Corcept's IP Shield Cracks as Court Backs Teva Generic, Intensifying Korlym Revenue Risks

What happened

A U.S. court has ruled in favor of Teva, allowing its generic version of Korlym to proceed, dismissing Corcept's claim that Teva's label would induce infringement of patented dosing methods. Korlym, Corcept's primary revenue driver with $675 million in 2024 sales, already faces pressure from an authorized generic launched in mid-2024, threatening its cash-generative franchise. This legal defeat weakens Corcept's intellectual property defenses, exposing the company to heightened generic competition and accelerating the risk of revenue erosion highlighted in the DeepValue report. The report's stance of HOLD/NEUTRAL was predicated on such IP uncertainties, with the current high valuation leaning heavily on pipeline success, particularly relacorilant's regulatory approval. While relacorilant's NDA submission for Cushing's syndrome offers diversification potential, this setback underscores the fragility of Korlym's near-term profitability and raises the stakes for upcoming catalysts.

Implication

The court ruling directly erodes Corcept's ability to fend off generic competitors, likely triggering immediate pricing pressure and faster market share loss for Korlym. This validates the DeepValue report's warning about generic dynamics, contradicting any management optimism and exposing earnings to sharper-than-expected declines. With Korlym's durability now more uncertain, the investment thesis pivots almost entirely to relacorilant's FDA decision by end-2025, amplifying regulatory risk and binary outcomes. The moderate-to-low margin of safety at current valuations has further diminished, as this news exacerbates revenue concentration and highlights execution vulnerabilities. Investors must vigilantly track quarterly Korlym sales and relacorilant milestones, as any delay or restrictive label could prompt a significant downward revaluation.

Thesis delta

The court decision confirms and intensifies the IP risks cited in the DeepValue report, shifting the near-term outlook from cautious to more bearish on Korlym's revenue stability. This elevates relacorilant's success to a critical imperative, making its FDA approval a make-or-break event for Corcept's valuation and long-term viability.