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Corcept cancer trial results called encouraging

March 10, 2017

While Wall Street may be focused on big-name biotech stocks like Amgen (AMGN) and Celgene (CELG), investors should also keep an eye on the lesser-known but highly rated and fast-growing Corcept Therapeutics (CORT).

The 2004 IPO develops drugs that treat severe metabolic, oncologic and psychiatric disorders by modulating the effects of cortisol.

In December, Corcept reported “encouraging” results for its Phase 1/2 trial of mifepristone to treat patients with triple-negative breast cancer (TNBC). (A Phase 1/2 trial is a concurrent combination of Phases 1 and 2.)

Triple-Digit Rebound

After years of no profits, Corcept has generated seven consecutive quarters of triple-digit earnings growth or profits vs. year-ago losses. Analysts expect a 73% EPS gain for the year.

Top-line growth has ranged from 59% to 130% over the past eight quarters, although gains did slow to a still-solid 59% in Q4. Three-year annual revenue growth is an impressive 96%.

Corcept also sports a strong 57.2% return on equity, and its debt-to-equity ratio of 30% is much lower than that of Celgene (241%) and Amgen (101%).

Institutional investors have taken note, as reflected in the stock’s A- Accumulation/Distribution Rating, 1.8 up/down volume ratio and eight quarters of rising fund ownership.

Is Breakthrough Coming?

As Corcept has risen over the past year, it’s been featured multiple times in weekly emails that go out to Top-Rated Stocks Under $10 subscribers.

While Corcept’s latest base is later-stage and deep (33% decline), there have been strong signs of accumulation in the right side of the pattern, including a slew of up weeks in good volume. The relative strength line has also been trending sharply higher.

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