Piper Jaffray Remains Bullish on Corcept Therapeutics (CORT) Following Management Meetings

Piper Jaffray analyst, Charles Duncan, hosted Corcept Therapeutics (NASDAQ: CORT) management team for investor meetings and believes a highly trained sales force and growing understanding of the endocrinologist market can increase Korlym penetration in the next 1-2 years. There are two keys to growth in 2016, salesforce expansion and a Phase II study of '134 which combined with Korlym's cost focus can accelerate profit growth.

In oncology, they were encouraged by management’s enthusiasm over the interim TNBC data and growing body of literature supporting the role of cortisol in cancer resistance. During 2016, they expect Phase II TNBC data and increasing visibility on GR antagonism in other tumor types.

The experted sales force, is up to 25 trained reps. Each having undergone an intensive 3 month training program, which should increase Corcept’s ability to intelligently market to new doctors. This is key to traction, as management describes the endocrinologist market as dispersed and difficult to convert, with each doctor requiring 5-7 points of contact prior to writing the first script due to its novel mechanism and cynicism from a physician population which is used to managing conditions where there are no “magic bullets.” However once physicians see dramatic improvement from 1-2 Cushing’s patients in their practice (referred to the “wow” factor by one KOL), Corcept reports they begin using the medicine regularly.

A soon-to-start Phase II of 2nd-gen GR antagonist ‘134 will expand MOA awareness and, eventually, size of the Cushing’s market. in 1Q16, the company expects to launch a Phase II study of '134. It plans to enroll this study both in the EU, where Korlym is not yet currently marketed, and at sites in the US (including some that have been hesitant to use Korlym due to the progesterone activity). The biggest issue is that women can experience side effects such as endometrial thickening (~50%) and irregular bleeding (~25%). These are not dangerous, but annoying and also side effects that are unfamiliar to the average endocrinologist. However, management mentioned 9 cases of elective hysterectomy on women who were past childbearing age and wanted to avoid these side effects but stay on Korlym, a tribute to the drug’s clinical value, in our view. Therefore the analyst believes development of ‘134 can expand the market to Europe in the long term, and and improve perception around safety and comfort of use through the Phase II trial sites.

Corcept continues to expect Korlym revenues of $49-53M in 2015 and the analyst believes Corcept can fully fund its current research activities with Korlym revenues in 2016.

No change to Overweight rating or $12 PT.

For an analyst ratings summary and ratings history on Corcept Therapeutics click here. For more ratings news on Corcept Therapeutics click here.

Shares of Corcept Therapeutics closed at $4.84 yesterday.

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