and the company announced encouraging data in December 2016. We anticipate a successful label expansion of Korlym to boost the top line significantly, as the disease represents huge potential with as many as 40,000 women in the United States being diagnosed every year.

The University of Chicago is conducting a phase II study on Korlym, in combination with Pfizer’s (PFE - Free Report) Xtandi, for the treatment of metastatic, castration-resistant prostate cancer. The institution also plans to conduct a phase II study on Korlym, in combination with Celgene’s Abraxane, for the treatment of patients with TNBC.

Importantly, apart from Korlym, Corcept is also evaluating CORT125134 for Cushing’s syndrome and a range of solid tumors. Early data on the candidate for Cushing’s syndrome has been quite promising. The company has begun dosing patients in a phase I/II study on CORT125134, in combination with Abraxane, for the treatment of a range of solid-tumor cancers. The possible target indications include triple-negative breast cancer, ovarian cancer, pancreatic cancer and sarcoma.

The company also has selective cortisol modulator CORT118335 in phase I study and results are expected in the second quarter of 2018. This compound is very potent in animal models of fatty liver disease along with both the prevention and reversal of weight gain caused by antipsychotic medications such as Zyprexa (olanzapine). The company expects to begin phase II trials for both indications in the third quarter of 2018.

Also, during the third quarter of 2017 earnings release, the company raised 2017 revenue guidance. The company now projects revenues to be in the range of $157-$162 million, higher than its prior expectation of $145-$155 million.

 

Zacks Rank & Other Stocks to Consider

Corcept has a Zacks Rank #2 (Buy). Another top-ranked health care stock includes Sucampo Pharmaceuticals , sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Sucampo’s earnings per share estimates have moved up from 31 cents to $1.12 for 2017 and from $1.15 to $1.19 for 2018, in the last 30 days. The company delivered a positive earnings surprise in three of the trailing four quarters, with an average beat of 15.63%. The share price of the company has increased 32.8%, year to date.

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