Corcept Shares Plunge as FDA Warnings Surface, Casting Doubt on Relacorilant Approval

What happened

On January 30, 2026, Reuters reported that the FDA had repeatedly warned Corcept Therapeutics against submitting its New Drug Application for relacorilant, a key pipeline drug for Cushing's syndrome. This revelation directly challenges the company's regulatory strategy, which the DeepValue report highlighted as a binary risk with relacorilant's NDA submitted in late 2024 and an FDA decision expected by year-end 2025. The news triggered a 17% stock price drop, reflecting investor concerns over potential delays or rejection, despite Corcept's profitable Korlym franchise generating steady cash flow. Corcept's filings have acknowledged regulatory uncertainties, but the FDA's explicit warnings suggest deeper issues in the application process that could undermine the drug's approval prospects. If relacorilant faces significant setbacks, Corcept's diversification plans and valuation, which are heavily reliant on this catalyst, could be severely compromised, aligning with the report's caution on execution dependence.

Implication

The FDA warnings indicate that Corcept may have ignored regulatory advice, raising red flags about management's judgment and the quality of the relacorilant application. This development exacerbates the binary risk highlighted in the DeepValue report, making a favorable FDA decision less likely and increasing the probability of a Complete Response Letter or restrictive label. With the stock's premium valuation (P/E ~73x) embedding significant success for relacorilant, any delay or rejection could lead to substantial downside, as seen in the recent price drop. Corcept's near-term catalysts, including the ovarian cancer filing, now face greater skepticism, potentially stalling diversification efforts and leaving the company exposed to generic pressures on Korlym. Investors must closely monitor upcoming FDA communications and quarterly earnings for signs of resilience or further deterioration, adjusting their stance based on evolving regulatory clarity.

Thesis delta

The FDA's repeated warnings suggest that relacorilant's regulatory path is more fraught than previously assumed, increasing the likelihood of a setback. Consequently, the investment thesis should now weight the risk of approval delay or failure more heavily, potentially downgrading the stance from HOLD to SELL if further negative developments emerge. However, the profitable base business provides some cushion, but not enough to offset the heightened uncertainty.