New York: Shares of U.S.-based biotechnology company Corcept Therapeutics (Nasdaq: CORT) fell sharply on Friday following the release of a corrected letter from the U.S. Food and Drug Administration (FDA), which revealed that the regulator had repeatedly cautioned the company before rejecting its application for a key experimental drug. The disclosure rattled investors, sending Corcept’s stock down by approximately 16% in early trading.
The FDA’s corrected “Complete Response Letter” (CRL) pertains to Corcept’s relacorilant, an orally administered drug intended to treat Cushing’s syndrome, a rare hormonal disorder caused by chronic overproduction of cortisol. The letter highlighted that the agency had warned Corcept multiple times about scientific and regulatory shortcomings prior to the submission of its application. Analysts described the tone of the letter as unusually stern, underlining the regulator’s concern that the company proceeded despite prior advisories.
According to the FDA, the pivotal clinical trials of relacorilant failed to demonstrate sufficient efficacy. Patients treated with the drug did not consistently achieve better outcomes than those receiving a placebo. In addition to questions about effectiveness, the agency raised significant safety concerns, particularly regarding liver toxicity. Four trial participants experienced probable drug-related liver injury, including one case with enzyme levels more than 50 times the normal limit, which the FDA flagged as a major safety risk.
These findings led the FDA to conclude that relacorilant’s risk–benefit profile was not favorable in its current form. The letter made it clear that additional, robust clinical data would be required before the agency could consider approving the therapy. This marks a significant setback for Corcept, which had positioned relacorilant as a cornerstone of its growth strategy in rare endocrine disorders.
The market reacted swiftly to the FDA’s disclosure. Corcept’s shares tumbled as investors digested the implications of repeated regulatory warnings, reflecting concerns over both the drug’s approval timeline and potential financial consequences. Analysts warn that Corcept now faces a critical one-year window to address the FDA’s concerns, or risk having the application treated as withdrawn. The setback has also drawn attention from securities law observers, who are scrutinizing whether Corcept’s prior investor communications adequately disclosed the regulatory risks.
Corcept has not yet issued a detailed response to the FDA’s corrected letter. The company’s ability to generate new clinical evidence demonstrating the safety and efficacy of relacorilant will be crucial in determining whether the drug can eventually secure FDA approval. The process is expected to be both time-consuming and costly, and investors remain cautious about the prospects for the therapy.
For now, the FDA’s letter serves as a reminder of the challenges faced by biotech firms navigating the complex regulatory landscape, particularly when developing treatments for rare and high-risk medical conditions.