Corcept Stock Plummets After FDA Drug Rejection Letter

Key Points of FDA's Rejection

Shares of Corcept Therapeutics plummeted by 16% following the release of a corrected complete response letter (CRL) from the U.S. Food and Drug Administration (FDA). The letter revealed that the agency had warned the company on multiple occasions not to submit its new drug application for relacorilant due to significant review issues.

Situation Overview

The FDA formally rejected Corcept's application for relacorilant, a drug intended for treating hypertension in patients with Cushing’s syndrome. According to the corrected letter dated January 28, the primary clinical trial failed to demonstrate that the drug was more effective than a placebo. The FDA explicitly stated it had told Corcept to expect major review problems if it proceeded with the submission.

Economic and Market Impact

The immediate market reaction was a sharp 16% drop in Corcept's stock price. Beyond the lack of efficacy, the FDA raised serious liver safety concerns, citing four patients who developed probable drug-induced liver injury. Analysts noted the strong language used by the FDA in the rejection letter is uncommon, signaling significant hurdles for the drug's approval. The company’s management stated they had submitted the application based on advice from regulatory advisors.

Summary and Outlook

Corcept Therapeutics has a one-year window to resubmit its application and address the significant efficacy and safety concerns raised by the FDA. Failure to respond will be treated as a request to withdraw the application. Investors and the market will be closely watching how the company addresses these critical deficiencies in its future communications and potential resubmission.

FAQ

Q: Why did Corcept Therapeutics' stock fall sharply?
A: The stock fell 16% after the FDA released a letter detailing its rejection of the drug relacorilant and revealing that it had previously warned Corcept not to submit the application due to significant issues.

Q: What were the FDA's main concerns with relacorilant?
A: The FDA's primary concerns were the drug's failure to show effectiveness over a placebo in clinical trials and serious liver safety risks, including several cases of drug-induced liver injury.

Q: What is the next step for Corcept?
A: Corcept has one year to address the FDA's concerns and resubmit its application. If no action is taken, the application will be considered withdrawn.

Source: Investing.com