A Promising Opportunity to Buy Corcept Therapeutics Shares
Corcept Therapeutics shares faced a setback after an unfavorable court ruling, but analysts believe it's a good time to invest. The company plans to appeal the decision and investors can benefit from the future growth potential.
Troy D. Hanson
January 02, 2024
Corcept Therapeutics, a drugmaker specializing in treatments for Cushing Syndrome, experienced a significant drop in its shares following an unfavorable court ruling. However, one analyst team believes that this presents an excellent opportunity to buy the shares.
On Tuesday, Corcept's stock plummeted by 27% to $23.81, marking its most substantial decline since May 7, 2014, when it suffered a 51% decrease. This development occurred amidst a 0.7% decline in the S&P 500 on the same day, as reported by Dow Jones Market Data.
The recent court ruling determined that Teva Pharmaceutical Industries did not infringe upon Corcept's patents for Korlym, a drug used in the treatment of Cushing Syndrome. This condition arises when the body exhibits elevated levels of the hormone cortisol over an extended period.
Despite this setback, Corcept's Chief Executive Officer, Joseph Belanoff, expressed confidence in appealing the decision: "This disappointing decision is based on legal and factual errors we are confident will be reversed on appeal." The company plans to fight vigorously for their intellectual property rights whenever they face infringement.
Analyst Edward Nash from Canaccord shares the company's optimistic outlook. In a recent report, Nash maintained his Buy rating and $38 price target. He commented, "While we did not anticipate this outcome and are disappointed by the decision, we do not see this outcome as final." Nash considers the current share price an ideal buying opportunity due to the consistent growth in Korlym's top-line revenue and the anticipated positive outcome of the Phase III GRACE trial, which explores a treatment for Cushing Syndrome.
Similarly, analysts from Piper Sandler, led by David Amsellem, expressed disappointment in the court ruling and its potential impact. However, they remained positive about Corcept Therapeutics and retained an Overweight rating on the company's stock. Piper set a target price of $35 in their report.
In conclusion, despite the recent setback, analysts view the drop in Corcept Therapeutics shares as an attractive opportunity to invest. The company remains dedicated to appealing the court ruling and asserting its intellectual property rights. Investors can potentially benefit from the strength of Korlym's revenue and the promising Phase III GRACE trial results.