Hook & thesis
Corcept Therapeutics (CORT) was blindsided by an FDA action on relacorilant that vaporized a meaningful portion of its market value on 12/31/2025. That sell-off appears to be a regulatory binary priced into the stock rather than a fundamental breakdown of the underlying commercial business. The company's most recent quarter (Q3 FY2025) showed revenue of $207.6M, operating income and net income positive, and a large current-asset cushion that meaningfully de-risks the financing runway while management designs a response to the Complete Response Letter (CRL).
My base thesis: this is a high-risk long - not a buy-and-forget trade - but the combination of solid quarterly cash flow (net cash flow from operating activities of $54.5M in Q3 FY2025), a healthy balance sheet (current assets of $541.1M versus total liabilities of roughly $191.7M), and continuing commercial revenue make relacorilant a fixable regulatory problem with material upside if Corcept executes a credible regulatory remediation or refile. For traders willing to accept event risk, the post-CRL price dislocation presents an asymmetric risk/reward.
What Corcept does and why the market should care
Corcept is a commercial-stage biopharma focused on cortisol-modulating therapies for metabolic, oncologic, and neuropsychiatric disorders. The company markets and develops compounds to treat hypercortisolism and a range of other indications; relacorilant is the development-stage asset at the center of recent headlines. Investors care because relacorilant represented both a clinical and commercial growth pathway beyond Corcept's existing product base, and a regulatory rejection materially changes the near-term valuation narrative.
Numbers matter: in Q3 FY2025 (period ended 09/30/2025) Corcept reported revenues of $207.6M, up from $194.4M in Q2 and $157.2M in Q1. The company posted net income of $19.7M in that quarter and generated $54.5M of cash from operating activities. Operating expenses were high - $192.8M - driven partly by R&D ($68.8M) and SG&A ($124.0M), but revenue growth plus positive operating income (operating income of $10.2M in Q3 FY2025) show the business can produce cash while investing in development programs.
On the balance sheet Corcept reported current assets of $541.1M and other current assets of $505.8M in Q3 FY2025. Total liabilities stood at $191.7M with equity of $631.9M. That implies a substantial liquidity buffer; even after the immediate market shock the company is not forced into an emergency capital raise and has the flexibility to remediate regulatory issues with relacorilant or pivot development resources.
Why the sell-off overstates the problem
- Market reaction was triggered by an FDA Complete Response Letter - a documentation/regulatory action - not by a surprise clinical failure in the publicly-reported efficacy data. News reports from 12/31/2025 cited an FDA rejection, which caused a ~50% intraday decline that day. The sell-off reflects a binary regulatory event; it does not erase the underlying revenue profile or the balance-sheet cushioning.
- Corcept's recent quarterly trajectory shows revenue accelerating: $157.2M (Q1), $194.4M (Q2), $207.6M (Q3 FY2025). Positive net income in recent quarters and strong operating cash flow reduce the immediate financing risk and buy management time to respond.
Valuation framing
The market snapshot as of 01/04/2026 shows the stock trading around $38.20 after rebounding from the 12/31/2025 low. Historically, the stock spent much of the prior year in the $70 range with multiple spikes into the $80s-90s on positive news, which suggests the market previously valued forward relacorilant optionality. The post-CRL price is a large discount to that prior trading range and — crucially — to the company's tangible liquidity on the balance sheet.
Without an official market cap in the release, think of valuation qualitatively: the company has >$500M of short-term assets on the balance sheet and quarterly run-rate revenue north of $600M annualized if current revenue persists. Even after applying discounts for development risk and the regulatory cloud, the stock at $38 is pricing a materially reduced growth trajectory. If Corcept can resubmit or fix the deficiencies the CRL cites, a return to prior mid-cycle multiples becomes plausible, making the current price an attractive entry for risk-tolerant buyers.
Catalysts to watch (2-5)
- Management's public plan and timeline to address the CRL - investors should expect a formal guidance timeline and a regulatory strategy within 30-90 days after the CRL disclosure.
- Any supplementary analyses or real-world evidence that bolster relacorilant's efficacy/safety profile; publication or supportive advisory opinions would be powerful.
- Upcoming quarterly earnings and cash-flow disclosures showing continued commercial resilience (next quarterly filing will provide the best short-term read on whether revenue and margins hold).
- Partnership or licensing discussions for relacorilant or asset sale that could de-risk the program or provide non-dilutive capital.
Trade plan - actionable and disciplined
| Action | Price | Rationale |
|---|---|---|
| Entry (scale-in) | $34 - $42 | Buy the dip in tranches to average in; $38 is current reference price; scale lower if weak retest to $34. |
| Stop | $28 | Close position on a decisive breakdown below $28, which signals either a materially worse regulatory outcome or a rapid deterioration in commercial cash flow. |
| Target 1 (near-term) | $55 | Recoup some of the pre-CRL valuation; achievable if management outlines credible remediation or a resubmission timeline. |
| Target 2 (stretch) | $75 | Return to the pre-crisis trading range if relacorilant's regulatory path clears or if alternative growth drivers accelerate. |
Position sizing: this is a high-volatility trade. Keep an initial size small (1-3% of total portfolio), add in tranches only on clarity from management, and never exceed a risk budget consistent with a maximum loss to the portfolio you can tolerate (use the $28 stop to size position so that stop-loss equals your predetermined dollar risk).
Risks and counterarguments
- Regulatory risk: The CRL could indicate deficiencies that are costly or time-consuming to remediate. If the FDA's concerns are related to efficacy or safety and require new trials, relacorilant's value could collapse and the stock could remain depressed for years.
- Market may re-price duration: Even with cash on hand, if investors believe relacorilant's commercialization timeline is pushed out materially, multiples will compress and shares could trade well below current levels for an extended period.
- Clinical & competitive risk: Other players in hypercortisolism or adjacent indications could seize market share, or new data could erode relacorilant's competitive profile.
- Execution & financing risk: Management may choose to reallocate R&D or even raise capital at unfavorable terms, diluting equity holders. While current assets exceed liabilities, continued high R&D spend (Q3 R&D was $68.8M) could reduce the cushion over time.
- Counterargument: The market may be right to slam the valuation because a CRL is often followed by protracted discussions, and the probability of approval within 6-12 months could be low. If you ascribe a low probability of ultimate approval, the sell-off may be rational and the upside limited until clear regulatory progress is demonstrated.
Conclusion and what would change my mind
My stance: Speculative long (position-horizon 6-12 months). The CRL is a material negative and justifies significant caution, but Corcept's most recent results show revenue momentum (Q3 FY2025 revenue $207.6M) and meaningful operating cash flow ($54.5M from operations in Q3), and the balance sheet has current assets of $541.1M against liabilities of $191.7M. That gives management time to address the FDA without immediate dilution pressure. For disciplined investors who size positions carefully and use the stop at $28, the post-CRL price offers an attractive risk/reward skew.
What would change my mind: a formal statement from Corcept indicating the CRL deficiencies require new, large-scale clinical trials or that the company will withdraw applications would move me to a neutral/negative stance. Conversely, a clearly staged remediation plan with specific, short timelines for a resubmission or positive external advisory feedback would move me to add to the position and increase conviction.
Bottom line: This is not a low-risk trade. It is, however, a classic post-regulatory shock opportunity where balance-sheet strength and ongoing commercial cash flow buy time. Enter small, protect capital with a hard stop, and treat the position as event-driven until the regulatory picture clears.
Disclosure: This note is a trade idea, not personalized investment advice. Manage your position size and risk limits according to your financial circumstances.