Cortisol Modulation Risks May Overshadow Oncology Ambitions Yet Long-Term Prospects Remain Appealing

Catalysts

About Corcept Therapeutics

Corcept Therapeutics develops proprietary selective cortisol modulators to treat endocrine, oncologic, neurologic and metabolic diseases.

What are the underlying business or industry changes driving this perspective?

• Although relacorilant is approaching an FDA decision in hypercortisolism alongside growing physician recognition that the disorder is far more prevalent than historically assumed, any delay in approval, label constraints or slower than expected conversion from Korlym could mute the anticipated step-up in prescription volume and defer revenue acceleration.
• Despite expanding its specialty pharmacy network to relieve current fulfillment bottlenecks and support thousands of additional patients, execution risk in transitioning pharmacies and coordinating multiple distributors could prolong supply inefficiencies and increase operating costs, limiting near term margin expansion and earnings growth.
• While the oncology portfolio targets large unmet needs across ovarian, endometrial, cervical and pancreatic cancers with guideline-enabling studies, negative or merely incremental data from ROSELLA follow-ons, BELLA or other trials would undermine the rationale for broad cortisol-modulation use in solid tumors and cap future oncology revenue and returns on R&D spend.
• Although large disease populations in MASH and ALS offer significant optionality for miricorilant and dazucorilant, the long and competitive development timelines, potential Phase III failures and the need for sizable commercialization investment could weigh on net margins and limit the contribution of these programs to medium term earnings.
• Even as cortisol modulation gains scientific validation and Corcept advances multiple NDAs and global filings, the breadth of parallel late stage programs raises the risk of budget strain, prioritization missteps and post approval commercialization complexity, which could pressure SG&A, dilute returns on invested capital and dampen long run earnings leverage.

Assumptions

This narrative explores a more pessimistic perspective on Corcept Therapeutics compared to the consensus, based on a Fair Value that aligns with the bearish cohort of analysts. How have these above catalysts been quantified?

• The bearish analysts are assuming Corcept Therapeutics's revenue will grow by 33.4% annually over the next 3 years.
• The bearish analysts assume that profit margins will increase from 14.1% today to 31.8% in 3 years time.
• The bearish analysts expect earnings to reach $558.7 million (and earnings per share of $2.53) by about December 2028, up from $104.7 million today. However, there is some disagreement amongst the analysts with the more bullish ones expecting earnings as high as $1.3 billion.
• In order for the above numbers to justify the price target of the more bearish analyst cohort, the company would need to trade at a PE ratio of 21.7x on those 2028 earnings, down from 82.7x today. This future PE is greater than the current PE for the US Pharmaceuticals industry at 20.2x.
• The bearish analysts expect the number of shares outstanding to decline by 0.3% per year for the next 3 years.
• To value all of this in today's terms, we will use a discount rate of 6.96%, as per the Simply Wall St company report.

Risks

What could happen that would invalidate this narrative?

• Net income has declined materially despite strong top line growth, with third quarter 2025 revenue rising to $207.6 million while net income fell to $19.7 million compared to $47.2 million last year. This suggests that structurally higher R&D and SG&A required to support an expanded pipeline and multiple launches could compress net margins and slow earnings growth over the long term.
• The adverse patent litigation ruling against Teva is still under appeal and could be decided at any time. If Corcept fails to block generic Korlym competition before 2037, accelerating migration to lower priced authorized generics and potential entry of additional generics would pressure pricing power, limiting revenue growth and eroding gross margins over time.
• The investment heavy strategy of running parallel late stage programs in hypercortisolism, multiple solid tumors, MASH and ALS, combined with increasing SG&A to build larger commercial organizations, risks outpacing the revenue contribution from any single successful program. This could drive sustained operating expense growth faster than sales and constrain long run earnings expansion.
• Corcept’s oncology thesis relies on cortisol receptor antagonism becoming guideline enabling across a broad range of solid tumors. If forthcoming data from ROSELLA survival readouts, BELLA, pancreatic and gynecologic cancer studies or immunotherapy combinations prove only modest or inconsistent, long term adoption could fall short of expectations, capping oncology revenue potential and limiting future operating leverage.
• The long duration and competitive nature of MASH and ALS markets means that delays, regulatory setbacks or failure of miricorilant and dazucorilant to replicate early promising data in larger Phase IIb and Phase III trials could significantly reduce the expected contribution from these large indications. This could leave the company more dependent on a narrower product base and constrain diversified revenue and earnings growth.

Valuation

How have all the factors above been brought together to estimate a fair value?

• The assumed bearish price target for Corcept Therapeutics is $95.0, which represents up to two standard deviations below the consensus price target of $127.2. This valuation is based on what can be assumed as the expectations of Corcept Therapeutics's future earnings growth, profit margins and other risk factors from analysts on the more bearish end of the spectrum.
  
• However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $145.0, and the most bearish reporting a price target of just $95.0.
  
• In order for you to agree with the more bearish analyst cohort, you'd need to believe that by 2028, revenues will be $1.8 billion, earnings will come to $558.7 million, and it would be trading on a PE ratio of 21.7x, assuming you use a discount rate of 7.0%.
  
• Given the current share price of $82.28, the analyst price target of $95.0 is 13.4% higher.
  
• We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.