Corcept Therapeutics Confronts FDA Rejection and Legal Probe, Undermining Pipeline Catalyst

What happened

Corcept Therapeutics received a complete response letter from the FDA for relacorilant, its key drug candidate for Cushing's syndrome, on December 31, 2025, triggering a 50% stock price collapse. This outcome materializes the binary regulatory risk that DeepValue's report had highlighted, where a CRL was poised to skew the investment stance to sell. In response, shareholder rights law firm Hagens Berman launched an investigation into potential investor misrepresentation regarding relacorilant's efficacy and commercial prospects, adding legal overhang. Prior analyses noted Corcept's reliance on this late-stage catalyst to diversify beyond its profitable but pressured Korlym franchise, which faces generic competition and reimbursement headwinds. The combined regulatory setback and legal scrutiny now cast doubt on the company's near-term growth narrative and management credibility.

Implication

The CRL for relacorilant erases a central growth assumption, forcing a downward revision of revenue projections and heightening dependence on the declining Korlym business. With the stock already halved, downside may persist if the investigation reveals governance lapses or financial restatements, potentially leading to settlements or fines. Korlym's cash generation offers temporary support, but generic erosion and payer pressures, as detailed in DeepValue's risk factors, remain unmitigated and could accelerate. Legal proceedings may drain resources and distract management from addressing operational challenges, such as advancing other pipeline assets like ovarian cancer indications. Consequently, the investment case shifts from a neutral hold based on pipeline potential to a defensive stance, emphasizing capital preservation amid heightened uncertainty.

Thesis delta

DeepValue's neutral stance was contingent on relacorilant's FDA approval; the CRL receipt confirms the negative scenario, moving the thesis to sell due to lost diversification and compounded risks. The added legal investigation introduces new liabilities that could strain finances and credibility, further eroding the margin of safety. Investors should now focus on downside protection, as pipeline setbacks and governance concerns outweigh the profitable but vulnerable Korlym base.